N.Y. Insurance Law § 7306: Conversion of advance premium corporations or assessment corporations into mutual property/casualty insurance companies

§ 7306. Conversion of advance premium corporations or assessment

corporations into mutual property/casualty insurance companies. Any

advance premium corporation or assessment corporation, as defined in

section six thousand six hundred two of this chapter, which has in force

contracts of insurance of the kinds which domestic mutual

property/casualty insurance companies, as defined in subsection (a) of

section one hundred seven of this chapter, may be authorized to do,

covering not less than three hundred separate risks and on which the

premiums in force or the most recent annual assessment aggregates not

less than one hundred thousand dollars, may be converted into and

licensed as a domestic mutual property/casualty insurance company 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 directors of the 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, charter and by-laws.

(b) The proposed declaration, charter and by-laws shall be submitted

with an appropriate resolution to the board for its approval.

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

shall approve by resolution the proposed declaration, charter and

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

relative to the contents of charters and by-laws of domestic mutual

property/casualty insurance companies hereafter organized, with such

additions as the superintendent shall approve to accommodate insurance

contracts then in force. 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 mailed, with postage prepaid, to all members at their last

known post office addresses respectively, at least thirty days prior to

the date of the meeting, together with copies of the resolutions

provided for in subsections (a) and (b) hereof and this subsection and

of the proposed declaration, charter and by-laws.

(d) At least two-thirds of the votes of 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 proof of mailing of notice of members' meeting

and copies of all other necessary papers and instruments incident to the

proposed conversion, together with a certificate of their adoption as

provided for herein, subscribed and affirmed by such officers 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 initial

surplus and reserve requirements for domestic mutual fire insurance

companies organized and licensed immediately before July first, nineteen

hundred eighty-two, to do the kinds of insurance business for which the

corporation is to be licensed, and complies with all other provisions of

this section, he shall approve the declaration and charter and by-laws

and file the same together with the other documents submitted as

required by subsection (e) hereof in his office, and coincident with

such filing such advance premium corporation or assessment corporation

shall become a domestic mutual property/casualty insurance company.

(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 mutual

property/casualty insurance company. Such corporation shall thereafter

be subject to all the provisions and requirements of this chapter

relative to mutual property/casualty insurance companies.