§ 38a-156b — Mutual holding company requirements.

Connecticut § 38a-156b

• Jurisdiction: Connecticut
• Title 38a: Insurance
• Ch. 698: Insurers

Text

(a) No mutual holding company shall engage in the business of insurance. (b) A mutual holding company shall comply with all applicable provisions of law relating to the powers, duties and liabilities of corporations. (c) A mutual holding company's articles of incorporation shall contain the following provisions that state: (1) The company is a mutual holding company organized under this section and section 38a-156a ; (2) One purpose of the company is to own, directly or through one or more intermediate stock holding companies, at least fifty-one per cent of the voting stock of one or more reorganized insurers; (3) The company is not authorized to issue voting stock; (4) The company's members have the rights specified in subdivisions (4) and (5) of subsection (g) of section 38a-156a and in the company's articles of incorporation and bylaws; and (5) The company's assets and liabilities are subject to inclusion, to the extent authorized under sections 38a-156 to 38a-156m , inclusive, in the estate of a reorganized insurer of which the company owns voting stock in any proceeding brought against the reorganized insurer under chapter 704c. (d) A mutual holding company shall file with the commissioner, not later than thirty days after the adoption of any amendment to its bylaws, a copy of such amendment, certified by such company's secretary under such company's corporate seal. (e) A mutual holding company may hold, directly or indirectly, multiple subsidiaries including multiple intermediate stock holding companies. An intermediate stock holding company may hold, directly or indirectly, multiple subsidiaries including multiple reorganized insurers. A mutual holding company and its subsidiaries and affiliates shall be deemed members of an insurance holding company system, as defined in section 38a-129 , and the provisions of sections 38a-129 to 38a-140 , inclusive, shall apply to the extent such provisions do not conflict with the provisions in sections 38a-156 to 38a-156m , inclusive. (f) No mutual holding company shall make any payment of income, dividends contingent upon an apportionment of profits or any other distribution of profits except to the extent provided in such company's articles of incorporation or as otherwise directed or approved by the commissioner. (g) Membership interests in a mutual holding company shall not be considered a security, as defined in section 36b-3 . A description of the membership interests and related factual disclosures shall not be deemed inducements to buy insurance in violation of section 38a-816 or 38a-825 , and a recipient of such description and related factual disclosures shall not be deemed to be in violation of the provisions of section 38a-825 . (h) (1) The mutual holding company shall hold an annual meeting and shall mail a notice of the meeting to each member at such member's last known mailing address as shown in the company's records. The notice shall be mailed at least sixty days prior to the date of the meeting. (2) Members of a mutual holding company may vote by proxies dated and executed within ninety days of, and returned to and recorded on the books of the company not later than seven days before, the meeting at which such proxies are to be used. Unless otherwise provided in the articles of reorganization or bylaws of the reorganizing insurer, each member of a mutual holding company shall be entitled to one vote. (3) Unless a greater percentage for approval is required by law or specified in a mutual holding company's articles of incorporation, any required approval by the members shall be by a majority vote of the members voting. (i) No mutual holding company shall transfer its domicile to another state for a period of five years after the effective date without the approval of the commissioner. (j) (1) A mutual holding company may specify in its articles of incorporation or its bylaws that its directors may be divided into two or more classes, which terms of office shall expire at different times, provided no term of office shall be longer than six years. If a mutual holding company does not specify such provision in its articles of incorporation or its bylaws, the term of office for each director of such company shall be one year. (2) Upon the expiration of a director's term of office, such director shall continue to serve until such director's successor has been elected and qualified. Any vacancy on the board that occurs prior to the expiration of a director's term of office shall be filled by a majority vote of the remaining directors, notwithstanding any quorum requirements. Any director so elected shall hold office until the next annual meeting.

Legislative History

(P.A. 14-123, S. 3.) History: P.A. 14-123 effective June 6, 2014.