§ 162

Certificate of Merger or Consolidation or Plan of Exchange and Certificate of Approval. (1) Upon the execution of an agreement of merger or consolidation or plan of exchange, there shall be delivered to the Director: (a) two duplicate originals of the agreement or plan; (b) affidavits of officers of each of the companies setting forth the facts necessary to show that all requirements of law with respect to notices to persons entitled to vote have been complied with; (c) certificates of the secretaries or assistant secretaries or corresponding officers of each of the companies, in case of a merger or consolidation, or of the company to be acquired in case of a plan of exchange, certifying to the number of shares, if any, outstanding, the number of shares voted for and against such agreement or plan, and further in the case of a merger or consolidation (1) the number of policyholders represented at the meeting at which the agreement was considered, and (2) the number of votes cast by policyholders for and against such agreement or (3) in the case of a fraternal benefit society, the number of delegates of the supreme legislative or governing body, and the number of votes cast by the delegates for and against the agreement; (d) the certificates required by Section 171; (e) if the surviving or new company is a domestic company and any foreign or alien company is a party to the merger or consolidation and the laws of the state or country under which such foreign or alien company is incorporated require approval of the merger or consolidation by an official of such state or country, a certificate of approval of such official; and (f) in case of consolidation where the new company is a foreign or alien company, an instrument appointing the Director and his or her successor or successors in office, the attorney of such company for service of process, containing the same provisions and having the same effect as the instrument required of a foreign or alien company in order to be admitted to transact business in this State. In addition, the Director shall be provided, in substantially the same form, the information required under Article VIII 1/2 of this Code. (2) In case the surviving or new company is a domestic company, if the Director finds that: (a) the agreement of merger or consolidation is in accordance with the provisions of this Article and not inconsistent with the laws and the Constitutions of this State and the United States; (b) the surviving or new company has complied with all applicable provisions of this Code; (c) no reasonable objection exists to such merger or consolidation; and (d) the standards established under Article VIII 1/2 are satisfied; he or she shall approve the agreement. The provisions of any law with reference to age limits and medical examination shall be inoperative in so far as agreements of merger or consolidation are concerned. If the agreement of merger or consolidation be approved by the Director, he or she shall file the affidavits and certificates and one of the duplicate originals of the agreement in his or her office, endorse upon the other duplicate original his or her approval thereof, and deliver it, together with a certificate of merger or consolidation, as the case may be, to the surviving or new company. In the case of a consolidation, the Director shall also issue a certificate of authority to the new company. (3) In case the surviving or new company is a foreign or alien company, if the Director finds that: (a) the agreement of merger or consolidation is in accordance with the provisions of this Article and not inconsistent with the laws and the Constitutions of this State and the United States; (b) the agreement of merger or consolidation provides for the assumption by the new or surviving company of all the liabilities and obligations of the companies parties to the merger or consolidation and otherwise affords proper protection for creditors and policyholders and that such provisions are not inconsistent with the laws of the state or country of incorporation of such new or surviving company; (c) the surviving or new company has complied with all applicable provisions of this Code; (d) no reasonable objection exists to such merger or consolidation; and (e) the standards established under Article VIII 1/2 are satisfied; he or she shall approve the agreement. If the agreement be approved by the Director, he or she shall file the affidavits and certificates and one of the duplicate originals of the agreement in his or her office, endorse upon the other duplicate original his or her approval thereof, and deliver it, together with a certificate of approval of the merger or consolidation, as the case may be, to the surviving or new company. (4) In the case of a plan of exchange, if the Director finds that the parties to the exchange have established that: (a) the plan, if effective, will not tend adversely to affect the financial stability or management of any domestic company which is a party thereto or the general capacity or intention to continue the safe and prudent transaction of the insurance business of such domestic company or companies; (b) the interests of the policyholders and shareholders of each domestic insurance company which is a party to the plan are protected; (c) the competence, experience and integrity of those persons who would control the operation of the domestic company are such as to be in the best interests of the policyholders of such company to permit such exchange; (d) the terms and conditions of the plan are fair and reasonable; and (e) the standards established under Article VIII 1/2 are satisfied; he or she shall approve the plan of exchange. If the plan of exchange be approved by the Director, he or she shall file the affidavits and certificates and one of the duplicate originals of the plan of exchange in his or her office, endorse upon the other duplicate original his or her approval thereof, and deliver it, together with a certificate of approval of the plan of exchange to the domestic company. (5) If the Director refuses to approve the agreement of merger or consolidation, or plan of exchange, notice of such refusal, assigning the reasons therefor, shall be given in writing by the Director to each of the companies party thereto, within 60 days from the date of the delivery of such agreements or plan to him or her, and he or she shall grant any of such companies a hearing upon request. The hearing shall be held within 30 days of the Director's receipt of request for hearing. All persons to whom it is proposed to issue securities in such agreements or exchange shall have a right to appear. Within 30 days after the close of the hearing the Director shall approve or disapprove or place conditions precedent upon his or her approval of the merger or consolidation or plan by issuing a written order stating his or her determination and the reasons therefor.

Legislative History

(Source: P.A. 90-381, eff. 8-14-97.)