§ 38a-156w — Effect of division.

Connecticut § 38a-156w

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

Text

(a) When a division becomes effective pursuant to subsection (d) of section 38a-156v: (1) If the dividing insurer has survived the division: (A) It continues to exist; (B) its public organic document, if any, shall be amended as provided in the certificate of division; and (C) its private organic rules, if any, shall be amended as provided in the plan of division; (2) if the dividing insurer has not survived the division, its separate existence ceases to exist; (3) each new insurer: (A) Comes into existence; (B) shall hold any capital, surplus and other property allocated to it as a successor to the dividing insurer, and not by transfer, whether directly or indirectly; (C) its public organic document, if any, and private organic rules, if any, shall be effective; and (D) if it is a limited liability partnership, its certificate of limited liability partnership shall be effective; (4) capital, surplus and other property of the dividing insurer: (A) That is allocated by the plan of division either: (i) Vests in the new insurers as provided in the plan of division; or (ii) remains vested in the dividing insurer; (B) that is not allocated by the plan of division: (i) Remains vested in the dividing insurer, if the dividing insurer survives the division; or (ii) is allocated to and vests equally in the resulting insurers as tenants in common, if the dividing insurer does not survive the division; or (C) vests as provided in this subsection without transfer, reversion or impairment; (5) a resulting insurer to which a cause of action is allocated as provided in subdivision (4) of this subsection may be substituted or added in any pending action or proceeding to which the dividing insurer is a party when the division becomes effective; (6) the policies and other liabilities of the dividing insurer are allocated between or among the resulting insurers as provided in section 38a-156x and the resulting insurers to which policies or other liabilities are allocated are liable for those policies and other liabilities as successors to the dividing insurer, and not by transfer, whether directly or indirectly; and (7) the interests in the dividing insurer that are to be converted or canceled in the division are converted or canceled, and the interest holders of those interests are entitled only to the rights provided to them under the plan of division and any appraisal rights they may have pursuant to section 38a-156y. (b) Except as provided in the organic law or organic rules of the dividing insurer, the division does not give rise to any rights that an interest holder, governor or third party would have upon a dissolution, liquidation or winding up of the dividing insurer. (c) The allocation to a new insurer of capital, surplus or other property that is collateral covered by an effective financing statement shall not be effective until a new financing statement naming the new insurer as a debtor is effective under sections 42a-9-101 to 42a-9-809 , inclusive. (d) Unless otherwise provided in the plan of division, the interests in and any securities of each new insurer shall be distributed to: (1) The dividing insurer, if it survives the division; or (2) the holders of the common interest or other residuary interest of the dividing insurer that do not assert appraisal rights, pro rata, if the dividing insurer does not survive the division.

Legislative History

(P.A. 17-2, S. 6.)