§3421. Mutualization of stock insurer

Link to law: http://legislature.vermont.gov/statutes/section/08/101/03421
Published: 2015

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The Vermont Statutes Online



Title

08

:
Banking and Insurance






Chapter

101

:
INSURANCE COMPANIES GENERALLY






Subchapter

003
:
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.

(b) The

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

year.

(4)

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.

(7) The

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

states.

(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).)
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