Michigan Laws 500.6011 – Reorganization plan; filing of documents; hearing; approval or disapproval of plan by commissioner; conditions for approval; retention and assistance of qualified expert
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(1) After adoption by the mutual company‘s board of directors and prior to the members’ approval of the plan of reorganization, a mutual company shall file all of the following documents with the commissioner for review and approval:
(a) The plan of reorganization.
Terms Used In Michigan Laws 500.6011
- Commissioner: means the director. See Michigan Laws 500.102
- Converted company: means a Michigan domiciled stock insurance company that results from the reorganization of a mutual company under this chapter. See Michigan Laws 500.6001
- 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
- Intermediate holding company: means a business corporation subsidiary of a mutual holding company domiciled in this state, any other state, or the District of Columbia that is authorized to issue 1 or more classes of capital stock, the corporate purposes of which include holding directly or indirectly the voting stock of a converted company. See Michigan Laws 500.6001
- Mutual company: means a domestic mutual insurance company organized under chapter 50, 54, or 58. See Michigan Laws 500.6001
- plan: means a plan adopted pursuant to this chapter by the board of directors of a mutual company for the reorganization of the mutual company simultaneously into both a mutual holding company and a converted company existing as a direct or indirect stock subsidiary of the mutual holding company. See Michigan Laws 500.6001
- Policyholder: means the holder of a policy other than a reinsurance contract. See Michigan Laws 500.6001
(b) The form of notice required by section 6013 for eligible members to vote on the plan.
(c) Any proxies to be solicited from eligible members and any other soliciting materials.
(d) The proposed articles of incorporation and bylaws of the mutual holding company, each intermediate holding company, if any, and the revised articles of incorporation and bylaws of the converted company.
(2) The commissioner may hold a hearing to review a plan of reorganization. The commissioner shall approve the plan upon finding both of the following:
(a) The plan complies with this chapter.
(b) The plan is fair and equitable to the interests of the policyholders.
(3) The commissioner shall approve or disapprove a plan by not later than 90 days after the filing of the documents under subsection (1).
(4) The commissioner may conditionally approve a plan if he or she determines that conditions are reasonably necessary to protect policyholder interests. The conditions may include, but are not limited to, the following:
(a) Prior approval of any concurrent or subsequent acquisition, merger, or formation of affiliate entities of the mutual holding company.
(b) Prior approval of the capital structure of or any changes to the capital structure of any intermediate holding company.
(c) Prior approval of any initial public offering or of any other issuance of equity or debt securities of an intermediate holding company or of the converted company in a private sale or public offering.
(d) Prior approval of the expansion of the mutual holding insurance company system into lines of business, industries, or operations for which it was not licensed or authorized at the time of the reorganization.
(e) Limitations on dividends and distributions if the effect would be to reduce capital and surplus of the converted company, in addition to any limitations that may otherwise be authorized by law.
(f) Limitations on the pledge or encumbrance of the stock of the converted company.
(5) The commissioner may retain, at the mutual company’s expense, any qualified expert not otherwise a part of the commissioner’s staff to assist in reviewing the plan of reorganization.