N.Y. Insurance Law § 7305: Conversion of assessment corporations into advance premium corporations

§ 7305. Conversion of assessment corporations into advance premium

corporations. Any assessment corporation, as defined in section six

thousand six hundred two of this chapter, licensed under section six

thousand six hundred three of this chapter to do the business of fire

insurance may be converted into and licensed as an advance premium

corporation, as defined in section six thousand six hundred two of this

chapter, in the manner prescribed in this section and subject to any

other requirements of law. The successive steps shall be as follows:

(a) A majority of the board of such assessment corporation shall adopt

a resolution approving the proposed conversion and appointing a

committee of not less than three directors to prepare a draft of a

proposed declaration and charter and proposed by-laws.

(b) Such committee's proposed declaration, charter and by-laws shall

be submitted with an appropriate resolution to the board of directors

for approval.

(c) A majority of the board at any regular or special meeting thereof

shall approve by resolution a proposed declaration and charter and

proposed by-laws, which shall conform to the requirements of this

chapter relative to the contents of charters and by-laws of advance

premium corporations hereafter organized, with such modifications as the

superintendent, by regulation, shall prescribe to make such requirements

applicable to the nature and character of such conversion proceeding.

Such resolution shall also direct that notice that the proposed

conversion will be submitted for approval at the next annual meeting of

members or at a special meeting to be called for that purpose be given

to all members pursuant to section six hundred five of the business

corporation law, together with copies of the resolutions referred to in

subsections (a) and (b) hereof and in this subsection, and of the

proposed declaration, charter and by-laws.

(d) At least two-thirds of the votes of the members voting at such

meeting either in person or by proxy, if the corporation's by-laws

provide for a vote by proxy, shall be cast in favor of the proposed

conversion and of the adoption of the proposed declaration and charter

and proposed by-laws. A resolution shall similarly be adopted

instructing the president and secretary to execute or certify and file

all necessary papers and instruments incident to the proposed

conversion.

(e) The proposed declaration and charter executed by the president and

secretary, together with copies of all other necessary papers and

instruments incident to the proposed conversion, subscribed and affirmed

by each as true under the penalties of perjury, shall be submitted to

the superintendent.

(f) If the superintendent finds, by such investigation or examination

as he deems appropriate to make, that the corporation meets the minimum

surplus requirements of section six thousand six hundred four of this

chapter, he shall file in his office the declaration, charter, by-laws

and other documents submitted as required by subsection (e) hereof, and

coincident with such filing such assessment corporation shall become an

advance premium corporation. For an assessment corporation initially

licensed to do business in this state prior to July first, nineteen

hundred eighty-two such minimum surplus requirements and minimum capital

investment requirements shall be those applicable to an advance premium

corporation initially licensed to do business in this state prior to

such date.

(g) Upon compliance by the corporation with the foregoing and with any

other lawful prerequisites for the issuance of an insurer's license, the

superintendent may, in accordance with subsection (d) of section one

thousand one hundred two of this chapter, grant a license to such

advance premium corporation to do the kinds of insurance business

specified in its charter. The territory in which such corporation shall

be licensed shall be that for which it was licensed when an assessment

corporation immediately prior to its conversion as herein provided, but

if it has a surplus of at least one hundred fifty thousand dollars it

may be licensed by the superintendent to do business throughout the

state, subject to the requirements of section six thousand six hundred

ten of this chapter and to all the provisions and requirements of this

article relative to advance premium corporations.