Action by Commissioner on application.
1. The Commissioner shall issue an order making an initial determination of approval or disapproval of the application not later than 30 days after the public hearing.
2. The Commissioner shall not approve the application unless he finds that the:
(a) Plan of conversion is fair and equitable to the policyholders;
(b) Plan of conversion does not deprive the policyholders of their property rights or due process of law;
(c) New stock insurer meets the minimum requirements for a certificate of authority to transact the business of insurance in this state; and
(d) Continued operation of the new stock insurer is not hazardous to future policyholders and the public.
3. For the purposes of this section, the Commissioner may consider any relevant factor, including, without limitation:
(a) The capital requirements of the new stock insurer;
(b) Whether a sufficient portion of the surplus of the converting mutual was contributed by persons or entities whose policies or contracts were not in force on the date on which the plan of conversion was initially approved by the board of directors of the converting mutual to require the reduction of the consideration to policyholders to an amount equal to less than the surplus;
(c) Whether the plan of conversion includes preemptive rights for policyholders to purchase securities offered in the initial sale of securities by the new stock insurer;
(d) Whether the plan of conversion includes establishment of a preference account from which the payment of any shareholder dividends, including a regular, special or liquidation dividend, would be prohibited for such a reasonable period as the Commissioner may require;
(e) The suitability of the trustees of any trust created to effect the conversion; and
(f) Whether the utilization of a trust, if included in the plan of conversion, has a material adverse effect on policyholders, other than delaying the receipt of shares of capital stock.
4. If the Commissioner makes a determination to disapprove the application, the Commissioner shall issue a final order setting forth specific findings for the disapproval.
Last modified: February 27, 2006