(a) A stock insurer other than a title insurer may become a mutual insurer under the plan and procedure that may be approved by the director after a hearing.
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Terms Used In Alaska Statutes 21.69.570

  • 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.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • person: includes a corporation, company, partnership, firm, association, organization, business trust, or society, as well as a natural person. See Alaska Statutes 01.10.060
  • state: means the State of Alaska unless applied to the different parts of the United States and in the latter case it includes the District of Columbia and the territories. See Alaska Statutes 01.10.060
(b) The director may not approve a plan, procedure, or mutualization unless

(1) it is equitable to stockholders and policyholders;
(2) it is subject to approval by the holders of not less than three-fourths of the insurer’s outstanding capital stock having voting rights and by not less than two-thirds of the insurer’s policyholders who vote on the plan in person, by proxy, or by mail under the notice and procedure which may be approved by the director;
(3) if a life insurer, the right to vote on it is limited to holders of policies other than term or group policies, and whose policies have been in force for more than one year;
(4) mutualization will result in retirement of shares of the insurer’s capital stock at a price not in excess of the fair market value as determined by competent disinterested appraisers;
(5) the plan provides for the purchase of the shares of a nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by the general corporation law of the state, as to rights of nonconsenting stockholders, with respect to consolidation or merger of private corporations;
(6) the plan provides for definite conditions to be fulfilled by a designated early date upon which the mutualization will be considered effective;
(7) the mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the state in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificates of authority in those states.
(c) This section does not apply to mutualization ordered by a court to rehabilitate or reorganize an insurer under Alaska Stat. Chapter 21.78.
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