15. a. A domestic fraternal benefit society which is organized pursuant to the provisions of this act may convert to a domestic mutual insurer by complying with the provisions of this section.

b. A written plan of conversion setting forth in full the terms and conditions of conversion shall be prepared by the assembly or board of directors of the society. The plan shall include:

(1) the purpose of the conversion;

(2) the effect of conversion on existing benefit contracts issued by the society;

(3) a business plan;

(4) a provision that each holder of a benefit contract of the society shall receive any rights with respect to the domestic mutual insurer as may be prescribed by the commissioner, provided that those rights shall not exceed the rights provided to policyholders of other domestic mutual insurers authorized to transact the kind or kinds of business specified in N.J.S.17B:17-3, N.J.S. 17B:17-4 and N.J.S.17B:17-5; and

(5) a provision that each member of the society shall be notified of the conversion, which notification process shall be approved by the commissioner.

c. The written plan of conversion provided for in subsection b. of this section shall be approved by an affirmative vote of 2/3 of all members of the supreme governing body at a regular or special meeting and then filed with the commissioner.

d. The commissioner shall approve or disapprove the plan. The commissioner shall approve the plan unless he finds the plan:

(1) is contrary to law;

(2) would be detrimental to the safety or soundness of the proposed domestic mutual insurer;

(3) prejudices the interests of the holders of benefit contracts of the society or treats them inequitably.

The commissioner shall set forth his decision in writing and shall state the reasons therefor. A disapproval shall be subject to judicial review.

e. Upon approval of the plan by the commissioner and the issuance of a certificate of authority to transact the business of insurance as a domestic mutual insurer, the society shall be deemed to be a domestic mutual insurer subject to the provisions of Title 17B of the New Jersey Statutes, including surplus requirements, and all other applicable law.

f. On and after the date of issuance of the certificate of authority, the society shall be a domestic mutual insurer, vested with all the powers and privileges of a domestic mutual insurer, and subject to all provisions of law applicable to those insurers, including surplus requirements, in the same manner and with the same effect as if the converted society had originally been incorporated as a domestic mutual insurer on the date of issuance of the certificate of authority, and the members of the society shall become and be members of the domestic mutual insurer.

g. The conversion of a society into a domestic mutual insurer shall not affect the right of any creditor or member of the society, but all rights of all persons against the society before its conversion shall continue unaffected and shall be enforced against the domestic mutual insurer in the same manner they could have been enforced against the society had its conversion not taken place; except that all rights of assessment or reduction in benefits in lieu of assessment, prescribed in the certificate of incorporation or bylaws of the society, or provided in any certificate, policy or contract of the society, shall be canceled. As used in this section, “assessment” means the right to require the payment of a sum in addition to the weekly or other periodical dues, contributions, premiums and fees required under the terms of any certificate, policy or contract; and “domestic mutual insurer” shall only include a domestic mutual insurer authorized to transact the kind or kinds of business specified in N.J.S.17B:17-3, N.J.S. 17B:17-4 and N.J.S. 17B:17-5

L.1997,c.322,s.15.