(a) No plan of conversion shall become effective unless the mutual company seeking to convert to a stock company shall have adopted, by the affirmative vote of not less than2/3of its governing body and otherwise in accordance with law, a plan of conversion consistent with the requirements of §§ 4975, 4976 and 4977, or of § 4978, of this title. At any time before approval of a plan by the Commissioner, the mutual company, by the affirmative vote of not less than a majority of its governing body, may amend or withdraw the plan.
(b) With respect to a domestic mutual company that exists as of October 17, 2010, no plan of conversion may be adopted pursuant to subsection (a) of this section unless the policyholders of the domestic mutual company shall have previously elected to subject the domestic mutual company to the provisions of this chapter at a separate meeting convened for such purpose. In connection with such meeting, the domestic mutual company shall provide its policyholders with substantially the same information as is required by the provisions of § 4974(b) of this title.
(c) Before a mutual company’s eligible members may vote on approval of a plan, a mutual company whose governing body has adopted a plan shall file all of the following documents with the Commissioner within 90 days after adoption of the plan together with the application fee specified herein:
(1) The plan of conversion, including the independent evaluation of pro forma market value required by § 4975(d) of this title.
(2) The form of notice required by subsection (f) of this section.
(3) The form of proxy to be solicited from eligible members pursuant to subsection (g) of this section.
(4) The form of notice required by § 4980 of this title to persons whose policies are issued after adoption of the plan but before its effective date.
(5) The proposed certificate of incorporation and bylaws of the converted stock company.
(6) The acquisition of control statement, as required by § 5003 of this title.
(7) The application shall be accompanied by an application fee equal to the greater of:
a. $100,000; or
b. An amount equal to1/10of 1% of the estimated pro forma market value of the converted stock company as determined in accordance with § 4975(d) of this title.
If such value is expressed as a range of values, the application fee shall be based upon the midpoint of the range. For good cause shown, the Commissioner may waive the application fee in whole or in part, or permit a portion of the application fee to be deferred until completion of the conversion.
(8) Such other information as the Commissioner may request. Upon filing of the foregoing documents with the Commissioner, the mutual company shall send to eligible members a notice advising eligible members of the adoption and filing of the plan, their ability to provide the Commissioner and the mutual company with comments on the plan within 30 days of the date of such notice, and procedure therefore.
(d) The Commissioner shall immediately give written notice to the mutual company of any decision and, in the event of disapproval, a statement in detail of the reasons for the decision. The Commissioner shall approve the plan if the Commissioner finds each of the following:
(1) The plan complies with this chapter.
(2) The plan will not prejudice the interests of the members.
(3) The plan’s method of allocating subscription rights is fair and equitable.
(e) The Commissioner may retain, at the mutual company’s expense, any qualified expert not otherwise a part of the Commissioner’s staff, including counsel and financial advisors, to assist in reviewing the plan and the independent evaluation of the pro forma market value required under § 4975(d) of this title.
(f) The Commissioner may order a hearing on whether the terms of the plan comply with this chapter after giving written notice by mail or publication to the mutual company and other interested persons, all of whom have the right to appear at the hearing.
(g) All voting members shall be sent notice of the members’ meeting to vote on the plan. The notice shall briefly but fairly describe the proposed conversion plan, shall inform the voting member of the voting member’s right to vote upon the plan, and shall be sent to each voting member’s last known address, as shown on the mutual company’s records. If the meeting to vote upon the plan is held during the mutual company’s annual meeting of policyholders, only a combined notice of meeting is required.
(h) The plan shall be voted upon by voting members and shall be adopted upon receiving the affirmative vote of at least2/3of the votes cast by voting members at the meeting. Voting members entitled to vote upon the proposed plan may vote in person or by proxy. The number of votes each voting member may cast shall be determined by the mutual company’s bylaws. If the bylaws are silent, each voting member may cast one vote.
(i) The certificate of incorporation of the converted stock company shall be considered at the meeting of the voting members called for the purpose of adopting the plan of conversion and shall require for adoption the affirmative vote of at least2/3of the votes cast by voting members.
(j)Documents to be filed following approval. —Within 30 days after the voting members have approved the plan in accordance with the requirements of this section, the converted stock company shall file the following documents with the Commissioner:
(1) The minutes of the meeting of the voting members at which the plan was approved.
(2) The certificate of incorporation and bylaws of the converted stock company.