1. An association captive insurance company or industrial insured captive insurance company formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan therefor and the provisions of this section.

2. Any plan for such conversion or merger shall provide a fair and equitable plan for purchasing, retiring, or otherwise extinguishing the interests of the stockholders and policyholders of a stock insurer, and the members and policyholders of a mutual insurer, including a fair and equitable provision for the rights and remedies of dissenting stockholders, members, or policyholders.

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3. In the case of a conversion authorized under subsection 1 of this section:

(1) Such conversion shall be accomplished under such reasonable plan and procedure as may be approved by the director; provided, however, that the director shall not approve any such plan of conversion unless such plan:

(a) Satisfies the provisions of subsection 2 of this section;

(b) Provides for a hearing, of which notice is given or to be given to the captive insurance company, its directors, officers, and policyholders, and in the case of a stock insurer, its stockholders, and in the case of a mutual insurer, its members, all of which persons shall be entitled to attend and appear at such hearing; provided, however, that if notice of a hearing is given and no director, officer, policyholder, member, or stockholder requests a hearing, the director may cancel such hearing;

(c) Provides a fair and equitable plan for the conversion of stockholder, member, or policyholder interests into subscriber interests in the resulting reciprocal insurer substantially proportionate to the corresponding interests in the stock or mutual insurer; provided, however, that this requirement shall not preclude the resulting reciprocal insurer from applying underwriting criteria that could affect ongoing ownership interests; and

(d) Is approved:

a. In the case of a stock insurer, by a majority of the shares entitled to vote represented in person or by proxy at a duly called regular or special meeting at which a quorum is present; and

b. In the case of a mutual insurer, by a majority of the voting interests of policyholders represented in person or by proxy at a duly called regular or special meeting thereof at which a quorum is present;

(2) The director shall approve such plan of conversion if the director finds that the conversion will promote the general good of the state in conformity with those standards set forth in subdivision (1) of subsection 4 of section 379.1310;

(3) If the director approves the plan, the director shall amend the converting insurer’s certificate of authority to reflect conversion to a reciprocal insurer and issue such amended certificate of authority to the company’s attorney-in-fact;

(4) Upon the issuance of an amended certificate of authority of a reciprocal insurer by the director, the conversion shall be effective; and

(5) Upon the effectiveness of such conversion the corporate existence of the converting insurer shall cease and the resulting reciprocal insurer shall notify the secretary of state of such conversion.

4. A merger authorized under subsection 1 of this section shall be accomplished substantially in accordance with such procedures and plan of merger adopted by the board of directors of the captive insurance company and as authorized by the director; except that, solely for purposes of such merger:

(1) The plan of merger shall satisfy the provisions of subsection 2 of this section;

(2) The subscribers’ advisory committee of a reciprocal insurer shall be equivalent to the board of directors of a stock or mutual insurance company;

(3) The subscribers of a reciprocal insurer shall be the equivalent of the policyholders of a mutual insurance company;

(4) If a subscribers’ advisory committee does not have a president or secretary, the officers of such committee having substantially equivalent duties shall be deemed the president or secretary of such committee;

(5) The director shall approve the articles of merger if the director finds that the merger will promote the general good of the state in conformity with those standards set forth in subdivision (1) of subsection 4 of section 379.1310. If the director approves the articles of merger, the director shall endorse the director’s approval thereon and the surviving insurer shall present the same to the secretary of state at the secretary of state’s office;

(6) Notwithstanding section 379.1306, the director may permit the formation, without surplus, of a captive insurance company organized as a reciprocal insurer into which an existing captive insurance company may be merged for the purpose of facilitating a transaction under this section; provided, however, that there shall be no more than one authorized insurance company surviving such merger; and

(7) An alien insurer may be a party to a merger authorized under subsection 1 of this section; provided that such alien insurer shall be treated as a foreign insurer and such other jurisdictions shall be the equivalent of a state.

5. To the extent such effects are not inconsistent with the provisions of sections 379.1300 to 379.1350, a conversion or merger under this section shall have all of the following effects:

(1) The several insurers which are parties to the agreement of merger or consolidation shall be a single insurer which such single insurer shall have all of the rights, privileges, immunities, and powers and shall be subject to all of the duties and liabilities of an insurer organized under sections 379.1300 to 379.1350;

(2) Such single insurer shall thereupon and thereafter possess all the rights, privileges, immunities, powers, and franchises of a public as well as of a private nature of each of the insurers so merged or consolidated; and all property, real, personal, and mixed, and all debts due on whatever account, including subscriptions to shares of capital stock, and all other choices in action and all and every other interest of or belonging to or due to each of the insurers so merged or consolidated shall be taken and deemed to be transferred to and vested in such single insurer without further act or deed; and the title to any real estate, or any interest therein, under the laws of this state vested in any of such insurers shall not revert or be in any way impaired by reason of such merger or consolidation; and

(3) Such single insurer shall thenceforth be responsible and liable for all the liabilities and obligations of each of the insurers so merged or consolidated in the same manner and to the same extent as if such single insurer had itself incurred the same or contracted therefor; and any claim existing or action or proceeding pending by or against any of such insurers may be prosecuted to judgment as if such merger or consolidation had not taken place. Neither the rights of creditors nor any liens upon the property of any such insurers shall be impaired by such merger or consolidation, but such liens shall be limited to the property upon which they were liens immediately prior to the time of such merger or consolidation, unless otherwise provided in the agreement of merger or consolidation.