KRS 304.24-360: Mutualization of stock insurer.

(1) A stock insurer may become a mutual insurer under such reasonable plan and

procedure as may be approved by the commissioner after a hearing thereon.

(2) The commissioner shall not approve any such plan or procedure of mutualization

unless:

(a) The commissioner finds that it is equitable to stockholders and policyholders;

(b) It is subject to approval by the holders of not less than three -fourths (3/4) of

the insurer's outstanding capital stock having voting rights, and by not less

than two-thirds (2/3) of t he insurer's policyholders, who vote on such plan in

person, by proxy, or by mail, pursuant to such reasonable notice and procedure

as may be approved by the commissioner;

(c) If a life insurer, the right to vote thereon is limited to holders of policies, other

than term or group policies, whose policies have been in force for more than

one (1) year;

(d) Mutualization will result in retirement of shares of the insurer's capital stock

at a price not in excess of the fair market value thereof as determined by

competent disinterested appraisers;

(e) The plan provides for the purchase of the shares of any dissenting stockholder

in the same manner and subject to the same applicable conditions as provided

by KRS Chapter 271B as to rights of dissenting stockholders with respect to

merger or consolidation of business corporations;

(f) The plan provides for definite conditions to be fulfilled by a designated early

date upon which such mutualization will be deemed effective; and

(g) The mutualization leaves the insurer with surplus funds reasonably adequate

for the security of its policyholders and to enable it to continue successfully in

business in the states in which it is then authorized to transact insurance and

for the kinds of insurance included in its certificat es of authority in such

states.

(3) This section shall not apply to mutualization under order of court pursuant to

rehabilitation or reorganization of an insurer under Subtitle 33 of this chapter.