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The Legislative Service Commission staff updates the Revised Code on an ongoing basis, as it completes its act review of enacted legislation. Updates may be slower during some times of the year, depending on the volume of enacted legislation.

Chapter 3941 | Operation Of Mutual Insurance Companies

 
 
 
Section
Section 3941.01 | Operation of mutual insurance company definitions.
 

As used in sections 3941.01 to 3941.34, inclusive, of the Revised Code:

(A) "Company" includes corporations and associations.

(B) "Domestic" designates companies organized under the laws of this state.

(C) "Foreign" designates companies organized under the laws of another state or territory.

(D) "Alien" designates companies organized under the laws of any country other than the United States, or some state, province, or territory of such country.

(E) "Surplus" or "net assets" means the funds and assets, invested as required or permitted by the laws of the state, territory, or district where the company is organized, in excess of all liabilities including unearned premium reserve, but excluding from such assets all contingent liabilities of policyholders or members.

Section 3941.02 | Organization of domestic mutual company - kinds of insurance transacted - licensing of agent.
 

(A) A domestic mutual company may be organized by not less than twenty persons, to carry on the business of mutual insurance and to reinsure and to accept reinsurance as authorized by law and its articles of incorporation. Such persons shall execute articles of incorporation which, if not inconsistent with the constitution and laws of this state and of the United States, shall be approved by the attorney general and the secretary of state. The articles and the certificate of approval by the attorney general shall be recorded by the secretary of state who shall deposit a copy thereof with the superintendent of insurance.

(B) If the articles of incorporation of a domestic, foreign, or alien, mutual or stock insurance company empower it, or if the power of attorney or subscribers' agreement empowers the attorney in fact of a reciprocal or interinsurance exchange, to transact any of the kinds of insurance described in division (A) of section 3929.01 of the Revised Code, such company or attorney may apply to the superintendent for the appropriate license or certificate of authority, as provided in section 3925.11, 3927.01, 3931.10, or 3941.06 of the Revised Code, which application shall state which of the kinds of insurance it proposes to transact, and the superintendent shall act thereon in the manner prescribed by that section.

(C) An Ohio agent shall be licensed, upon written notice of appointment by a domestic, foreign, or alien, mutual or stock insurance company, to procure, receive, or forward application for the kinds of insurance the company is authorized to transact in this state if the agent is then licensed to write all of the kinds of insurance described in division (A) of section 3929.01 of the Revised Code, either for the company or for any other company or companies authorized to transact insurance business in this state. An Ohio agent not so licensed shall not procure, receive, or forward applications for any kind of insurance for the company until qualified and licensed to procure, receive, or forward applications for all of the kinds of insurance described in division (A) of section 3929.01 of the Revised Code, in accordance with the applicable provisions of Chapter 3905. of the Revised Code and in accordance with such rules as the superintendent may adopt in connection therewith; provided any company, irrespective of the kinds of insurance it is authorized to transact, may apply for and obtain the renewal of licenses of its agents who were licensed on or before July 1, 1945, to procure, receive, or forward applications for any of the kinds of insurance described in division (A) of section 3929.01 of the Revised Code, and such agents shall not be required to be licensed for all the kinds of insurance transacted by the company making the applications for such renewals. Nothing in this section shall be construed to authorize an agent whose license is renewed under these provisions to procure, receive, or forward applications for any kind or kinds of insurance other than the kind or kinds for which the agent was authorized to procure, receive, or forward applications on July 1, 1945; provided, the procuring, receiving, or forwarding of applications by such an agent for any kind or kinds of insurance other than the kind or kinds the agent was authorized to procure, receive, or forward, as of July 1, 1945, is cause for revocation of the license of the agent by the superintendent and the acceptance by any insurance company licensed to do business in this state of an application for any kind of insurance other than the kind or kinds that the agent was authorized to procure, receive, or forward, as of July 1, 1945, is cause for revocation of the license of the company by the superintendent. Nothing in this section shall be construed to alter the provisions of sections 3123.41 to 3123.50, 3123.63, 3931.101, and 3931.11 of the Revised Code.

Section 3941.03 | Amendment of articles.
 

The articles of incorporation of a domestic mutual company may be amended at any meeting of members, thirty days' notice of which, and of the business to come before it, has been given by a majority of the directors in a newspaper published and of general circulation in the county where the company's principal place of business is located. Such amendment, if adopted by at least three-fifths vote of the members present and voting at the meeting so called if not inconsistent with the constitution and laws of this state, and of the United States, shall be approved by the attorney general and secretary of state. Such amendment and the certificate of approval by the attorney general shall be filed in the office of the secretary of state, and shall thereupon be in effect. After recording such amendment the secretary of state shall deposit a copy thereof with the superintendent of insurance.

Section 3941.04 | Bond prerequisite to solicitation for insurance or acceptance of premiums.
 

No domestic mutual company shall solicit applications for insurance, or accept premiums, until it has filed with the superintendent of insurance its bond, with sureties, in the sum of ten thousand dollars, conditioned upon the faithful accounting for all funds and property which it may receive or possess, or until it has procured the certificate of the superintendent approving such bond and the sureties thereon. The premiums received on subscriptions for insurance shall be held by the company in trust for the respective subscribers until policies of insurance are issued to them.

Section 3941.05 | Legal existence of company - power of original incorporators - directors.
 

A domestic mutual company has legal existence, subject to the limitations prescribed in sections 3941.01 to 3941.34 of the Revised Code, from the filing of its articles of incorporation with the secretary of state. The original incorporators may fix and call the first meeting and adopt bylaws which thereupon shall be filed with the superintendent of insurance, and may elect the first officers and directors who shall continue in office until the first annual meeting of the members. The number of directors shall not be less than five nor more than twenty-one. The number of directors may be increased or diminished between the same limits by amendment of the code of regulations or bylaws pursuant to section 3941.09 of the Revised Code, if the number of directors is included in the code of regulations or bylaws of the mutual company, or pursuant to a vote of the majority of the members voting, in person or by proxy, at a meeting, if the number of directors is included in the articles of incorporation of the mutual company. No reduction in the number of directors shall of itself have the effect of shortening the term of any incumbent director.

If a mutual company's code of regulations or bylaws so provide, a mutual company may elect directors for a term of three years, the term of office of one third of the number elected to expire each year, and those who receive the highest number of votes at the first election to serve the longest term. The directors of a mutual company may choose, by ballot, a president of the company and also fill vacancies that arise in the board, or in the presidency of the company.

Section 3941.06 | Conditions for issuance or renewal of license.
 

No domestic mutual company shall issue policies or effect insurance until the superintendent of insurance has licensed it to do so; nor shall the license be issued or renewed unless the company complies, as to each kind of insurance that it effects, with the following conditions:

(A) It shall hold bona fide applications for insurance upon which it shall issue simultaneously, or it shall have in force, at least twenty policies to at least twenty members for the same kind of insurance upon not less than one hundred separate risks, each within the maximum single risk described in division (B) of this section.

(B) "The maximum single risk" shall not exceed twenty per cent of the admitted assets or three times the average risk or one per cent of the insurance in force, whichever is greater, any reinsurance taking effect simultaneously with the policy being deducted in determining the maximum single risk.

(C) It shall have collected a premium upon each application, which premium shall be held in cash or securities in which insurance companies are authorized to invest and shall be equal, in case of fire insurance to not less than twice the maximum single risk assumed subject to one fire, and in any other kind of insurance to not less than five times the maximum single risk assumed, nor shall the admitted assets in any case be less than two hundred thousand dollars. The requirement of admitted assets of not less than two hundred thousand dollars does not apply to any mutual fire insurance association organized under section 3939.01 of the Revised Code or to the renewal of licenses of any companies organized prior to September 1, 1961, under section 3941.02 of the Revised Code and licensed by the superintendent. Any mutual fire insurance association organized under section 3939.01 of the Revised Code, in order to reorganize as a mutual fire insurance company in accordance with section 3939.10 of the Revised Code, shall have assets as follows:

(1) Not less than fifty thousand dollars if authorized to transact the kind of insurance described in division (A)(1), (2), or (7) of section 3929.01 of the Revised Code;

(2) Not less than fifty thousand dollars if authorized to transact the kind of insurance described in division (A)(3), (4), (5), (6), (8), (9), (10), (11), (12), (13), (14), (15), (16), (17), (18), (21), (22), (23), (24), (25), or (26), of section 3929.01 of the Revised Code;

(3) Not less than one hundred thousand dollars if authorized to transact the kind of insurance described in division (A)(19) or (20) of section 3929.01 of the Revised Code.

Section 3941.07 | Every policyholder a member.
 

Every policyholder of a domestic mutual company is a member while his policy is in force, and is entitled to one vote, and no more.

Section 3941.08 | Advance cash premiums.
 

A domestic mutual company may, in its articles of incorporation, or in its bylaws, provide for a cash premium payable in advance and a contingent liability of the policyholder of not less than one, nor more than ten times the cash premium in each policy, and may further provide for policies not exceeding on any one risk five per cent of the company's assets, to be issued for cash premiums payable in advance without contingent liability of the policyholder.

Section 3941.09 | Amendment of bylaws.
 

The bylaws of a domestic mutual company may be amended at any meeting of the board of directors. Such amendment does not become effective unless it is approved by the superintendent of insurance.

Section 3941.10 | Maximum premium - cash premium.
 

The maximum premium payable by any member of a domestic mutual company may be a cash premium and an additional contingent premium not less than the cash premium, or may be solely a cash premium. No policy shall be issued for a cash premium without an additional contingent premium unless the company has a surplus which is not less in amount than the capital stock required of domestic stock insurance companies transacting the same kind of insurance.

Section 3941.11 | Stipulation or provision as to contingent liability.
 

Every domestic mutual company shall set forth in every insurance policy it issues upon a cash premium and contingent liability, either a stipulation of the contingent liability of the policyholder or the provision in the articles of incorporation or bylaws fixing the contingent liability. Such contingent liability shall cease with the expiration of the time for which a cash premium has been paid in advance, except for liability incurred during said time.

Section 3941.12 | Investment of assets.
 

No domestic mutual company shall invest any of its assets otherwise than as provided for the investment of assets of domestic insurance companies other than life. In computing the assets, liabilities, and surplus of such company, no contingent liability or unauthorized investments shall be considered.

Section 3941.14 | Expense shall not exceed forty per cent of premium income.
 

Subsequent to the first calendar year after organization, the expense of management of any domestic mutual company shall not exceed in any one calendar year forty per cent of its premium income in such year; provided that the income on policies issued on the premium note or assessment plan shall be computed according to the annual basic premium.

Section 3941.15 | Assessment by impaired company.
 

Any domestic mutual company having a contingent liability which is not possessed of assets above its unearned premium sufficient for the payment of incurred losses and expenses is deemed to be impaired and shall make an assessment for the amount needed to pay such losses and expenses upon its members liable to assessment, in proportion to and within the limits of their several liabilities.

Section 3941.16 | Issuance of policies by impaired company.
 

If the impairment of a domestic mutual company is not more than twenty-five per cent of such company's reinsurance reserve fund, computed according to law, the superintendent of insurance may permit it to continue to issue policies for such period, not exceeding ninety days, as he designates.

If such impairment is not restored within the period designated, or exceeds twenty-five percent of such reinsurance reserve, no such company shall issue new policies until such impairment is restored and until authorized to do so by the superintendent or by a court in a proper proceeding.

Section 3941.17 | Record of the order of assessment.
 

Every domestic mutual company shall record in a book kept for that purpose the order for an assessment required by section 3941.15 of the Revised Code, with a statement which sets forth the condition of the company at the date of the order, the amount of its assets and of its deposit notes or other contingent funds liable to the assessment, the amount which the assessment calls for, and the particular losses or other liabilities which it is to provide for. The record shall be made and signed by the directors who voted for the order before any part of the assessment is collected, and any person liable to the assessment may inspect and take a copy of the same.

Each policyholder is liable to pay his proportional part of any assessments which may be laid by the company in accordance with law and his contract, on account of losses and expenses incurred while he was a member, if he is notified of such assessment within one year after the expiration or cancellation of his policy. When an assessment is ordered, the directors shall forthwith cause written notice and demand for payment to be made upon each person subject thereto, by mail or personal service.

Section 3941.18 | Petition to have court examine assessment.
 

If the directors by authority of statute make an assessment or call on the members for money, or vote that there exists a necessity for such assessment or call, they or any person interested in the company as an officer, policyholder, or creditor may apply to a court of competent jurisdiction by a petition in the nature of a bill in equity, praying for the court to examine such assessment or call, the necessity therefor, and all matters connected therewith, and to confirm, amend, or annul the assessment or call, or to order the same to be made as law and justice require. If an application is made by any party except the company, a receiver, or the superintendent of insurance, the court may decline to exercise jurisdiction thereof. If the directors unreasonably neglect to make an assessment or call to satisfy an admitted or ascertained claim upon the company, any judgment creditor, any person holding such claim, or the superintendent, may make application to the court. Upon such application, if made by the directors, or upon an order of the court if made by any other person, the directors shall set forth the claims against the company, its assets, and all other facts and particulars appertaining to the matter.

The court before which such application is filed shall order notice to be given by publication or otherwise to all parties interested, and upon the return thereof shall examine the assessment or call, and the necessity therefor, and all matters connected therewith. Any parties interested may appear and be heard thereon. All questions that arise shall be heard and determined as in other equity cases.

The application shall be referred to a master who shall appoint a time and place to hear all parties interested, and who shall give personal notice thereof in writing to the superintendent, and through the post office, so far as he is able, to all persons liable upon said assessment or call. The master shall hear the parties, and report upon the correctness of the assessment or call, and all other matters connected therewith. The court may confirm, amend, or annul the assessment or call, or order one to be made. It may make such orders and decree as under all circumstances justice and equity require. If the assessment or call is altered or amended, or one is ordered to be made, the directors shall forthwith proceed to vote the same in legal form, and the record of such vote shall be set forth in a supplemental bill or answer.

When an assessment or call has been so confirmed, ascertained, or established, a decree shall be entered which shall be conclusive upon the company and all persons liable to the assessment or call, as to the necessity of the same, the authority of the company to make or collect the same, the amount thereof, and all formalities connected therewith. An assessment or call altered or amended by vote of directors and decree of the court shall be binding upon all parties who would have been liable under it as originally made, and in all legal proceedings shall be held to be such original assessment or call. All such proceedings shall be at the cost of the company and in all cases the court may control the disposition of the funds collected under such proceedings.

If the court finds that the net proceeds of any assessment or call will not be sufficient to furnish substantial relief to those having claims against the company, it may decree that no assessment shall be collected. If, upon the application of the superintendent, a member of the company, or any person interested, the court is of the opinion that further attempts to collect an assessment then partially collected will not benefit those having claims against the company, it may stay the further collection of said assessment.

Section 3941.19 | Personal liability of trustees or directors.
 

The trustees or directors of any domestic mutual company are personally liable for any loss upon risks taken after the superintendent of insurance has issued his requisition to restore any deficiency in the assets and before such deficiency is restored. This section does not require any mutual fire insurance company, doing business on the premium note plan, to keep on hand any cash reinsurance reserve or funds invested in securities, other than their premium notes, when the premium notes amount in gross to three per cent of the amount at risk by the company.

Section 3941.20 | Admission of a foreign company.
 

A foreign mutual company shall be admitted to transact the kinds of insurance authorized by its charter or articles of incorporation to the extent and with the privileges and powers permitted by law to domestic mutual companies when such company is solvent and shall transact its business according to the requirements of law applicable to like domestic mutual insurance companies.

Section 3941.21 | Alien mutual company admitted to do business.
 

An alien mutual company, transacting the business of insurance authorized in sections 3941.01 to 3941.34, inclusive, of the Revised Code, on the mutual plan, in accordance with the laws of the country, state, or province in which it was organized, may be admitted to transact such business within this state upon complying with the laws applicable to it when its assets, invested according to the laws of the state where its assets are held in the United States, pledged for the payment of its liabilities in the United States, exceed its liabilities in the United States by three hundred thousand dollars.

Section 3941.22 | Revocation of license of foreign or alien company.
 

Whenever the superintendent of insurance finds that any foreign or alien mutual company doing business in this state does not have the qualifications required of such company for admission to this state, or that it has not complied with the law, he may revoke its license to transact business in this state.

Section 3941.23 | Every domestic, foreign, or alien company shall contain the word mutual.
 

The name of every domestic, foreign, and alien mutual company shall contain the word "mutual."

This section does not apply to any company licensed prior to May 22, 1914, to do business in this state, whose name did not contain the word "mutual," as of said date unless it issues policies which are subject to contingent liability or assessment.

Section 3941.24 | Company having name similar to that of another not permitted.
 

No domestic, foreign, or alien mutual company may transact business in this state if its name is so similar to any name already in use by any company organized or doing business in the United States as to be confusing or misleading to the public, unless the company whose name is so similar consents thereto. The superintendent of insurance and the secretary of state shall determine all questions respecting such similarity of names, and if they fail to agree, the attorney general shall determine whether any proposed name may be adopted or used.

Section 3941.25 | Retaliatory law shall not apply.
 

No retaliatory law of this state, relating to insurance companies, shall apply to any mutual company organized under the laws of any state which has a similar law exempting mutual fire insurance companies from the retaliatory laws of such state.

Section 3941.26 | Application of other laws.
 

The laws of this state governing corporations and the laws relating to insurance, to the extent they are applicable to any mutual companies and not in conflict with sections 3941.01 to 3941.34, inclusive, of the Revised Code, are hereby made specifically applicable to such mutual companies.

Section 3941.27 | Companies and associations not affected.
 

Sections 3941.01 to 3941.29 of the Revised Code do not affect any company doing business within this state on the premium note plan or any mutual protective association organized or doing business under sections 3939.01 to 3939.11 of the Revised Code, unless that company or association elects to reorganize under sections 3941.01 to 3941.29 of the Revised Code. The sections repealed by Volume 104, Ohio Laws, page 208, section 28, shall remain in force, so far as applicable, to any such company or association not so electing.

Section 3941.28 | Companies deemed to be organized under laws of this state.
 

Every mutual fire insurance company created by or organized under a general or special law of this state, and doing business in this state upon or without the premium note plan, which by its policy, bylaws, or public statements of its financial affairs claims the benefit of the guarantee fund or the contingent liability of its policyholders as provided for in sections 3941.01 to 3941.34, inclusive, of the Revised Code, shall be held as having organized under the laws of this state and be governed by the portions thereof as applicable to such company.

Last updated February 23, 2022 at 3:20 PM

Section 3941.29 | Refusal to make report forfeits charter.
 

Any mutual company which neglects to make and forward to the superintendent of insurance an annual report of its affairs, as required by law, or refuses to allow him free access to its books and papers, and to investigate its financial standing if organized under the laws of this state, shall forfeit its charter, and the superintendent shall proceed without delay to bring its affairs to a close.

Section 3941.30 | Deposit of securities to transact business outside state.
 

A domestic mutual fire insurance company, for the protection of all its policies, may deposit with the superintendent of insurance, securities of the kind described in this section, in such sum as is necessary to enable such company to transact business in any other state under the laws of said state.

Said securities shall consist of United States bonds, bonds of this state, or bonds of county or city of this state, issued in conformity with law, not estimated above their par value, which, before being deposited, shall be registered by the company in favor of "the superintendent of insurance of the state of Ohio in trust for the benefit and security of all the policyholders of said company."

The superintendent shall execute his receipt therefor to the depositing company, safely keep such securities as provided by law until they are withdrawn by the depositing company as provided in section 3941.34 of the Revised Code, and shall keep in his office a record in which shall be entered the name of the company so owning and depositing such securities, the name of the debtor, the par value and serial number of each such security, the date of its maturity, and the date of maturity and amount of each installment of interest to become due.

Section 3941.31 | Collection and deposit of principal and interest.
 

The superintendent of insurance shall collect and pay over to the depositing company the principal and interest on securities deposited in compliance with section 3941.30 of the Revised Code as they mature, but before receiving the proceeds of the principal sum of any deposited security, the company shall substitute securities of the required character equal in amount to those maturing.

The depositing company at any time may exchange for any securities deposited other securities of like character which shall be deposited and handled in all respects as the original deposit.

Section 3941.32 | Certification of deposits.
 

Upon request of the depositing domestic mutual fire insurance company, the superintendent of insurance shall certify under the seal of his office to the insurance department of any other state, or to any other interested person, to the fact of such deposit, and the amount and description of the securities on deposit.

Section 3941.33 | Annual examination of securities.
 

Every domestic mutual fire insurance company having securities deposited in the office of the superintendent of insurance, may, once during each calendar year, at such proper time as the company selects, cause its securities so deposited to be examined by its president, its secretary, or other agent whom it designates for that purpose.

Section 3941.34 | Surrender of securities upon termination of liability - examination of records.
 

No part of the securities deposited in compliance with section 3941.30 of the Revised Code shall be surrendered by the superintendent of insurance to the depositing company until liability has terminated on all policies for whose benefit the securities have been deposited. When liability on all such policies has terminated, the depositing company may apply to the superintendent for the surrender of the deposited securities, and the president or principal officer and the secretary of the company shall make oath that all liability on such policies has terminated. The superintendent shall cause an examination to be made of the records and files of the company and if it appears that liability no longer exists, the superintendent shall surrender such securities to the depositing company. The superintendent, ninety days prior to the time of surrendering same, shall advise, by registered mail, all persons who may have been notified of the fact of such deposit under section 3941.32 of the Revised Code, of the contemplated withdrawal.

Section 3941.35 | Merger or consolidation of companies.
 

Any mutual insurance company organized under Chapter 3941. of the Revised Code may merge or consolidate with any other mutual insurance company or companies, foreign, alien, or domestic, subject to the requirements of sections 3941.35 to 3941.46, inclusive, of the Revised Code. The surviving or resulting company may be a continuation of the corporate existence of one of the parties to the agreement, and may be either a domestic, foreign, or alien company. Sections 3941.35 to 3941.45, inclusive, of the Revised Code apply to mergers or consolidations in which a domestic mutual company is a party. Section 3941.46 of the Revised Code applies to mergers or consolidations in which a foreign or alien mutual company licensed in this state is a party, but no domestic company is a party.

Section 3941.36 | Written agreement - name.
 

The companies merging or consolidating shall enter into a written agreement prescribing the terms and conditions thereof, including the name of the surviving or resulting company and its amended articles of incorporation, if any.

Section 3941.37 | Approval of agreement by directors and members.
 

(A) Domestic mutual companies shall approve the agreement by a vote of a majority of the directors, and by the votes of at least two-thirds of the members voting, in person or by proxy, at a regular or special meeting not less than thirty days prior to which members shall have been given notice that the merger will be considered at that meeting. The notice may be given by publication once a week for two successive weeks in a newspaper of general circulation in the county where the company's principal place of business is located and in any two of the four cities of greatest population according to the latest United States census in each state in which the company is licensed, or by depositing notice in a United States Post Office, postage prepaid, and addressed to the member at his address according to company records, or by personal delivery.

(B) Approval of the agreement by foreign or alien companies and notice to members thereof shall be in accordance with the law of the state of domicile. Compliance with such law shall be shown by the certificate of the president or secretary of each such company which certificate shall state the facts constituting such compliance and which shall be attached to the copies of the agreement filed with the superintendent.

Section 3941.38 | Agreement and petition for approval - disapproval of petition.
 

(A) The agreement shall be filed in duplicate with the superintendent with a petition for approval thereof, which petition shall contain the plan of merger and the mode of carrying it into effect, the certificate of the president or secretary of each company stating the facts constituting compliance with the provisions of section 3941.37 of the Revised Code and may contain other pertinent matters.

(B) On receipt of the petition the superintendent shall determine whether there has been compliance with the requirements of sections 3941.36 and 3941.37 of the Revised Code and this section, and shall within sixty days approve the petition or give petitioners notice of a hearing theron. The superintendent shall disapprove the petition only if:

(1) Sections 3941.36 and 3941.37 of the Revised Code have not been complied with;

(2) The proposed merger or consolidation will be inequitable to the members of the domestic mutual company or companies in that it will result in a substantial reduction of the equity of such member without reasonably compensating benefits or advantages;

(3) The proposed merger or consolidation will reduce service to the policyholders of the domestic company or companies or the protection of existing insurance policies of the domestic company or companies;

(4) As to any line of insurance in any state, the merger or consolidation may substantially lessen competition or tend to create a monopoly.

Disapproval of the petition shall be made only on findings taken in a hearing as provided in section 3941.40 of the Revised Code.

Section 3941.39 | Transfer of license to surviving or resulting company.
 

Licenses to do business as an insurer in this state held by any of the constituent companies of a merger or consolidation consummated pursuant to this chapter shall be transferred to or continued in the name of the surviving or resulting company. If the superintendent believes the surviving or resulting company is not entitled to any of such licenses, he shall follow the procedures for revocation or suspension thereof.

Section 3941.40 | Hearing - notice - judicial review.
 

Any hearing for the purposes of section 3941.38 of the Revised Code shall be held within ninety days after filing of the petition for approval, and after notice to the constituent companies of not less than thirty days of the time and place thereof. Within thirty days after the hearing the superintendent shall either approve the petition or make and promptly furnish to the constituent companies written findings of the specific facts upon which the order of disapproval is based. The notice of hearing shall state with particularity each point of law or matter of fact to be considered. Any of the constituent companies shall have the right of judicial review as provided in sections 119.01 to 119.13, inclusive, of the Revised Code.

Section 3941.41 | Company to designate effective date.
 

The company shall designate the date and hour the merger or consolidation is to become effective, not more than one year from the date of approval by the superintendent, by delivery to the superintendent of duplicate written notices signed by the president or secretary of each company. Said notices shall be affixed by the superintendent to the agreements on file with him.

Section 3941.42 | Proceedings upon merger or consolidation.
 

Upon merger or consolidation:

(A) The separate existence of the constituent companies shall cease and they shall thereafter be a single company in accordance with such agreement, which company shall have all of the debts, duties, obligations, and liabilities of, and all of the rights, privileges, powers, franchises, immunities, property and assets formerly belonging to the separate companies, provided that all liens on the property of the constituent companies are limited to the property to which it attached immediately prior to the merger or consolidation. Rights of action by or against the constituent companies may be brought or continued by or against the surviving or resulting company in its name.

(B) The policyholders of the constituent companies shall continue to be subject to all the liabilities, claims and demands existing against them at or before such merger or consolidation.

(C) All deposits which may have been made in this state by any constituent company shall be held for the account of the surviving or resulting company which shall be entitled to the return of any such deposits in excess of those required, if any, to comply with the laws of this state.

Section 3941.43 | Continuation of oldest of constituent companies.
 

For the purposes of any law the application of which depends upon the length of time the company has been licensed or doing business, the surviving or resulting company shall be regarded as a continuation of the oldest of the constituent companies.

Section 3941.44 | Filing copy of agreement.
 

On or before the effective date of the merger or consolidation, the superintendent shall file with the secretary of state one of the copies of the agreement on file with him, with the notice of effective date. Within fifteen days after the effective date of the merger or consolidation, a copy of the agreement certified by the superintendent shall be filed by the resulting or surviving company in any public office where the articles of incorporation are required to be recorded. Copies of the agreement shall also be filed for record in the office of the appropriate county official in each county where any of the constituent companies owns real property the title to which will be transferred by the merger or consolidation.

Section 3941.45 | Certificate of fees paid to any person in connection with securing or promoting of merger or consolidation required to be filed.
 

Attached to the petition for approval filed with the superintendent shall be a certificate of the president or secretary of each constituent company setting forth all fees, commissions, or other compensation or valuable consideration paid or to be paid to any person in connection with the securing or promoting of any such merger or consolidation. Except as fully stated in said certificate or in the agreement, no director or officer of any constituent companies shall receive directly or indirectly any fee, commission, compensation, or valuable consideration for in any manner aiding, promoting, or assisting therein.

Section 3941.46 | Filing copy of agreement of merger or consolidation of foreign or alien mutual company licensed in state.
 

Any foreign or alien mutual company licensed in this state which is a party to a merger or consolidation shall on or before the effective date thereof file with the superintendent a copy of the agreement. If the surviving company is, at the effective date of the merger or consolidation, licensed as an insurer in this state its license shall continue in effect as though no merger or consolidation had taken place, and on request the superintendent shall transfer to it any additional licenses issued by this state and then held by any nonsurviving insurer which is a party to the merger or consolidation. Revocation or suspension of any of such licenses shall be made only pursuant to the procedures and on the grounds provided in this code, provided, that an additional ground for revocation or suspension of license shall be that the merger or consolidation may have the effect of substantially lessening competition or tending to create a monopoly as to any line of insurance in this state. On receipt of a copy of the agreement of merger or consolidation to which this section applies, the superintendent shall determine whether such revocation or suspension proceedings should be commenced. In making such determination the superintendent may consider any information on file with any agency, division or department of this or any other state, together with any additional relevant information which shall be furnished by the company or companies, pursuant to the superintendent's request. A determination that the merger or consolidation does not violate the additional ground provided in this section shall be conclusively established by the lapse of three months after the effective date of the merger or consolidation without commencement of proceedings to revoke or suspend the license or licenses on that ground.

Section 3941.47 | Discontinuing contract with hospital.
 

(A) As used in this section, "median price" means the median price charged to the mutual insurance company during the twelve months preceding the notice of intention to discontinue the contract by all other hospitals providing a similar service or services in the same county and the contiguous counties.

(B) Any mutual insurance company which merged or consolidated with a hospital service association may not discontinue before January 1, 1990, the contractual relationship which was in effect between the hospital service association and any hospital, pursuant to Chapter 1739. of the Revised Code, unless the hospital fails to participate in cost management programs provided by the mutual insurance company to its insureds, or the hospital is not operated in a cost effective manner, or the hospital offers services to insureds of the mutual insurance company which, in the exercise of its business judgment, the mutual insurance company believes are priced more expensively than is in the best interests of its policyholders. In determining whether a hospital's prices are more expensive than is in the best interests of its policyholders, the mutual insurance company may conclusively base its decision on the following criterion: whether the price the hospital charges the mutual insurance company for a service or services provided to insureds of the mutual insurance company is greater than the median price. The mutual insurance company shall, at least ninety days prior to the proposed effective date set forth in a notice of intent to discontinue a contract with a hospital, notify in writing the hospital and the superintendent of insurance of the intention to discontinue the contract. The notice of intention to discontinue a contract shall include the median price. In determining whether to discontinue the contract of a hospital, the mutual insurance company shall, in the exercise of its business judgment, determine the hospital's price on a case-mix adjusted basis, including, where appropriate, giving reasonable and uniform credit for a portion of a hospital's reasonable charity care and medical education expense.

In applying the conclusive price criterion, the mutual insurance company shall not discontinue any hospital's contract prior to January 1, 1990, if that hospital's price is at or below the median price, or the hospital agrees within ninety days from the date of receipt of a notice of intention to discontinue the contract, to provide services to policyholders of the mutual insurance company at a price, adjusted for case mix, including where appropriate, giving reasonable and uniform credit for a portion of a hospital's reasonable charity care and medical education expenses, not greater than the median price.

A discontinuance pursuant to this section shall not be effective until the next annual renewal date of the contract between the mutual insurance company and the hospital or on the thirty-first day of December if the contract has no expiration date.

If a hospital receives a notice of intention to discontinue as provided in this section, it may appeal the decision to the superintendent of insurance within thirty days from the date it receives notice of the discontinuance. The superintendent shall, within thirty days after receipt of notice of appeal, hold a hearing upon proper notice. The superintendent shall, within twenty days after the hearing, issue an order approving or disapproving the discontinuance. All final orders and decisions of the superintendent are subject to judicial review as provided in Chapter 119. of the Revised Code.

Section 3941.48 | Contract with only hospital operating in county.
 

A mutual insurance company which has merged or consolidated with a hospital service association shall not either before or after January 1, 1991, terminate its contract with a hospital based upon such hospital's price in relation to the prices of other hospitals operating in the same geographical area, where such hospital is the only hospital operating in a county in this state.

Section 3941.49 | Contract with only osteopathic hospital operating in county.
 

A mutual insurance company which has merged or consolidated with a hospital service association shall not terminate its contract entered into under Chapter 1739. of the Revised Code with a hospital based upon such hospital's charges in relation to the charges of other hospitals operating in the same geographical area, where such hospital is the only osteopathic hospital operating in a county in this state. For purposes of this section, "osteopathic hospital" means one in which more than seventy-five per cent of the physicians are licensed osteopathic physicians.

Section 3941.50 | Reimbursement for emergency services.
 

No policy of insurance issued or renewed by a mutual insurance company which has merged or consolidated with a hospital service association which provides for reimbursement for emergency services, may provide for a denial or reduction of benefits under such policy for such emergency services or any resulting emergency admission directly from a hospital emergency room when such services and resulting admission are provided at or by a hospital which does not have a contractual relationship with such mutual insurance company. Reimbursement for such services shall continue so long as the attending physician reasonably determines that the patient is unstable and unable to be transferred.

Section 3941.51 | Reimbursing teaching hospitals.
 

Any mutual insurance company which merged or consolidated with a hospital service association shall take into consideration the case mix, education, and indigent care responsibilities of the state's teaching hospitals and institutions recognized as national referral centers as defined by the"Social Security Act," 49 Stat. 620 (1935), 42 U.S.C. 301, as amended, in determining their rates of reimbursement.

Section 3941.52 | Unlawful contracts.
 

If any existing contract or any provision of any existing contract between a mutual insurance company subject to section 3941.47 of the Revised Code and a hospital is determined unlawful as a consequence of the repeal of Chapter 1739. of the Revised Code, then only such provisions of the agreement that have thereby directly or indirectly become unlawful or provisions that flow therefrom are void, and the balance of such provisions remain in effect subject to section 3941.47 of the Revised Code.