(a)

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Terms Used In Tennessee Code 56-18-112

  • Bequest: Property gifted by will.
  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-18-108
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Mutual life insurance corporation: means a corporation organized and doing business under the laws of this state, upon the principle of a mutual participation in the profits, with its principal office or place of business located within the state, without capital stock or shares of capital stock, engaged in the writing of life insurance or life, health and accident insurance, either separately or in combined policies. See Tennessee Code 56-18-108
  • Trustee: A person or institution holding and administering property in trust.
(1) If a stock life insurance corporation determines to become a mutual life insurance corporation, it may, in carrying out any plan to that end under this chapter, acquire any shares of its own stock by gift, bequest or purchase.
(2) Until all of the shares are acquired, any shares so acquired shall be assigned and transferred on the books of the corporation to five (5) trustees for the corporation, and shall be held by them in trust and be voted as a unit by them at all corporate meetings at which stockholders have a right to vote, until all of the capital stock of the corporation is acquired, when the entire capital stock shall be retired and cancelled and, thereupon, the corporation shall be made and become a mutual life insurance corporation without capital stock.
(3) Before undertaking any of the duties of appointment, each trustee shall file with the company a verified acceptance of the appointment and a declaration that the trustee will faithfully discharge all duties as trustee, and shall give bond as required by the mutualization plan.
(4) All dividends and other sums received by the trustees on the shares of stock so acquired by them, shall, after paying the necessary expenses of executing the trust, be added to and become a part of the surplus earned by the company.
(b) The five (5) trustees shall be named in the plan of mutualization originally adopted by the directors of the corporation, and shall be approved by the commissioner. The plan of mutualization shall also provide for the method of filling vacancies occurring among the trustees.
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