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Ohio Laws and Rules
Any domestic stock life insurance corporation, incorporated under a general law, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital stock, provided such plan:
(A) Has been adopted by a vote of a majority of the directors of such corporation;
(B) Has been approved by a vote of stockholders representing a majority of the capital stock then outstanding at a meeting of stockholders called for the purpose;
(C) Has been approved by a majority of the policyholders voting at a meeting of policyholders called for the purpose, each of whom is insured in a sum of at least one thousand dollars and whose insurance shall then be in force and shall have been in force for at least one year prior to such meeting.
As used in this section, "policyholder" means the person insured under an individual policy of life insurance, and the person to whom any annuity or pure endowment is presently or prospectively payable by the terms of an individual annuity or pure endowment contract, except where the policy or contract declares some other person to be the owner or holder thereof, in which case such owner or policyholder shall be deemed the policyholder, and except in cases of assignment. In the case of any individual policy or contract insuring two or more persons jointly or in case the policy or contract declares two or more persons to be the owner, the persons insured or declared to be the owner are considered as one policyholder for the purposes of this section. In case any such policy or contract has been assigned by an assignment absolute on its face to an assignee other than the corporation, and such assignment has been filed at the principal office of the corporation at least thirty days prior to the date of the meeting of policyholders, then such assignee shall be deemed a policyholder. Except as provided in this section, an assignee of a policy or contract shall not be deemed a policyholder. The reference in division (C) of this section to insurance in the amount of one thousand dollars or more is deemed to include any annuity contract, the commuted value of which is one thousand dollars or more on the date of said meeting, and any pure endowment contract for the principal sum of one thousand dollars or more.
Notice of the meeting of policyholders shall be given by mailing such notice from the home office of the corporation at least thirty days prior to such meeting in a sealed envelope, postage prepaid, addressed to such policyholders at their last known post-office addresses, provided that personal delivery of such written notice to any policyholder evidenced by written receipt therefor may be substituted for mailing the same. The meeting shall be otherwise provided for and conducted in such manner as is provided in the mutualization plan, provided that policyholders may vote in person, by proxy, or by mail, and that all votes shall be cast by ballot on a uniform ballot furnished by the corporation. The superintendent of insurance shall supervise and direct the method and procedure of said meeting and shall appoint an adequate number of inspectors to conduct the voting at said meeting who may determine all questions concerning the verification of the ballots, the ascertainment of the validity of such ballots, the qualifications of the voters, and the canvass of the vote, and who shall certify to the superintendent and to the corporation the result of such proceedings, which shall be supervised by said inspectors in accordance with such rules as are prescribed by the superintendent. All necessary expenses incurred by the superintendent shall be paid by the corporation, as certified to by him.
Before such a plan can be carried out, it must be submitted to the superintendent and must be approved by him in writing; provided that every payment for the acquisition of any shares of the capital stock of such corporation, the purchase price of which is not fixed by such plan, shall be subject to the approval of the superintendent, and provided that neither such plan, nor any such payment, shall be approved by the superintendent unless at the time of such approvals, respectively, the corporation, after deducting the aggregate sum appropriated by such plan for the acquisition of any part or all of its capital stock, and, in the case of any payment not fixed by such plan and subject to separate approval by the superintendent, after deducting also the amount of such payment, shall be possessed of net assets of not less than two hundred thousand dollars from which it shall maintain its deposit made previously with the superintendent, and such assets shall be not less than the entire liabilities of the corporation, including the net values of its outstanding contracts computed according to the standard adopted by the corporation under section 3903.72 of the Revised Code and including all funds, contingent reserves, and surplus, except for such surplus as has been appropriated or paid under such plan.
Effective Date: 03-07-1983
If a domestic stock life insurance corporation determines to become a mutual life insurance corporation, it may, in carrying out any plan to that end under section 3913.01 of the Revised Code, acquire any shares of its own stock by gift, bequest, or purchase. Until all of such shares are acquired, any shares so acquired, or acquired pursuant to section 3913.03 of the Revised Code, shall be acquired in trust for the corporation as provided in section 3913.04 of the Revised Code, and shall be assigned and transferred on the books of the corporation to not less than three nor more than five trustees. Such shares shall be held by them in trust and be voted by such trustees at all corporate meetings at which stockholders have the right to vote, until all of the capital stock of such corporation is acquired, at which time the entire capital stock shall be retired and canceled and the corporation shall become, thereupon, a mutual life insurance corporation without capital stock.
Effective Date: 10-01-1953
3913.03
Rights and privileges of dissenting stockholder.
If a stockholder of any domestic stock life insurance corporation planning to become a mutual life insurance corporation under section 3913.01 of the Revised Code files with the corporation, prior to or at the meeting of the stockholders at which the plan is submitted to a vote, a written objection to such plan and does not vote in favor of it, and such stockholder, within twenty days after the plan is approved by such meeting, makes written demand on the corporation for payment of the fair cash value of his shares as of the day prior to the date on which such plan is approved by the stockholders, excluding from such fair cash value any appreciation or depreciation in consequence of such mutualization, such stockholder shall be entitled to receive, within ninety days after such fair cash value is agreed upon or determined, upon surrender of his certificates representing his shares, such fair cash value of his shares. Any stockholder who fails to make such objection or having objected fails to make demand within the twenty-day period shall be conclusively presumed to have consented to the plan and shall be bound by the terms of it.
Any such objection and demand for the payment of the fair cash value of shares shall state the number and kind of shares held by the dissenting stockholder making the demand, and the amount which such stockholder claims is their fair cash value.
The right of a dissenting stockholder to be paid the fair cash value of his shares shall cease when the corporation, for any reason and in accordance with the provisions set forth in this section, abandons the plan to mutualize the corporation.
No demand for payment of such fair cash value may be withdrawn by the stockholder making the demand unless the corporation, by its board of directors, consents to such withdrawal.
Within ten days after the receipt of any such demand, the corporation shall inform such stockholder in writing whether it will pay the demanded amount, and, if it refuses to pay such amount, it shall offer in writing to pay another amount as such fair cash value.
If, within thirty days after the date of the written demand made by the dissenting stockholder, the value of such shares is agreed upon between the dissenting stockholder and the corporation and such value is approved by the superintendent of insurance, payment shall be made within ninety days after the date of such agreement, upon the surrender of the stockholder's certificates representing such shares. Upon payment of the agreed value, the dissenting stockholder ceases to have any interest in such shares and ceases to be a stockholder in the corporation, but the shares previously held by him and upon which he has been paid such fair cash value shall be transferred to and held by the trustees appointed under section 3913.04 of the Revised Code for the benefit of the corporation.
If, within such period of thirty days, the stockholder and the corporation do not agree upon the value of the shares, the corporation, or the dissenting stockholder if he has complied with this section, within sixty days after the expiration of the thirty-day period, may petition the court of common pleas of the county in which the principal office of the corporation is located, to determine the fair cash value of the shares mentioned in such demand as of the day before the vote was taken approving such plan.
If such petition is not filed within the sixty-day period, the fair cash value of the shares is conclusively deemed to be equal to the amount offered to the dissenting stockholder by the corporation if any such offer has been made or, if not, then an amount equal to that demanded by the dissenting stockholder.
Such petition shall contain a brief statement of the facts and shall show the vote and action objected to and facts entitling such dissenting stockholder to the relief demanded.
Upon the filing of such petition, the court, on the motion of the petitioner, shall enter an order fixing a date for hearing, and requiring a notice of the filing and prayer of such petition and of the date for hearing to be given to the respondent or defendant in the manner in which a summons is required to be served or substituted service is required to be made in other cases.
On the day fixed for the hearing of such petition, or any adjournment of it, the court shall determine from the petition and such evidence as is submitted by either party whether the dissenting stockholder is entitled to be paid the fair cash value of any shares, and the number of such shares, and, if the court finds and orders that such stockholder is entitled to be paid the fair cash value of any number of shares, the court shall appoint three appraisers to determine the fair cash value of such number of shares as of the day before the vote objected to was taken, excluding from such fair cash value any appreciation or depreciation in consequence of the mutualization or vote of the corporation, and the court further shall instruct the appraisers respecting their duties in making such determination.
The appraisers forthwith shall proceed to determine the fair cash value, and the appraisers, or a majority of them, shall make a report or award within ten days, unless the court increases that time, and shall file such report in the office of the clerk of the court of common pleas, whereupon, on the motion of either party, the report shall be submitted to the court and considered on such evidence as the court considers relevant, and if the award is found to be reasonable, and is confirmed and approved by the court, judgment shall be rendered against the corporation for the payment of the amount of the award, with interest at six per cent from a date which shall be fixed in such judgment.
If such appraisers, or a majority of them, fail to make and file an award within ten days, or within such further time as may be fixed by the court, or the award is not confirmed by the court, it summarily shall determine the fair cash value of the number of shares and render judgment for it.
Any judgment further shall provide that simultaneously with its payment the certificates evidencing the shares of stock affected shall be surrendered to the corporation and, upon the failure of the holder of the shares to surrender such certificates, the judgment shall stand as a cancellation of such certificates.
The costs of the proceedings, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable.
Such a proceeding is a special proceeding, and final orders in the proceeding may be reviewed and affirmed, modified, or reversed on appeal pursuant to the Rules of Appellate Procedure and, to the extent not in conflict with those rules, Chapter 2505. of the Revised Code.
Two or more dissenting stockholders may join as plaintiffs or be joined as defendants in any proceeding under this section, and two or more such proceedings may be consolidated.
A stockholder who so objects in writing and demands in writing payment of the fair cash value of any shares shall not be entitled to vote such shares or to exercise any rights respecting such shares or to receive any dividends or distributions on them, unless the plan of mutualization is abandoned, or, with the consent of the corporation, the objection and demand are withdrawn; provided that if, prior to such abandonment, dividends are paid in money to stockholders who are of the same class as those dissenting and who are of record on or after the day on which the vote was taken authorizing such mutualization, then an amount of money equal to the dividends otherwise payable upon such dissenting shares shall be paid to the holders of record of such shares who would, except for their dissent, be entitled to receive such dividends, and each such payment shall be a credit upon the total amount to be paid for such shares by the corporation. All the holders of such dissenting shares of record at the time of any such abandonment, shall be restored on such abandonment to the status of a stockholder, and any payments made previously on such shares shall be considered as dividends on them.
Any stockholder who has assented to the plan or who has been concluded by the vote of the assenting stockholders, and any stockholder who has objected and made demand in writing for the fair cash value of his shares subsequent to which an agreement has been reached fixing such fair cash value, but who fails to surrender his certificates for cancellation upon payment of the amount to which he is entitled, may be ordered to do so by a decree of the court of common pleas for the county in which the principal office of such corporation is located after notice and hearing in an action instituted by the corporation for that purpose, and such decree may provide that, upon the failure of the stockholder to surrender such certificates for cancellation, the decree shall stand in lieu of such surrender and cancellation.
At any time before there has been a vote of the policyholders approving a plan of mutualization, the corporation may abandon such plan by the same vote of the directors and of the stockholders as was required for its adoption. Upon such abandonment, the rights of any stockholders to be paid for their stock in accordance with the plan, and the rights of any dissenting stockholders to be paid the fair cash value of their stock, whether or not judgment may have been rendered for it, shall terminate, and the corporation shall continue to conduct its business as a domestic stock life insurance corporation as though no plan of mutualization had ever been adopted.
Effective Date: 03-17-1987
3913.04
Appointment of trustees - deposit retained by superintendent of insurance.
The trustees provided for in section 3913.02 of the Revised Code shall be appointed and vacancies shall be filled by the superintendent of insurance. Such trustees shall be qualified directors of the corporation at the time of such appointment and shall continue as such trustees until the purpose of the trust is accomplished or abandoned, unless they are removed for cause by the superintendent. Said trustees shall file with the superintendent a verified acceptance of their appointment and a declaration that they will faithfully discharge their duties as trustees. Such trustees shall give and file with the superintendent bonds in such an amount as under the circumstances the superintendent deems proper, with sureties thereon approved by the superintendent. All dividends and other sums received by said trustees on the shares of stock held by them shall be immediately repaid to said corporation. The necessary expenses of executing the trust shall be paid by the corporation. All shares held by such trustees are considered as admitted assets of such corporation at their par value.
Neither the retirement of the corporation's capital stock nor the amendment of its articles of incorporation shall affect existing suits, rights, or contracts of such corporation. The deposit of one hundred thousand dollars in securities or mortgages made by such corporation pursuant to section 3907.07 of the Revised Code, shall be retained by the superintendent in trust for the benefit and security of all of the members and policyholders of such corporation.
Effective Date: 10-01-1953
3913.05
Officers and directors.
When a domestic stock life insurance corporation has become converted into a mutual life insurance corporation, the officers and directors or trustees of the original corporation shall remain as the officers and directors or trustees of the newly converted corporation until the next annual meeting for the election of officers and directors or trustees, when their successors shall be elected in the manner provided in the articles of incorporation and code of regulations previously adopted by said corporation.
Effective Date: 10-01-1953
3913.06
Board of directors or trustees - corporate powers.
The corporate powers of a mutual life insurance corporation shall be exercised by, and its business and affairs shall be controlled by, a board of directors or trustees composed of not less than three nor more than twenty-one natural persons who are policyholders or members of said corporation. The members of such board shall be at least eighteen years of age, and at least three members must be residents and citizens of this state.
Effective Date: 01-01-1974
3913.07
Term of directors or trustees.
In order to secure continuity of membership in its board of directors or trustees, the articles of incorporation of any mutual life insurance corporation may provide for division of the board into not more than three classes, as nearly equal in number as possible, and may fix the term of office for each class.
Unless such provision is made in the articles of incorporation, all directors and trustees shall be elected annually.
Effective Date: 10-01-1953
Meetings of the board of directors or trustees of any mutual life insurance corporation shall be upon such notice as the code of regulations prescribes. Attendance of a director or trustee at any meeting constitutes a waiver of notice of such meeting, except when a director or trustee attends the meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. The notice or waiver of notice need not specify the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors or trustees.
Effective Date: 10-01-1953
If the code of regulations of any mutual life insurance corporation so provides, the board of directors or trustees, by a resolution adopted by a majority of the whole board, may designate three or more of its number to constitute an executive committee, which committee shall, to the extent provided in the resolution or in the code of regulations, have and exercise, during the interim between the meetings of the board, all of the authority of the board in the management of the corporation.
The designation of such committee shall not relieve the board, or any member thereof, of any responsibility imposed by law.
Effective Date: 10-01-1953
The code of regulations of any mutual life insurance corporation shall provide that each policyholder of the corporation shall be a member of the corporation.
As used in this section, "policyholder" means the person insured under an individual policy of life insurance, and the person to whom any annuity or pure endowment is presently or prospectively payable by the terms of an individual annuity or pure endowment contract, except where the policy or contract declares some other person to be the owner or holder thereof, in which case such owner or policyholder shall be deemed the policyholder, and except in cases of assignment. In the case of any individual policy or contract insuring two or more persons jointly or in case the policy or contract declares two or more persons to be the owner, the persons insured or declared to be the owner are considered as one policyholder. In case any such policy or contract has been assigned by an assignment absolute on its face to an assignee other than the corporation and such assignment is filed at the principal office of the corporation, then such assignee shall be deemed a policyholder, but for the purpose of determining voting rights such assignment is not effective until thirty days after it has been filed with the corporation. Except as provided in this section an assignee of a policy or contract shall not be deemed a policyholder.
Such code of regulations shall provide that each policyholder who is insured in the sum of at least one thousand dollars, or who is the holder of an annuity which at normal date of maturity requires the payment of one hundred dollars or more annually, and whose insurance or contract of annuity is then in force and has been in force for at least one year prior to a policyholders' meeting, shall be entitled to only one vote, irrespective of the number of policies or contracts held by him or their amount.
The power to make, alter, amend, or repeal the code of regulations is vested in the board of directors or trustees, unless it is reserved to the members by the articles of incorporation.
The code of regulations of a mutual legal reserve life insurance corporation shall provide that such corporation shall issue no policy of life insurance or annuity contract which provides for the payment of any assessment by any policyholder or member in addition to the regular premium charged for such insurance or annuity.
Effective Date: 10-01-1953
3913.11
Conversion from mutual life to stock life company.
(A) A domestic mutual life insurance company may become a stock life insurance company, pursuant to sections 3913.11 to 3913.13 of the Revised Code, provided that the company have unassigned surplus at least equal to the capital and surplus required under section 3907.05 of the Revised Code for a life insurance company to commence business in this state, that such conversion will benefit the company, that adequate provision for protection of the policyholders' interests is made, and that such conversion is not inequitable, unreasonable, or contrary to law. "Policyholder," as used in sections 3913.11 to 3913.13 of the Revised Code, means a policyholder as defined in section 3913.10 of the Revised Code and the qualifications for voting shall be as provided in that section.
(B) The board of directors of a mutual life insurance company desiring to become a stock life insurance company shall, by a majority vote, adopt a resolution stating the reason it believes such conversion would be of benefit to the company and its policyholders, and setting forth a plan of conversion and explanation thereof, a schedule of the steps to be followed in effecting the conversion, and a statement of the organization of the new company and its capitalization, including the number of shares of capital stock and the price per share for which the stock is to be issued. Five certified copies of such resolution shall be filed with the superintendent of insurance, together with the following:
(1) A copy of the charter or articles of incorporation of the company, together with the proposed articles of incorporation of the new company;
(2) Complete annual financial statements of the company for the five accounting periods immediately preceding the date of the resolution, based on generally recognized insurance accounting principles;
(3) A draft of the prospectus to be sent to the policyholders, which shall contain a full disclosure of the details of the proposed conversion;
(4) Such other and further statements, affidavits, books, records, papers, information, and data, as the superintendent may require.
(C) Within thirty days of the filing of the resolution and supporting documents and information required by division (B) of this section, the superintendent shall review them, and if it appears on their face that such conversion meets the requirements contained in division (A) of this section, he shall order an examination of the company. If he finds that such conversion does not meet the requirements contained in division (A), he shall issue a written order prohibiting the conversion, stating in detail the reasons therefor. The company may, within thirty days after issuance of such order of prohibition, submit modifications to the proposed conversion, and if the superintendent finds that the conversion as so modified meets the requirements contained in division (A) he shall rescind his prior order and order an examination of the company. The examination conducted pursuant to this section shall be such as is necessary to verify that such conversion will meet the requirements contained in division (A). The expenses of such examination shall be paid by the company.
(D) Upon completion of the examination, the superintendent shall appoint an appraisal committee, consisting of a fellow of the society of actuaries, an attorney at law, and a person who by reason of knowledge and experience is specially qualified in the valuation of insurance companies. No member of such committee shall have any direct or indirect interest in the company's affairs, nor shall any member be an employee of the department of insurance. Each such appraiser shall receive reasonable compensation for his services, plus reasonable expenses, as approved by the superintendent, which compensation and expenses shall be paid by the company. The appraisal committee shall determine the value of the company as of the date of the examination conducted pursuant to this section, taking into consideration the admitted and non-admitted assets, reserves, and other liabilities, equity in unearned premium reserves, the value of the agency plant, the value of insurance in force, and any other factor affecting the value of the company.
The appraisal committee shall confirm or modify the determination of the board of directors as to the consideration to be given to each policyholder, including, if applicable, the number of shares of the new corporation and establish the priority rights for subscription to any additional shares that may be issued to each policyholder pursuant to section 3913.12 of the Revised Code. Certified copies of the report of the appraisers shall be filed with the superintendent and sent to the company.
(E) Within sixty days after the appraisal committee files its report with the superintendent, the company shall call a meeting of policyholders. Notice of the time and place of such meeting shall be sent by mail to each policyholder at his post office address as it appears on the books of the company, and to the superintendent, at least thirty days prior to such meeting. Such notice shall include a copy of the prospectus required under division (B)(3) of this section as approved by the superintendent, a summary of the examination approved by the superintendent, a uniform ballot for voting on the question of conversion, together with a postage prepaid envelope for the return of such ballot, a copy or summary of the report of the appraisal committee, a statement of the consideration to be given to the policyholder, including, if applicable, the number of shares of the new company to be issued to the policyholder and the priority rights of the policyholder for subscription to any additional shares that may be issued, and a statement that if the conversion is approved by the policyholders, the superintendent will fix a time and place for a public hearing on such conversion not more than sixty days after the date of such meeting. The superintendent shall appoint sufficient inspectors to conduct the voting at said meeting and to determine all questions concerning the verification of ballots, the qualifications of voters, and the canvass of the vote. The inspectors shall certify to the superintendent and to the company the result of such proceedings. Voting at such meeting may be in person, by proxy, or by mail as provided in this division. All necessary expenses incurred by the department in connection with such meeting, and certified by the superintendent, shall be paid by the company.
(F) If such conversion is approved at such meeting by the affirmative vote of a majority of the policyholders of such company voting at the meeting, the superintendent shall fix the time and place for a public hearing not more than sixty days after the date of such meeting. Otherwise, he shall issue an order prohibiting the conversion. Notice of the time and place of such hearing shall be published once each week for two consecutive weeks in a newspaper of general circulation in the county where the home office of the company is located, and in Franklin county, and the last such publication shall be at least fifteen days prior to the date of such hearing. The expenses of publication of notice shall be paid by the company. At such hearing, the superintendent shall hear any person adversely affected by the conversion, who may present his position, arguments, or contentions, offer and examine witnesses, and present evidence tending to show that such conversion does not meet the requirements contained in division (A) of this section. If the superintendent finds that such conversion meets such requirements, he shall issue his written order accepting the report of the appraisal committee and authorizing the conversion. Otherwise, he shall issue such order as is appropriate to his findings.
(G) At or after the issuance of the order authorizing the conversion, the articles of incorporation of the new company as approved by the superintendent shall be filed with the secretary of state. When such articles of incorporation of the new company are filed and accepted by the secretary of state, the mutual life insurance company shall become a stock life insurance company, and all property of every description and every interest therein, and all obligations of, belonging to, or due the mutual company shall thereafter be considered vested in the stock company without further act or deed. The stock insurance company shall be liable for all obligations of the mutual company and any claim existing or action or proceeding pending by or against the company may be prosecuted to judgment, with right of appeal as in other cases, as if such conversion had not taken place. All rights of creditors, and all liens upon the property of the mutual company shall be preserved unimpaired, limited in lien to the property affected by such liens immediately prior to the effective date of the conversion.
The directors and officers of the mutual company shall serve as the directors and officers of the new company, until new directors and officers have been duly elected and qualified pursuant to the articles of incorporation and by-laws of the new company, and as otherwise provided by law.
(H) Upon the conversion becoming effective pursuant to division (G) of this section, the new company shall forthwith proceed with winding up the affairs of the mutual company, and with the issuance of stock and priority rights in accordance with section 3913.12 of the Revised Code. Within six months after such effective date of the conversion, the new company shall file with the superintendent a written report containing such information as the superintendent may require to fully apprise him of the status of the conversion and whether it has been or is being carried out in accordance with its terms and according to law.
Effective Date: 09-24-1986
3913.12
Consideration to policyholders in effecting conversion.
(A) In effecting a conversion of a mutual life insurance company into a stock life insurance company, each policyholder is entitled to consideration in an amount equal to his equitable share of the value of the mutual company as provided for in the plan of conversion. Such consideration may be in the form of stock, either common or preferred, warrants, bonds, debentures, cash, or increased benefits. If the plan provides for consideration in the form of stock and if such equitable share of the value of the mutual company entitles a policyholder to a fractional share of stock, he shall have the option of receiving the value of such fractional share in cash or of purchasing such additional fraction as will entitle him to a full share. If the plan of conversion provides for consideration in the form of stock and if the initial issue of stock of the new company exceeds the number of shares to which the policyholders are entitled in the aggregate, each policyholder is also entitled to preemptive rights in subscribing to his proportionate number of shares of such excess.
(B) The value of the company is the value as determined by the appraisal committee pursuant to division (D) of section 3913.11 of the Revised Code, and approved by the superintendent of insurance. The equitable share of the value of the new company held by each policyholder shall be determined by the ratio which the premiums paid by the policyholder and the dividends paid or credited to him during the three year period preceding, and the reserve on his policy on, the date of the examination conducted pursuant to division (C) of section 3913.11 of the Revised Code bear to the total premiums received and dividends paid or credited by the company during the same period and the reserves on all policies, appropriate weight being given to premiums, dividends, and reserves as the company with the approval of the superintendent of insurance deems appropriate in the circumstances.
(C) Upon conversion of a mutual life insurance company to a stock life insurance company, each policyholder's ownership interest in the mutual company terminates except for the shares of the new company or other consideration in lieu thereof which said policyholder is entitled to receive and except for all other rights arising under his policy or policies of insurance.
Effective Date: 09-24-1986
3913.13
Appeal of policyholder adversely affected.
Any policyholder adversely affected by an order of the superintendent of insurance pursuant to division (F) of section 3913.11 of the Revised Code, may appeal to the court of common pleas of Franklin county pursuant to section 119.12 of the Revised Code.
Effective Date: 07-17-1970
3913.20
Conversion to stock insurance corporation other than life definitions.
As used in sections 3913.20 to 3913.23, inclusive, of the Revised Code:
(A) "Policy" means a contract of insurance, other than life insurance issued on the mutual plan, and includes the master contract for group insurance, and also includes any policy or policies from or in continuation of which a policy in effect on the date of the examination conducted pursuant to division (C) of section 3913.21 of the Revised Code has been reissued or renewed.
(B) "Policyholder" means the person, group of persons, association, corporation, partnership, or other entity named as the insured under a mutual policy of insurance other than life issued and in force on the date of the examination conducted pursuant to division (C) of section 3913.21 of the Revised Code.
Effective Date: 11-06-1969
3913.21
Stock insurance conversion definitions.
(A) A domestic mutual insurance company other than life may become a stock insurance corporation other than life, pursuant to sections 3913.20 to 3913.23 of the Revised Code, provided that such conversion will benefit the company, that adequate provision for protection of the policyholders' interests is made, and that such conversion is not inequitable, unreasonable, or contrary to law.
(B) The board of directors of a mutual company desiring to become a stock insurance corporation shall, by a majority vote, adopt a resolution stating the reason it believes such conversion would be of benefit to the company and its policyholders, and setting forth a plan of conversion and explanation thereof, a schedule of the steps to be followed in effecting the conversion, and a statement of the organization of the new corporation and its capitalization, including the number of shares of capital stock and the price per share for which the stock is to be issued. Five certified copies of such resolution shall be filed with the superintendent of insurance, together with the following:
(1) A copy of the charter or articles of incorporation of the company, together with the proposed articles of incorporation of the new corporation;
(2) Complete financial statements of the company, both current and for the five accounting periods immediately preceding the date of the resolution, based on generally recognized insurance accounting principles, including a statement of the nonadmitted assets and equity in the unearned premium reserve, income statement, and other statements and data necessary to show the true financial condition of the company;
(3) A draft of the prospectus to be sent to the policyholders, which shall contain a full disclosure of the details of the proposed conversion;
(4) Such other and further statements, affidavits, books, records, papers, information, and data, as the superintendent may require.
(C) Within thirty days of the filing of the resolution and supporting documents and information required by division (B) of this section, the superintendent shall review them, and if it appears on their face that such conversion meets the requirements contained in division (A) of this section, the superintendent shall order an examination of the company. If the superintendent finds that such conversion does not meet the requirements contained in division (A) of this section, the superintendent shall issue a written order prohibiting the conversion, stating in detail the reasons therefor. The company may, within thirty days after issuance of such order of prohibition, submit modifications to the proposed conversion, and if the superintendent finds that the conversion as so modified meets the requirements contained in division (A) of this section the superintendent shall rescind the prior order and order an examination of the company. The examination conducted pursuant to this section shall be such as is necessary to verify that such conversion will meet the requirements contained in division (A) of this section. The expenses of such examination shall be paid by the company.
(D) Upon completion of the examination, the superintendent shall appoint an appraisal committee, consisting of a certified public accountant, an attorney at law, and a person who by reason of knowledge and experience is specially qualified in the valuation of insurance companies. No member of such committee shall have any direct or indirect interest in the company's affairs, nor shall any member be an employee of the department of insurance. Each such appraiser shall receive reasonable compensation for the appraiser's services, plus reasonable expenses, as approved by the superintendent, which compensation and expenses shall be paid by the company. The appraisal committee shall determine the value of the company as of the date of the examination conducted pursuant to this section, taking into consideration the admitted and nonadmitted assets, liabilities, equity in unearned premium reserves, the value of the agency plant, the value of insurance in force, and any other factor affecting the value of the company. Surplus contribution notes issued and outstanding under section 3901.72 of the Revised Code shall be considered as liabilities in determining the value of the company.
The appraisal committee shall also determine the number of shares of the new corporation and priority rights for subscription to shares to be issued to each policyholder pursuant to section 3913.22 of the Revised Code. Certified copies of the report of the appraisers shall be filed with the superintendent and sent to the company.
(E) Within sixty days after the appraisal committee files its report with the superintendent, the company shall call a meeting of the mutual policyholders. Notice of the time and place of such meeting shall be sent by mail to each policyholder at his post office address as it appears on the books of the applicant, and to the superintendent, at least thirty days prior to such meeting. Such notice shall include a copy of the prospectus required under division (B)(3) of this section as approved by the superintendent, a summary of the examination approved by the superintendent, a uniform ballot for voting on the question of conversion, together with a postage prepaid envelope for the return of such ballot, a copy or summary of the report of the appraisal committee, and a statement of the number of shares of the new corporation to be issued to the policyholder and the priority rights of the policyholder for subscription to any additional shares that may be issued. The superintendent shall appoint sufficient inspectors to conduct the voting at said meeting and to determine all questions concerning the verification of ballots, the qualifications of voters, and the canvass of the vote. The inspectors shall certify to the superintendent and to the applicant the result of such proceedings. All necessary expenses incurred by the department in connection with such meeting, and certified by the superintendent, shall be paid by the company.
(F) If a majority of votes cast are in favor of conversion, the superintendent shall fix the time and place for a public hearing. Otherwise, the superintendent shall issue an order prohibiting the conversion. Thirty days notice of such hearing shall be sent by mail to each policyholder, and notice of the time and place of such hearing shall be published once each week for two consecutive weeks in a newspaper of general circulation in the county where the home office of the company is located, and in Franklin county, and the last such publication shall be at least fifteen days prior to the date of such hearing. The expenses of mailing and publication of notice shall be paid by the company. At such hearing, the superintendent shall hear any person adversely affected by the conversion, who may present a position, arguments, or contentions, offer and examine witnesses, and present evidence tending to show that such conversion does not meet the requirements contained in division (A) of this section. If the superintendent finds that such conversion meets such requirements, the superintendent shall issue a written order accepting the report of the appraisal committee and authorizing the conversion. Otherwise, the superintendent shall issue such order as is appropriate to the superintendent's findings.
(G) At or after the issuance of the order of authorizing the conversion, the articles of incorporation of the new corporation as approved by the superintendent shall be filed with the secretary of state. When such articles of incorporation of the new corporation are filed and accepted by the secretary of state, the mutual insurance company shall become a stock insurance corporation, and all property of every description and every interest therein, and all obligations of, belonging to, or due the mutual company shall thereafter be taken and deemed to be vested in the stock corporation without further act or deed. The stock insurance corporation shall be liable for all obligations of the mutual company and any claim existing or action or proceeding pending by or against the company may be prosecuted to judgment, with right of appeal as in other cases, as if such conversion had not taken place. All rights of creditors, and all liens upon the property of the mutual company shall be preserved unimpaired, limited in lien to the property affected by such liens immediately prior to the effective date of the conversion. The holders of surplus contribution notes issued and outstanding under section 3941.10 of the Revised Code shall have the option of continuing to hold such notes for repayment according to their terms, or of cancelling such notes in exchange for such shares of stock in the new corporation as the amount of unpaid principal and interest will purchase. If such unpaid principal and interest entitle the holder of any such notes to a fractional share of stock upon their cancellation, the holder shall have the option of receiving the value of such fractional share in cash or of purchasing such additional fraction as will entitle the holder to a full share.
The directors and officers of the mutual company shall serve as the directors and officers of the new corporation, until new directors and officers have been duly elected and qualified pursuant to the articles of incorporation and by-laws of the new corporation, and as otherwise provided by law.
(H) Upon the conversion becoming effective pursuant to division (G) of this section, the new corporation shall forthwith proceed with winding up the affairs of the mutual company, and with the issuance of stock and priority rights in accordance with section 3913.22 of the Revised Code. Within six months after such effective date of the conversion, the new corporation shall file with the superintendent a written report containing such information as the superintendent may require to become fully apprised of the status of the conversion and whether it has been or is being carried out in accordance with its terms and according to law.
Effective Date: 03-03-1996
3913.22
Rights of mutual policyholders in effecting conversion.
(A) In effecting a conversion of a mutual insurance company into a stock insurance corporation pursuant to sections 3913.20 to 3913.23, inclusive, of the Revised Code, each mutual policyholder is entitled to such shares of stock of the new corporation as his equitable share of the value of the mutual company will purchase. If such equitable share of the value of the mutual company entitles a policyholder to a fractional share of stock, he shall have the option of receiving the value of such fractional share in cash or of purchasing such additional fraction as will entitle him to a full share. If the initial issue of stock to the new corporation exceeds the number of shares to which the mutual policyholders are entitled in the aggregate, each mutual policyholder is also entitled to preemptive rights in subscribing to his proportionate number of shares of such excess.
(B) The value of the company is the value as determined by the appraisal committee pursuant to division (D) of section 3913.21 of the Revised Code, and approved by the superintendent of insurance. The equitable share of the value of the company held by each mutual policyholder shall be determined as follows:
(1) By the ratio which the total net premiums paid, in respect to his mutual policy or policies in force on the date of the examination conducted pursuant to division (C) of section 3913.21 of the Revised Code, within the period including the five accounting periods preceding the date of such examination and including the time from the end of the last such accounting period to the date of the examination, bears to the total net premiums paid in the same period in respect to all mutual policies of the company in force on the date of such examination; or
(2) If the company is a perpetual deposit insurance company, by the ratio which each mutual policyholders premium deposit bears to the total premium deposits held by the company, provided that, if the company has held the premium deposit for less than five years, the equitable share of each mutual policyholder is ten per cent of such ratio for each full six month period said deposit has been held by the company. As used in this section, "net premium" means gross premium less return premium and dividends paid.
(C) Shares shall be issued to the owner or owners of a mutual policy in force on the date of the examination conducted pursuant to division (C) of section 3913.21 of the Revised Code, as such owner or owners appear on the face of the policy. If ownership of a policy has been assigned by a writing absolute on its face to an assignee other than the mutual company, and such assignment is in effect and on file at the principal office of the new corporation on the date shares are issued the assignee shall be deemed the owner of the policy.
(D) From and after the date of issuance of shares to a policyholder pursuant to sections 3913.20 to 3913.24, inclusive, of the Revised Code, his ownership interest in the company as a mutual policyholder terminates, and such ownership interest shall thenceforth be represented solely by the shares of stock in the new corporation issued to him, but no other rights or liabilities of the policyholder arising under his policy are affected by such issuance of stock.
Effective Date: 12-17-1971
3913.23
Appeal of policyholder adversely affected.
Any policyholder adversely affected by an order of the superintendent of insurance pursuant to division (F) of section 3913.21 of the Revised Code, may appeal to the court of common pleas of Franklin county pursuant to section 119.12 of the Revised Code.
Effective Date: 11-06-1969
3913.25
Reorganization of mutual insurance company as stock insurance company definitions.
As used in sections 3913.25 to 3913.38 of the Revised Code:
(A) "Intermediate holding company" means a stock corporation that owns all of the shares of voting stock of one or more reorganized stock companies after a reorganization under sections 3913.25 to 3913.38 of the Revised Code. "Intermediate holding company" also means a stock corporation that is the parent or subsidiary of another intermediate holding company.
(B) "Mutual insurance company" means a domestic or foreign mutual life insurance company or a domestic or foreign mutual insurance company other than a mutual life insurance company.
(C) "Mutual insurance holding company" means a domestic mutual insurance holding company incorporated pursuant to a reorganization plan adopted under sections 3913.26 to 3913.28 of the Revised Code, which company is the parent company of a reorganized stock company or of an intermediate holding company.
(D) "Policyholder" has the same meaning as in section 3913.10 of the Revised Code when used with respect to a life insurance company, and has the same meaning as in section 3913.20 of the Revised Code when used with respect to an insurance company other than a life insurance company.
(E) "Reorganization plan" means a reorganization plan adopted by a mutual insurance company's board of directors in accordance with section 3913.26 of the Revised Code.
(F) "Reorganized stock company" means the domestic or foreign stock insurance company resulting from a domestic or foreign mutual insurance company's reorganization under sections 3913.25 to 3913.38 of the Revised Code.
(G) "Voting stock" means securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only as a result of the occurrence of a contingency.
Effective Date: 09-16-1997
3913.26
Reorganization of mutual insurance company as stock insurance company.
(A) A mutual insurance company, by itself or together with one or more other mutual insurance companies acting pursuant to a joint reorganization plan, may reorganize in accordance with the requirements of sections 3913.25 to 3913.38 of the Revised Code.
(B)
(1) A mutual insurance company may adopt a reorganization plan that is consistent with the requirements of sections 3913.25 to 3913.38 of the Revised Code. Such a reorganization plan may only be adopted by the affirmative vote of not less than two-thirds of the mutual insurance company's board of directors.
(2) At any time prior to the mailing to policyholders of the notice pursuant to division (B) of section 3913.27 of the Revised Code, which notice includes a summary of the reorganization plan, a mutual insurance company's board of directors may amend the reorganization plan by the affirmative vote of not less than two-thirds of the board of directors. At any time before a reorganization plan has received the approval of the superintendent of insurance under section 3913.28 of the Revised Code, a mutual insurance company's board of directors may withdraw the reorganization plan by the affirmative vote of not less than two-thirds of the board of directors.
(C) A reorganization plan shall provide for the incorporation of a mutual insurance holding company, and shall provide for the continuation of the corporate existence of the mutual insurance company as a stock insurance company.
(D) A reorganization plan shall provide that all of the initial shares of voting stock of a reorganized stock company shall be issued to its parent mutual insurance holding company or to an intermediate holding company. Nothing in sections 3913.25 to 3913.38 of the Revised Code, however, shall be construed as limiting or restricting the authority of a reorganized stock company or of an intermediate holding company to issue securities other than voting stock.
(E)
(1) A reorganization plan shall provide that the membership interests of the policyholders of a mutual insurance company shall become membership interests in the mutual insurance holding company, and that concurrently the policyholders' membership interests in the mutual insurance company shall be extinguished.
(2) A reorganization plan shall provide that the policyholders of the reorganized stock company shall become members of the mutual insurance holding company in accordance with the articles of incorporation and the code of regulations of the mutual insurance holding company.
(F) A reorganization plan shall provide that the mutual insurance holding company shall at all times own a majority of the voting stock of the reorganized stock company. Alternatively, a reorganization plan shall provide that the mutual insurance holding company shall at all times own a majority of the voting stock of an intermediate holding company, which intermediate holding company shall at all times own all of the voting stock of the reorganized stock company. The shares of voting stock required to be owned by the mutual insurance holding company, and by the intermediate holding company, if any, shall not be pledged, hypothecated, or in any way encumbered with regard to any obligation, guaranty, or commitment undertaken by or on behalf of the mutual insurance holding company, or the intermediate holding company, if any.
(G) The board of directors of a mutual insurance company shall file all of the following with the superintendent within ninety days after adopting a reorganization plan:
(1) The reorganization plan;
(2) The forms of notices to be provided to policyholders under division (B) of section 3913.27 of the Revised Code;
(3) The form of proxy, if any, to be solicited from policyholders;
(4) The proposed articles of incorporation and code of regulations for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company. The articles of incorporation and code of regulations shall be signed by the chairperson of the board, the president or vice-president, and by the secretary or an assistant secretary, of the mutual insurance company.
(5) Such other documents or information as the superintendent may require.
(H) Nothing in sections 3913.25 to 3913.38 of the Revised Code shall limit or restrict an intermediate holding company's authority under section 1701.13 of the Revised Code to form or acquire the control of other corporations, whether domestic or foreign, profit or nonprofit.
Effective Date: 09-16-1997
3913.27
Vote on reorganization plan.
(A) A reorganization plan adopted by a mutual insurance company's board of directors pursuant to section 3913.26 of the Revised Code shall be voted upon by a mutual insurance company's policyholders at a policyholders' meeting. A policyholder is entitled to cast only one vote, in person or by proxy, on the reorganization plan regardless of the number of policies or contracts that the policyholder may own or hold. Only proxies specifically related to the reorganization plan shall be used in determining whether the reorganization plan is approved pursuant to division (C) of this section.
(B) All policyholders shall be given notice of the policyholders' meeting to vote upon the reorganization plan at least thirty days prior to the date fixed for the policyholders' meeting. Notice of the time and place of such meeting shall be sent by mail to each policyholder at the policyholder's post office address as it appears on the books and records of the company. The notice shall include a summary of the reorganization plan adopted by the board of directors, including an analysis of the material financial aspects and potential for dilution of policyholders' interests in the mutual insurance company under the reorganization plan, a uniform ballot for voting on the question of the reorganization plan, and a statement informing the policyholders that the superintendent of insurance may fix a time and place for a public hearing on the reorganization plan, to be held within thirty days after the superintendent's receipt of written notice from the board of directors of the policyholders' approval of the reorganization plan.
(C) A reorganization plan shall be approved upon receiving the affirmative vote of at least a majority of the votes cast by policyholders.
(D)
(1) If a reorganization plan is approved at the policyholders' meeting, the board of directors of a mutual insurance company shall provide the superintendent with written notice of that approval within ten days after the policyholders' meeting.
(2) The superintendent may, within ten days after receiving the notice from the board of directors, provide written notice to the mutual insurance company of the superintendent's intent to conduct one or more public hearings on the reorganization plan. At a minimum, the superintendent's notice to the mutual insurance company shall include a time and a place for the first public hearing, which shall be held within thirty days after the superintendent's receipt of the notice from the board of directors.
(3) Within ten days after the mutual insurance company's receipt of a notice from the superintendent of the superintendent's intent to conduct one or more public hearings on the reorganization plan, if such notice is provided, the mutual insurance company shall provide notice of the time and place of such hearing by causing this information to be published once each week for two consecutive weeks in a newspaper published and of the largest circulation in the counties of Cuyahoga, Franklin, Hamilton, and Lucas, in the county in this state in which the mutual insurance company has its principal office, and in the newspaper of the largest circulation in the state capital of each state of the United States in which the company maintains an office or agency for the solicitation of insurance.
(E) The proposed articles of incorporation and code of regulations for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company, as filed with the superintendent pursuant to division (G)(4) of section 3913.26 of the Revised Code, shall also be voted upon by the mutual insurance company's policyholders at the policyholders' meeting held pursuant to this section. The articles of incorporation and code of regulations shall be adopted upon receiving the affirmative vote of at least a majority of the votes cast by policyholders.
(F) At all public hearings conducted by the superintendent pursuant to the superintendent's authority under division (D)(2) of this section, the superintendent may summon and compel the attendance and testimony of witnesses and the production of books and papers. The superintendent shall hear the testimony of persons claiming to be adversely affected by the reorganization plan, and of others wishing to comment on the reorganization plan. Such persons may present a position and offer comments concerning the reorganization plan, including a position and comments concerning whether the reorganization plan is fair and equitable to the mutual insurance company's policyholders and whether it complies with sections 3913.25 to 3913.38 of the Revised Code.
(G) A mutual insurance company's failure to provide a member or members with the notice required by this section shall not impair the validity of any action taken under sections 3913.25 to 3913.38 of the Revised Code, if the mutual insurance company has complied substantially and in good faith with all notice requirements. The determination as to such compliance shall be made by the superintendent.
Effective Date: 09-16-1997
3913.28
Approving reorganization plan.
(A) A mutual insurance company shall not proceed with a reorganization plan approved by the mutual insurance company's policyholders under section 3913.27 of the Revised Code until the reorganization plan has been reviewed by, and has received the approval of, the superintendent of insurance, and the articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company, have been examined and approved by the attorney general in accordance with this section.
(B) The superintendent shall approve a reorganization plan if, upon review, the superintendent finds all of the following:
(1) The adoption, approval, and contents of the reorganization plan comply with sections 3913.25 to 3913.38 of the Revised Code;
(2) The mutual insurance company has properly filed all documents, forms, and other information required by division (G) of section 3913.26 of the Revised Code;
(3) The reorganization plan is fair and equitable to the mutual insurance company's policyholders.
(C) The superintendent may retain qualified experts, at the mutual insurance company's expense, to assist in reviewing the reorganization plan.
(D) The superintendent shall approve or reject a reorganization plan not later than sixty days after the later of the approval of the reorganization plan by the mutual insurance company's policyholders or the completion of public hearings held in accordance with section 3913.27 of the Revised Code. The superintendent may extend this time period by an additional sixty days by providing written notice to the mutual insurance company.
(E) Upon deciding to approve or to reject a reorganization plan, the superintendent shall notify the mutual insurance company of the decision by regular mail. If the superintendent rejects a reorganization plan, the superintendent's notice shall detail the reasons for the rejection.
(F) A mutual insurance company shall file the following documents with the superintendent within thirty days after receiving notice from the superintendent of the superintendent's approval of a reorganization plan:
(1) The minutes of the policyholders' meeting at which the reorganization plan was approved;
(2) The articles of incorporation and code of regulations for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company, as adopted by the mutual insurance company's policyholders under section 3913.27 of the Revised Code.
(G)
(1) A mutual insurance company shall submit the articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company, as adopted by the mutual insurance company's policyholders under section 3913.27 of the Revised Code, to the attorney general for the attorney general's examination and approval. If, upon examination, the attorney general finds that the articles of incorporation are in accordance with applicable sections of the Revised Code, and not inconsistent with the constitution and laws of the United States and of this state, the attorney general shall approve of the articles of incorporation. The attorney general shall notify the mutual insurance company of the approval by regular mail.
(2) Upon obtaining the approvals of the superintendent and the attorney general under this section, the mutual insurance company's board of directors shall file the following with the secretary of state:
(a) A certificate of reorganization, signed by the chairperson of the board, the president or a vice-president, and the secretary or an assistant secretary of the mutual insurance company. The articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company, as adopted by the mutual insurance company's policyholders under section 3913.27 of the Revised Code, shall accompany the certificate of reorganization.
(b) A statement, signed by the chairperson of the board, the president or a vice-president, and the secretary or an assistant secretary, of the mutual insurance company, of the manner of the adoption of the articles of incorporation for the mutual insurance holding company and the reorganized stock company, and, if applicable, for an intermediate holding company;
(c) Copies of the approvals obtained from the superintendent and attorney general under this section.
(H) A reorganization plan shall be effective upon the filing of all of the documents and statements required by division (G) of this section, or at such later date as the certificate of reorganization may provide.
(I) After a reorganization plan takes effect, the superintendent shall have jurisdiction over the mutual insurance holding company, and, if applicable, over an intermediate holding company, in order to ensure that the interests of the mutual insurance company's policyholders are protected.
Effective Date: 09-16-1997
3913.29
Amendments to articles of incorporation.
(A) Proposed amendments to the articles of incorporation of a mutual insurance holding company may be adopted at any members' meeting. The board of directors of a mutual insurance holding company shall provide notice of any members' meeting conducting a vote on the adoption of an amendment to the articles of incorporation in a newspaper of general circulation published in the county where the company's principal place of business is located, at least thirty days prior to the members' meeting. Where the amendment is not inconsistent with the constitution and laws of this state and of the United States, the amendment may be adopted by the affirmative vote of at least three-fifths of the members present and voting at the meeting. After adopting an amendment, the board of directors shall submit the amendment to the attorney general for examination and approval.
(B) If, upon examination, the attorney general finds that the amendments adopted at the members' meeting are in accordance with applicable sections of the Revised Code, and are not inconsistent with the constitution and laws of the United States and of this state, the attorney general shall approve of the amendment to the articles of incorporation.
(C) Upon receiving the approval of the attorney general, the amendment and a certificate of the attorney general's approval shall be filed in the office of the secretary of state, and shall thereupon be in effect. After recording the amendment, the secretary of state shall deposit a copy thereof with the superintendent of insurance.
Effective Date: 09-16-1997
3913.30
Continuation of corporate existence, directors and officers.
(A) Upon a reorganization plan taking effect in accordance with section 3913.28 of the Revised Code, the corporate existence of the mutual insurance company shall continue in the reorganized stock company. On the effective date of the reorganization, all of the assets, rights, franchises, and interests of the mutual insurance company in and to every species of property, whether real, personal, or mixed, and any accompanying choses in action, shall be vested in the reorganized stock company, without any deed or transfer, and the reorganized stock company shall assume all the obligations and liabilities of the mutual insurance company.
(B) Unless otherwise specified in a reorganization plan, those persons who are the directors and officers of a mutual insurance company on the effective date of the reorganization shall serve as the directors and officers of the reorganized stock company until new directors and officers are elected pursuant to the reorganized stock company's articles of incorporation and code of regulations.
Effective Date: 09-16-1997
3913.31
Payment or reimbursement of costs and expenses.
All costs and expenses of the process of a reorganization under sections 3913.25 to 3913.38 of the Revised Code shall be paid for or reimbursed by the mutual insurance company, the reorganized stock company, or an intermediate holding company.
Effective Date: 09-16-1997
3913.32
Reorganization by merging or consolidating membership interests.
(A) A mutual insurance company may reorganize by merging its policyholders' membership interests into a domestic or foreign mutual insurance holding company and continuing the corporate existence of the mutual insurance company as a reorganized stock company. A mutual insurance company reorganizing under this section shall comply with all applicable provisions of sections 3913.25 to 3913.38 of the Revised Code, and all applicable laws of foreign jurisdictions, to effect the reorganization.
(B) A domestic or foreign mutual insurance holding company may reorganize by merging or consolidating its membership interests into another domestic or foreign mutual insurance holding company. A domestic or foreign mutual insurance holding company reorganizing under this division shall comply with all applicable provisions of sections 3913.25 to 3913.38 of the Revised Code, and all applicable laws of foreign jurisdictions, to effect the reorganization.
Effective Date: 09-16-1997
3913.33
Rights and status of membership.
A membership interest in a mutual insurance holding company is not a security under the laws of this state. No member of a mutual insurance holding company may transfer membership in the mutual insurance holding company or any right arising from membership.
Effective Date: 09-16-1997
3913.34
Applying other insurance laws.
(A) Sections 3913.11 to 3913.13 and 3913.20 to 3913.23 of the Revised Code shall apply to a mutual insurance holding company as if the mutual insurance holding company were a domestic mutual insurance company. The members of the mutual insurance holding company are deemed to be members of a domestic mutual insurance company for all purposes of such sections.
(B) A reorganization of a domestic mutual life insurance company subject to sections 3913.25 to 3913.38 of the Revised Code also is subject to sections 3907.09 to 3907.11 of the Revised Code, if applicable, but is not subject to sections 3901.32 to 3901.323 of the Revised Code.
(C) Notwithstanding division (B) of this section, for a period of five years following the effective date of a reorganization under sections 3913.25 to 3913.38 of the Revised Code, no person shall acquire control of a reorganized stock company without compliance with sections 3901.32 to 3901.323 of the Revised Code. For purposes of this division, "control" has the same meaning as in division (B) of section 3901.32 of the Revised Code, except that control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing five per cent or more of the voting securities of any other person.
(D) An intermediate holding company or, if there is no such company, a reorganized stock company shall not issue shares of stock, in addition to the shares issued pursuant to the reorganization plan under which the company was formed, without the prior approval of the mutual insurance holding company as its majority shareholder. The prior approval of the mutual insurance holding company must be evidenced by a resolution of the board of directors of the mutual insurance holding company delivered to the board of directors of the intermediate holding company or the reorganized stock company prior to the issuance of the additional shares.
(E) A mutual insurance holding company, and an intermediate holding company, if any, are deemed to be insurers subject to sections 3901.07, 3901.071, and 3901.48 of the Revised Code.
Effective Date: 09-16-1997
3913.35
Reorganization, dissolution, liquidation.
(A) A mutual insurance holding company, and, if applicable, its intermediate holding company, are deemed to be insurers subject to sections 3903.01 to 3903.76 of the Revised Code. A mutual insurance holding company and the intermediate holding company accordingly are deemed to be parties to any proceeding under sections 3903.01 to 3903.76 of the Revised Code involving an insurance company that is a subsidiary of the mutual insurance holding company or of the intermediate holding company as a result of a reorganization under sections 3913.25 to 3913.38 of the Revised Code.
(B) In any proceeding under sections 3903.01 to 3903.76 of the Revised Code involving a reorganized stock company, the assets of the mutual insurance holding company, and, if applicable, its intermediate holding company, are deemed to be assets of the reorganized stock company for purposes of satisfying claims of the policyholders of the reorganized stock company.
(C) A mutual insurance holding company, and, if applicable, its intermediate holding company, shall not be dissolved or liquidated without compliance with the provisions of Chapter 3903. of the Revised Code. Such companies are deemed to be domestic insurance companies for purposes of a dissolution or liquidation under Chapter 3903. of the Revised Code.
Effective Date: 09-16-1997
3913.36
Time limit for challenges.
Any action challenging the validity of, or arising out of, actions taken or proposed to be taken in connection with a reorganization under sections 3913.25 to 3913.38 of the Revised Code shall be commenced no later than thirty days after the effective date of the reorganization.
Effective Date: 09-16-1997
The superintendent of insurance may adopt rules in accordance with Chapter 119. of the Revised Code to carry out the purposes of sections 3913.25 to 3913.38 of the Revised Code.
Effective Date: 09-16-1997
3913.38
Attorney general may review transactions involving nonprofit health care entities.
The attorney general may, under authority granted under common law and sections 109.23, 109.24, 109.34, and 109.35 of the Revised Code, review any transaction, as defined in section 109.34 of the Revised Code, involving nonprofit health care entities. Nothing in section 3901.043 or sections 3913.25 to 3913.37 of the Revised Code shall be construed to limit the independent authority of the attorney general to protect and preserve charitable assets and charitable trusts of such entities. In addition, nothing in this section shall be construed to limit or expand any other common law or statutory authority of the attorney general.
Effective Date: 09-16-1997
(A) Any insurer, including any fraternal benefit society, that is organized under the laws of another state and is admitted to transact the business of insurance in this state may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a place in this state. Such a domestic insurer shall be issued like certificates and licenses to transact business in this state, is subject to the jurisdiction of this state, and shall be recognized as an insurer formed under the laws of this state as of the date of its original incorporation in its original domiciliary state. The superintendent of insurance shall approve any proposed transfer of domicile under this division unless the superintendent determines that the transfer is not in the interest of policyholders of this state.
(B) Any domestic insurer, upon the approval of the superintendent, may transfer its domicile to any other state in which it is admitted to transact the business of insurance. Upon such a transfer, the insurer shall cease to be a domestic insurer, and shall be admitted to this state if qualified as a foreign insurer. The superintendent shall approve any proposed transfer of domicile under this division unless the superintendent determines that the transfer is not in the interest of policyholders of this state.
(C)
(1) With respect to any insurer, including any fraternal benefit society, that is licensed to transact the business of insurance in this state and that transfers its domicile to this or any other state by merger, consolidation, or any other lawful method, both of the following apply:
(a) The certificate of authority, agents appointments and licenses, rates, and other items as allowed by the superintendent that are in existence at the time of the transfer shall continue in effect upon the transfer if the insurer remains qualified to transact the business of insurance in this state.
(b) All outstanding policies shall remain in effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the superintendent.
(2) Every transferring insurer as described in division (C)(1) of this section shall file new policy forms with the superintendent on or before the effective date of the transfer, but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as are approved by, the superintendent. Every such insurer shall notify the superintendent of the details of the proposed transfer, and shall file promptly any resulting amendments to corporate documents filed or required to be filed with the superintendent.
(D) Nothing in this section or any other provision of the Revised Code prohibits an insurer from transferring its domicile to this state because its charter, bylaws, or any other organizational document contains characteristics of both a mutual insurance company and a stock insurance company.
(E) The superintendent, in accordance with Chapter 119. of the Revised Code, may adopt rules to carry out the purposes of this section.
Effective Date: 06-30-1998