403-B:4 Distribution of Conversion Value. –
The insurer shall follow the following conversion methodology:
I. Each eligible policyholder of a mutual fire or casualty insurance company shall have the right to purchase securities of the stock insurance company into which the insurer is to be converted, based upon such policyholder's proportionate amount of the conversion value determined by dividing the net premium paid by each eligible policyholder to the insurer with respect to the 3-year period immediately preceding the date of adoption of the resolution by the board of directors approving the plan of conversion by the total net premiums received by the insurer from eligible policyholders with respect to that period.
II. Each eligible policyholder of a mutual life insurance company shall have the right to purchase securities of the stock insurance company into which the insurer is to be converted based upon such policyholder's proportionate amount of the conversion value determinable under a fair formula approved by the commissioner.
III. The stock offering shall provide that eligible policyholders have the first right to purchase the stock at its stated value. Shares remaining unsold or not subscribed for may be offered to the general public, including the insurer's directors, officers, agents or employees, provided, however, that the price of shares offered to the general public shall be greater than or equal to the price of shares offered to eligible policyholders.
IV. The above distribution method shall constitute full payment and discharge of the policyholder's proportionate conversion value, but this provision shall not be held to prohibit the stock insurance company from including in the plan of conversion provisions for the distribution of any other valuable consideration to policyholders. Notwithstanding any other provision of law, the policyholders shall have no other rights with respect to the conversion of the insurer after the effective date of the conversion under this chapter.