KRS 304.24-603: Amendment of articles of incorporation -- Plan of conversion.

(1) The board of directors of the converting mutual shall adopt a resolution proposing

the amendment of its articles of incorporation in accordance with KRS 304.24 -080

and proposing a plan of conversion.

(2) The plan of conversion shall:

(a) Describe the manne r in which the proposed conversion shall occur and the

insurer and any other business entity that will result from or be directly

affected by the conversion, including the former mutual and any affiliate;

(b) Provide that the membership interests in the co nverting mutual shall be

extinguished as of the effective date of the conversion;

(c) Require the fair and equitable distribution of aggregate consideration to the

eligible members, upon the extinguishing of their membership interests, which

shall be equal to the fair value of the converting mutual as determined under a

fair formula:

1. Describe the manner in which the fair value of the converting mutual

shall be determined or established;

2. Describe the form or forms of consideration that shall be distrib uted to

the eligible members; and

3. Specify relevant classes, categories, or groups of eligible members, and

describe the method or formula that shall be used for the equitable

allocation of the aggregate consideration among the eligible members;

(d) Provide for the determination and preservation of the reasonable dividend

expectations of eligible members and other policyholders with policies that

provide for the distribution of policy dividends that shall be implemented

through establishment of a closed b lock or other method acceptable to the

commissioner in compliance with KRS 304.24-600 to 304.24-625;

(e) Specify the effective date of the plan of conversion and distributions to

eligible members; and

(f) Include all other provisions that are necessary for , or material to, the

implementation of the conversion.

(3) The plan of conversion may include any other provisions that the converting mutual

deems necessary or reasonable.