§ 27-15-3-2 — Content of application

Indiana § 27-15-3-2

• Jurisdiction: Indiana
• Title 27: INSURANCE
• Art. 15: DEMUTUALIZATION OF MUTUAL INSURANCE
• Ch. 3: Application for Conversion

Text

The application must contain the following
information, together with such additional information as the
commissioner may require:
(1) The plan of conversion and a certificate of the secretary of the
converting mutual certifying the adoption of the plan by the board
of directors.
(2) A statement of the reasons for the proposed conversion and
why the conversion is in the best interests of the converting
mutual, the eligible members, and the other policyholders. The
statement must include an analysis of the risks and benefits to the
converting mutual and its members of the proposed conversion
and a comparison of the risks and benefits of the conversion with
the risks and benefits of reasonable alternatives to a conversion.
(3) A five (5) year business plan and at least two (2) years of
financial projections of the former mutual and any parent
company.
(4) Any plans that the former mutual or any parent company may
have to:
(A) raise additional capital through the issuance of stock or
otherwise;
(B) sell or issue stock to any person, including any
compensation or benefit plan for directors, officers, or
employees under which stock may be issued;
(C) liquidate or dissolve any company or sell any material
assets;
(D) merge or consolidate or pursue any other form of
reorganization with any person; or
(E) make any other material change in investment policy,
business, corporate structure, or management.
(5) Any plans for a delayed distribution of consideration to
eligible members or restrictions on sale or transfer of stock or
other securities.
(6) A copy of the form of trust agreement, if a distribution of
consideration is to be delayed by more than six (6) months after
the effective date of the conversion.
(7) A plan of operation for a closed block, if a closed block is
used for the preservation of the reasonable dividend expectations
of eligible members and other policyholders with policies that
provide for the distribution of policy dividends.
(8) Copies of the amendment to the articles of incorporation
proposed by the board of directors and the proposed bylaws of the
former mutual and copies of the existing and any proposed
articles of incorporation and bylaws of any parent company.
(9) A list of all individuals who are or have been selected to
become directors or officers of the former mutual and any parent
company, or the individuals who perform or will perform duties
customarily performed by a director or officer, and the following
information concerning each individual on the list unless the
information is already on file with the commissioner:
(A) The individual's principal occupation.
(B) All offices and positions the individual has held in the
preceding five (5) years.
(C) Any crime of which the individual has been convicted
(other than traffic violations) in the preceding ten (10) years.
(D) Information concerning any personal bankruptcy of the
individual or the individual's spouse during the previous seven
(7) years.
(E) Information concerning the bankruptcy of any corporation
or other entity of which the individual was an officer or director
during the previous seven (7) years.
(F) Information concerning allegations of state or federal
securities law violations made against the individual that within
the previous ten (10) years resulted in:
(i) a determination that the individual violated state or federal
securities law;
(ii) a plea of nolo contendere; or
(iii) a consent decree.
(G) Information concerning the suspension, revocation, or other
disciplinary action during the previous ten (10) years of any
state or federal license issued to the individual.
(H) Information as to whether the individual was refused a bond
during the previous ten (10) years.
(10) A fairness opinion addressed to the board of directors of the
converting mutual from a qualified, independent financial adviser,
asserting:
(A) that the provision of stock, cash, policy benefits, or other
forms of consideration upon the extinguishing of the converting
mutual's membership interests under the plan of conversion and
the amendment to the articles of incorporation is fair to the
eligible members, as a group, from a financial point of view;
and
(B) whether the total consideration under clause (A) is equal to
or greater than the surplus of the converting mutual.
(11) An actuarial opinion as to the following:
(A) The reasonableness and appropriateness of the
methodology or formulas used to allocate consideration among
eligible members, consistent with this article.
(B) The reasonableness of the plan of operation and the
sufficiency of the assets allocated to the closed block, if a
closed block is used for the preservation of the reasonable
dividend expectations of eligible members and other
policyholders with policies that provide for the distribution of
policy dividends.
(12) If any of the consideration to be distributed to eligible
members consists of stock or other securities, a description of the
plans made by the former mutual or its parent company to assure
that an active public trading market for the stock or other
securities will develop within a reasonable amount of time after
the effective date of the plan of conversion and that eligible
members who receive stock or other securities will be able to sell
their stock or other securities, subject to any delayed distribution
or transfer restrictions under this article, at reasonable cost and
effort. The plans may consist of the following:
(A) Appointing a registrar and transfer agent for the stock or
other securities.
(B) Making filings, applications, or registrations for the stock
or other securities with the federal Securities and Exchange
Commission and state securities commissioners.
(C) Listing the stock or other securities on a national or other
securities exchange.
(D) Facilitating coverage of the stock or other securities by
research analysts and securing the commitment of at least one
(1) market maker to make a market in the stock or other
securities.
(E) Conducting an underwritten public offering of the same
class of stock or other securities, promptly following the
effectiveness of the plan of conversion, in order to facilitate the
development of a public market.
(F) Making available a procedure for eligible members holding
small numbers or amounts of stock or other securities to sell
their stock or other securities to the former mutual or a parent
company at market value without the payment of brokerage
commissions or similar fees, or to sell their stock or other
securities in the market through a broker with discounted
brokerage commissions or fees.
(13) Any additional information, documents, or materials that the
converting mutual determines to be necessary.
(14) Any other additional information, documents, or materials
that the commissioner requests in writing.

Legislative History

As added by P.L.94-1999, SEC.3.