KRS 304.37-505: Reorganization of domestic mutual insurance company by forming

mutual insurance holding company -- Hearing -- Approval.

(1) A domestic mutual insurance company, upon approval of the commissioner, may

reorganize by forming an insurance holding company based upon a mutual plan and

continuing the corporate existence of the reorganizing insurance company as a stock

insurance company. The commissioner, after a public hearing conducted in

accordance with KRS Chapter 13B, if satisfied that the interests of the policyholders

are properly protected and that the plan of reorganization is fair and equitable to the

policyholders, may approve the proposed plan of reorganization and may require as

a condition of approval modification of the proposed plan of reorga nization as the

commissioner finds necessary for the protection of the policyholders' interests. A

reorganization under this section is subject to KRS 304.37 -120(1), (2), (3), (6), and

(7). The commissioner shall retain jurisdiction over a mutual insurance holding

company organized under this section to assure that policyholder interests are

protected.

(2) All of the initial shares of the capital stock of the reorganized insurance company

shall be issued to the mutual insurance holding company. The membersh ip interests

of the policyholders of the reorganized insurance company shall become

membership interests in the mutual insurance holding company. Policyholders of

the reorganized insurance company shall be members of the mutual insurance

holding company in accordance with the articles of incorporation and bylaws of the

mutual insurance holding company. The mutual insurance holding company shall at

all times own a majority of the voting shares of the capital stock of the reorganized

insurance company.

(3) A domestic mutual insurance company, upon the approval of the commissioner,

may reorganize by merging its policyholders' membership interests into a mutual

insurance holding company formed under this section and continuing the corporate

existence of the reor ganizing insurance company as a stock insurance company

subsidiary of the mutual insurance holding company. The commissioner, after a

public hearing conducted in accordance with KRS Chapter 13B, if satisfied that the

interests of the policyholders are prop erly protected and that the merger is fair and

equitable to the policyholders, may approve the proposed merger and may require as

a condition of approval modification of the proposed merger as the commissioner

finds necessary for the protection of the poli cyholders' interests. A merger under

this section is subject to KRS 304.37 -120(1), (2), (3), (6), and (7). The

commissioner shall retain jurisdiction over a mutual insurance holding company

organized under this section to assure that policyholder interests are protected.

(4) A merger of policyholders' membership interests in a mutual insurance company

into a mutual insurance holding company shall be deemed to be a merger of the

insurance companies under Subtitle 37 of KRS Chapter 304.