§ 1560.18. — 1560.18. (Added by Stats. 1998, Ch. 421, Sec. 2.)

California § 1560.18.

• Jurisdiction: California
• Code INS: Insurance Code - INS
• Div. 1.: DIVISION 1. GENERAL RULES GOVERNING INSURANCE
• Part 2.: PART 2. THE BUSINESS OF INSURANCE
• Ch. 3.: CHAPTER 3. Reciprocal Insurers
• Art. 17.: ARTICLE 17. Conversion of Certain Reciprocal Insurers to Incorporated Stock Insurers

Text

(a)
The articles of incorporation of a converted insurer that have been adopted pursuant to a plan of conversion and filed with the Secretary of State in accordance with Section 1560.10 may be further amended after the effective date pursuant to applicable law. The plan of conversion may be amended in other respects after the effective date of the plan as specified in this section. An amendment of the plan of conversion shall take effect upon filing with the Secretary of State after compliance with the following:
(1)
Approval by a resolution of at least two-thirds of the board of directors of the converted insurer. The resolution shall specify the reasons for and the purposes of the proposed amendment.
(2)
Submission to the commissioner for consent in writing, subject to the provisions of Section 1560.05.
(3)
Approval by at least two-thirds of those members of the corporation who were subscribers of the converting insurer and entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 1560.03 and who vote at a meeting called for that purpose.
(4)
Filed in the office of the commissioner after having been consented to and approved as contemplated by paragraphs (2) and (3).
(b)
If an amendment proposed under subdivision (a) would adversely affect the rights of one or more classes of subscribers, but not all of those subscribers, then only the subscribers of each class whose rights would be adversely affected by the proposed amendment are entitled to vote on the proposed plan amendment.
(c)
A subscriber meeting prescribed by paragraph (3) of subdivision (a) shall be called by the board of directors, the chairperson of the board, or the president of the converted insurer. Notice of the meeting shall be given to subscribers entitled to vote at the meeting by mail at least 45 days prior to the date set for the meeting. Voting shall be by ballot, in person, or by proxy. A quorum consists of 10 percent of the subscribers of the converted insurer entitled to vote at the meeting.
(d)
At any time before the plan amendment becomes effective, the converted insurer may, by resolution of at least two-thirds of the board of directors, amend the plan amendment or withdraw its plan amendment. For an amendment to a plan amendment, all references in this section to the plan amendment shall be deemed to refer to the plan amendment as amended. Any amendment of the plan amendment shall require the written consent of the commissioner. No amendment shall be deemed to change the date of adoption of the plan amendment. No amendment made after approval by the subscribers as provided in paragraph (3) of subdivision (a) may change the plan amendment in a manner that the commissioner determines is materially disadvantageous to any of the affected subscribers unless the plan amendment as amended is submitted for reconsideration under the procedures prescribed for the original plan amendment, subscriber approval.

Legislative History

Added by Stats. 1998, Ch. 421, Sec. 2. Effective January 1, 1999.