{"data":{"id":"us-ky/krs-304.24-605","jurisdiction":"us-ky","citation":"KRS 304.24-605","heading":"Application for approval of plan of conversion -- Actuarial opinion.","body":"(1) The converting mutual shall file with the commissioner an application for approval\nof the plan of conversion.\n(2) The application shall consist of the following:\n(a) The plan of conversion;\n(b) A certificate of the secretary of the converting mutual regar ding the adoption\nof the plan of conversion;\n(c) A statement of the reasons for the proposed conversion and why it is in the\nbest interests of the converting mutual and its eligible members, including an\nanalysis of the risks and benefits to the converting  mutual and its members\nand a comparison of the risks and benefits of reasonable alternatives to a\nconversion;\n(d) A five (5) year business plan of the former mutual, including five (5) year\nfinancial projections, detailed descriptive narrative, and all re levant\nassumptions;\n(e) Any plans or proposals that the former mutual or any affiliate company may\nhave to raise additional capital through the issuance of stock or otherwise; and\nany other plans that the former mutual or any affiliate company may have to\nsell or otherwise issue stock to any person, including the adoption of any\nemployee compensation or benefit plan under which stock may be issued;\n(f) Any plans or proposals that the former mutual or any affiliate company may\nhave to liquidate or dissolve a ny company, to sell any material assets, or to\nmerge or consolidate with any person, or to make any other material change in\ninvestment policy, business, corporate structure, or management;\n(g) Any plans or arrangement for a delayed distribution of conside ration to\neligible members, or restrictions on sale or transfer of stock or other\nsecurities;\n(h) A plan of operation for any closed block established for the preservation of the\nreasonable dividend expectations of eligible members and other policyholders\nwith policies that provide for the distribution of policy dividends;\n(i) Copies of the current articles of incorporation and bylaws of the converting\nmutual;\n(j) Copies of any proposed articles of incorporation and bylaws of the former\nmutual;\n(k) A list o f individuals who are or have been selected to become directors or\nofficers of the former mutual and of any affiliate, or the individuals who\nperform or will perform duties customarily performed by a director or officer,\nincluding the following information:\n1. The individual's principal occupation;\n2. All offices and positions the individual has held in the preceding five (5)\nyears;\n3. Any criminal convictions of the individual;\n4. Information concerning any personal bankruptcy of the individual or the\nindividual's spouse during the previous seven (7) years;\n5. Information concerning the supervision, rehabilitation, or liquidation of\nany insurer or the bankruptcy of any corporation or other entity of which\nthe individual was an officer or director;\n6. Information concerning any state or federal securities law allegations\nagainst the individual that resulted in a determination that the individual\nviolated the state or federal securitie s law, a plea of nolo contendere, or\na consent decree;\n7. Information concerning the revocation of any state or federal license\nissued to the individual; and\n8. Information as to whether the individual was refused a fidelity or other\nbond during the previous ten (10) years.\n(l) A fairness opinion addressed to the board of directors of the converting\nmutual from a qualified independent financial advisor, that the provision of\nstock, cash, policy benefits, or other forms of consideration upon\nextinguishing the converting mutual's membership interests under the plan of\nconversion, is fair and equitable to the eligible members, as a group, from a\nfinancial point of view;\n(m) An actuarial opinion and supporting memorandum;\n(n) A description of the plans of the fo rmer mutual or its affiliates to assure that\nan active trading market for any stock or other securities distributed to eligible\nmembers will develop within a reasonable amount of time after the effective\ndate of the plan of conversion and that eligible mem bers who receive stock or\nother securities will be able to sell their stock or other securities, subject to\nany delayed distribution or transfer restrictions, at reasonable cost and effort.\nThese plans may consist of:\n1. Appointing a registrar and transfer agent for the stock or other securities;\n2. Making filings, applications, or registrations for the stock or other\nsecurities with the Federal Securities and Exchange Commission and\nwith appropriate state securities regulators;\n3. Listing the stock or othe r securities on a national or other securities\nexchange;\n4. Facilitating coverage of the stock or other securities by research analysts\nand securing the commitment of at least one (1) market maker to make a\nmarket in the stock or other securities;\n5. Conducting an underwritten public offering of the same class of stock or\nother securities, promptly following the effective date of the plan of\nconversion, in order to facilitate the development of a public market;\nand\n6. Making available a procedure for eligib le members holding small\nnumbers or amounts of stock or other securities to sell their stock or\nother securities to the former mutual or an affiliate at market value\nwithout the payment of brokerage commissions or similar fees, or to sell\ntheir stock or ot her securities in the market through a broker with\ndiscounted brokerage commissions or fees;\n(o) Any additional information, documents, or materials that the converting\nmutual deems necessary or reasonable; and\n(p) Any other additional information, documen ts, or materials that the\ncommissioner may request in writing.\n(3) (a) The actuarial opinion shall address whether:\n1. The methodology or formulas used to determine the total aggregate\nconsideration to be distributed to eligible members is reasonable and\nappropriate;\n2. The methodology or formulas used to allocate consideration among the\neligible members is reasonable and appropriate;\n3. The financial condition of the former mutual will not be adversely\ndiminished; and\n4. If a closed block is used for the p reservation of the reasonable dividend\nexpectations of eligible members and other policyholders with policies\nthat provide for the distribution of the policy dividends, the plan of\noperation, and the sufficiency of the assets allocated to the closed block,\nis reasonable.\n(b) The actuarial opinion shall be provided by a qualified and independent actuary\nwho is a member of the American Academy of Actuaries. The opinion shall\nbe given in accordance with professional standards and practices generally\naccepted b y the actuarial profession and those other factors as the actuary\nbelieves are reasonable and appropriate in the exercise of professional\njudgment at the time the opinion is given.\n(c) The opinion shall be supported by a memorandum of the actuary, describi ng\nthe calculations made and the assumptions used in the calculations.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=29582","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:51Z","sha256":"68ff4e755a9f715ac667119e2b52bb6efb29018f3c1e5d377fd89daba3fa7f93","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.24-603","next":"us-ky/krs-304.24-607"},"notice":"GroundRules: Original legal text. Not legal advice."}