(1) A contract of consolidation involving a domestic insurance company shall be approved by a majority vote of the board of directors or other governing body of each of the respective parties thereto as well as by a majority vote of the members present in person or by proxy at an annual meeting or at a special meeting called for that purpose. Such contract of consolidation shall be approved by the director prior to submission to the members for approval. After approval by the members, the officers of the respective parties thereto may enter into and consummate such contract of consolidation and do and perform all acts necessary to the final and complete consummation thereof. Such contract of consolidation shall designate the corporation which is to continue or survive and which shall thereafter retain a certificate of authority issued by the department. The surviving company may assume, in whole or in part, the name of the retiring company. Such contract of consolidation upon becoming effective shall have the effect of transferring the assets, rights, franchises, and interests of the companies so consolidated to the continuing or surviving company, and simultaneously therewith, such surviving or continuing company shall be deemed to have assumed all the liabilities of the consolidated companies. A contract of consolidation need not require a disposition or other distribution of the surplus assets of either party thereto to their respective policyholders. No action or proceeding pending at the time of such consolidation to which either of the consolidating parties may be a party shall be abated or discontinued by reason of such consolidation, but the same may be prosecuted to final judgment in the same manner as if the consolidation had not taken place or the continuing or surviving company may be substituted in place of any such company so consolidated, as the case may be, by order of the court in which the action or proceeding is pending.

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(2) Any assessment association which has accumulated and maintains the same reserve for liabilities that is required of a mutual company transacting the same kind or kinds of business and which has a surplus or contingency funds equal to or in excess of that required of a mutual company transacting the same kind or kinds of business may, in any consolidation agreement in which it is to continue or survive as an assessment association, agree to limit its assessments to the premium stated in the policies issued by the retiring company.