The Vermont Statutes Online
Banking and Insurance
INSURANCE COMPANIES GENERALLY
MERGERS, CONSOLIDATIONS, CONVERSIONS, MUTUALIZATIONS, BULK REINSURANCE, SUBSIDIARIES
3421. Mutualization of stock insurer
(a) A domestic
stock insurer may become a mutual insurer under such plan and procedure as may
be approved by the commissioner after a hearing held substantially in
accordance with the provisions of section 3305 of this title.
commissioner shall not approve any such plan or mutualization unless:
(1) It is
equitable to its stockholders and policyholders.
(2) It is
subject to approval by the holders of not less than a majority of the insurer's
outstanding capital stock having voting rights present at a duly called regular
or special meeting thereof, and by not less than a majority of the insurer's
policyholders who vote on such plan in person, by proxy or by mail pursuant to
such notice and procedure as may be approved by the commissioner.
(3) If a life
insurer, the right to vote thereon is limited to holders of policies other than
term or group policies, and whose policies have been in force for more than one
Mutualization will result in retirement of shares of the insurer's capital
stock at a price not in excess of the fair market value thereof as determined
by competent disinterested appraisers.
(5) The plan
provides for the purchase of the shares of any nonconsenting stockholder in
substantially the same manner and subject to the same rights and conditions as
are accorded a dissenting shareholder under section 3428 of this title.
(6) The plan
provides for definite conditions to be fulfilled by a designated early date
upon which such mutualization will be deemed effective and for notices
substantially in accordance with section 3424 of this title.
mutualization leaves the insurer with surplus funds reasonably adequate for the
security of its policyholders and to enable it to continue successfully in
business in states in which it is then authorized to transact business, and for
the kinds of insurance included in its certificates of authority in such
(c) No director,
officer, agent or employee of the insurer, nor any other person, shall receive
any fee, commission or other valuable consideration whatsoever for in any
manner aiding, promoting, or assisting therein except as set forth in the plan
of mutualization as approved by the commissioner.
(d) This section
shall not apply to mutualization under order of court pursuant to
rehabilitation or reorganization of an insurer. (1967, No. 344 (Adj. Sess.), §
1 (ch. 1, subch. 4, § 1).)