§ 31-732. Merger of policyholder membership interests.

Current through October 23, 2012

(a) A domestic mutual insurance company, upon the approval of the Commissioner, may reorganize by merging its policyholders' membership interests into a mutual insurance holding company formed pursuant to this section and continuing the corporate existence of the reorganizing insurance company as a stock insurance company or as a stock insurance company subsidiary to an intermediate holding company which is a subsidiary to the mutual insurance holding company.

(b) The Commissioner, after a public hearing as provided in § 31-703(g)(1), if satisfied that the interests of the policyholders are properly protected and that the merger is fair and equitable to the policyholders, shall approve the proposed merger and may require as a condition of approval such modifications of the proposed merger as the Commissioner finds necessary for the protection of the policyholders' interests. The Commissioner may retain consultants as provided in § 31-703(g)(3). A merger pursuant to this section is subject to § 31-703(a), (b), and (c). The Commissioner shall retain jurisdiction over the mutual insurance holding company organized pursuant to this section to assure that policyholder interests are protected.

(c) All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company. A merger of policyholders' membership interests in a mutual insurance company into a mutual insurance holding company shall be deemed to be a merger of insurance companies pursuant to § 31-703 and § 31-703 is also applicable.

                
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(Sept. 20, 1996, D.C. Law 11-159, § 3, 43 DCR 3714; Mar. 24, 1998, D.C. Law 12-81, § 41(b), 45 DCR 745.)

HISTORICAL AND STATUTORY NOTES

Prior Codifications

1981 Ed., § 35-3722.

Emergency Act Amendments

See notes to § 35-3721.

Legislative History of Laws

For legislative history of D.C. Law 11-159, see Historical and Statutory Notes following § 31-731.

For legislative history of D.C. Law 12-81, see Historical and Statutory Notes following § 31-702.