Nebraska Statutes 44-6125. Domestic mutual insurer; foreign insurer; transfer domicile; reorganization authorized; effect; holding company; treatment
(1) A domestic mutual insurer, upon approval of the director, may reorganize (a) by forming a mutual insurance holding company, (b) by merging its policyholders’ membership interests into the mutual insurance holding company, and (c) by continuing the mutual insurer’s corporate existence as a stock insurer subsidiary of the mutual insurance holding company.
Terms Used In Nebraska Statutes 44-6125
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Company: shall include any corporation, partnership, limited liability company, joint-stock company, joint venture, or association. See Nebraska Statutes 49-801
- Company shall: include any corporation, partnership, limited liability company, joint-stock company, joint venture, or association. See Nebraska Statutes 49-801
- 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.
- Director: shall mean the Director of Insurance. See Nebraska Statutes 44-103
- Domestic: when applied to corporations shall mean all those created by authority of this state. See Nebraska Statutes 49-801
- 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
- Foreign: when applied to corporations shall include all those created by authority other than that of this state. See Nebraska Statutes 49-801
- Insurer: shall include all companies, exchanges, societies, or associations whether organized on the stock, mutual, assessment, or fraternal plan of insurance and reciprocal insurance exchanges. See Nebraska Statutes 44-103
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- State: when applied to different states of the United States shall be construed to extend to and include the District of Columbia and the several territories organized by Congress. See Nebraska Statutes 49-801
(2) A domestic mutual insurer, upon the approval of the director, may reorganize by merging its policyholders’ membership interests into an existing mutual insurance holding company formed under subsection (1) of this section and by continuing the mutual insurer’s corporate existence as a stock insurer subsidiary of the mutual insurance holding company.
(3) All of the initial shares of the capital stock of a reorganized stock insurer which has reorganized as described in subsection (1) or (2) of this section shall be issued to the mutual insurance holding company or to one or more intermediate stock holding companies.
(4) Policyholders of a domestic mutual insurer which has reorganized as described in subsection (1) or (2) of this section shall be members of the mutual insurance holding company and their voting rights shall be determined in accordance with the articles of incorporation and bylaws of the mutual insurance holding company. The mutual insurance holding company shall provide its members with the same membership rights as were provided to policyholders of the mutual insurer immediately prior to reorganization. The reorganization shall not reduce, limit, or affect the number or identity of the policyholders who may become members of the mutual insurance holding company or secure for individuals comprising management any unfair advantage through or connected with the reorganization.
(5) If an insurer which is organized under the laws of another state transfers its domicile to this state in accordance with section 44-161 and is a direct or indirect subsidiary of a mutual insurance holding company organized under the laws of such other state, then, in connection with the transfer of the domicile of such insurer, upon approval of the director of a plan of merger and transfer, the foreign mutual insurance holding company may form a mutual insurance holding company under this section, and the foreign mutual insurance holding company may merge into such domestic mutual insurance holding company simultaneously with the transfer of domicile of the insurer to this state. Until the merger takes effect, the foreign mutual insurance holding company shall be the sole member of the domestic mutual insurance holding company. When the merger takes effect, the separate existence of the foreign mutual insurance holding company shall cease, the domestic mutual insurance holding company shall survive and have all the assets and liabilities formerly held by the foreign mutual insurance holding company, all of the members of the foreign mutual insurance holding company shall become members of the domestic mutual insurance holding company, policyholders of the insurer shall be members of the domestic mutual insurance holding company, and their voting rights shall be determined in accordance with the articles of incorporation and bylaws of the domestic mutual insurance holding company. After the transfer and merger take effect, for purposes of the Mutual Insurance Holding Company Act, the insurer shall be deemed to be a reorganized stock insurer. If the foreign mutual insurance holding company owns a majority of the voting stock of a stock holding company organized under the laws of another state that in turn owns all of the voting stock of the insurer, then the plan of merger and transfer may provide that the stock holding company shall continue as a corporation organized under the laws of the other state.
(6)(a) A mutual insurance holding company or any intermediate stock holding company formed under the Mutual Insurance Holding Company Act shall not be authorized to transact the business of insurance.
(b) A mutual insurance holding company formed under the act shall not issue stock.
(c) The director shall have jurisdiction over a mutual insurance holding company and any intermediate stock holding company to ensure that policyholder interests are protected.
(d) A mutual insurance holding company and any intermediate stock holding company shall be treated as domestic insurers subject to the Insurers Demutualization Act, the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act, Chapter 44, article 2, and section 44-301, except that a foreign intermediate stock holding company shall not be subject to Chapter 44, article 2, and section 44-301.
(e) Except with the approval of the director, the aggregate pledges and encumbrances of a mutual insurance holding company’s assets shall not affect more than forty-nine percent of the mutual insurance holding company’s stock in an intermediate stock holding company or a reorganized stock insurer.
(f) At least fifty percent of the net worth of a mutual insurance holding company, as determined by generally accepted accounting practices, shall be invested in insurers or any other subsidiaries or investments authorized by the Insurance Holding Company System Act.
(g) If any proceeding under the Nebraska Insurers Supervision, Rehabilitation, and Liquidation Act is brought against a reorganized stock insurer, the mutual insurance holding company and intermediate stock holding company shall become parties to the proceedings. All of the assets of the mutual insurance holding company are deemed assets of the estate of the reorganized stock insurer to the extent necessary to satisfy policy claims against the reorganized stock insurer.
(h) No distribution to members of a mutual insurance holding company may occur without prior written approval of the director and only upon the director’s satisfaction that such distribution is fair and equitable to policyholders as members of the mutual insurance holding company.
(i) No solicitation for the sale of the stock of an intermediate stock holding company or a reorganized stock insurer may be made without the director’s prior written approval.
(j) A mutual insurance holding company or an intermediate stock holding company shall not voluntarily dissolve without the approval of the director.