§236.4. Approval by commissioner after public hearing
A. The commissioner shall hold a public hearing upon notice as set forth in this
Section to hear evidence upon whether the plan of reorganization properly protects the
interests of the policyholders as such and as members, serves the best interests of
policyholders and members, and is fair and equitable to policyholders and members. Subpart
G-1 of Part III of this Chapter, R.S. 22:691.1 et seq., is not applicable to any hearing held
under this Subpart, and any such hearing shall be governed by the procedures set forth in this
Subpart.
B.
(1)Within thirty days after the closing of the administrative record after the public
hearing as provided in this Section, the commissioner shall issue a final order or decision
approving the plan if sa
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§236.4. Approval by commissioner after public hearing
A. The commissioner shall hold a public hearing upon notice as set forth in this
Section to hear evidence upon whether the plan of reorganization properly protects the
interests of the policyholders as such and as members, serves the best interests of
policyholders and members, and is fair and equitable to policyholders and members. Subpart
G-1 of Part III of this Chapter, R.S. 22:691.1 et seq., is not applicable to any hearing held
under this Subpart, and any such hearing shall be governed by the procedures set forth in this
Subpart.
B.(1) Within thirty days after the closing of the administrative record after the public
hearing as provided in this Section, the commissioner shall issue a final order or decision
approving the plan if satisfied that each of the following conditions are met:
(a) The interests of the policyholders as such and as members are properly protected.
(b) The plan of reorganization serves the best interests of policyholders and
members.
(c) The plan of reorganization is fair and equitable to policyholders and members.
(2) Any such final decision or order by the commissioner shall be subject to any
modifications of the plan of reorganization the commissioner finds necessary for the
protection of the policyholders and members.
C. Subject to the review and appeal process provided in Subsection E of this Section,
the commissioner's public hearing shall be the exclusive hearing with respect to the plan of
reorganization. Not less than thirty days notice of such public hearing shall be provided by
the reorganizing mutual to qualified voters and to such additional persons and in such
manner as may be specified by the commissioner. The commissioner may promulgate
procedures, rules, and regulations for the conduct of the public hearing.
D.(1) The commissioner may retain at the reorganizing mutual's expense such
attorneys, actuaries, accountants, and other experts as may be reasonably necessary to assist
the commissioner in his examination of a proposed conversion, including any part of such
examination that may occur, at the request of a reorganizing mutual, prior to a plan of
reorganization having been filed with the commissioner pursuant to R.S. 22:236.2. Such
experts shall prepare a projection of the amount of time and expenses necessary to complete
the examination, and all work of these experts is subject to review. If the projected amount
of time and expenses required to complete the examination appear excessive, the
reorganizing mutual may petition the commissioner for appropriate relief, and the
commissioner's decision shall be final.
(2)(a) If the reorganizing mutual's plan of reorganization is required to include a
disclosure of proposed acquisition pursuant to R.S. 22:236.2(B)(5), the commissioner shall
conduct financial and market analysis reviews of the terms, conditions, and price of the
proposed acquisition. The financial and market analysis reviews shall include an
independent valuation of the reorganizing mutual, conducted by an independent valuation
expert with experience valuing similar companies and transactions, as well as a review of the
financial and operational viability of the entity proposing to acquire the reorganizing mutual.
The commissioner shall conduct the reviews and publish the findings on the department's
website prior to the date of the public hearing required by Subsection A of this Section.
(b) The reorganizing mutual shall publish the commissioner's reviews and findings
on the reorganizing mutual's website with the notice of public hearing required by Subsection
C of this Section.
(c) The provisions of this Paragraph do not apply to any reorganizing mutual with
less than ten thousand individual or group health insurance policies issued to Louisiana
residents. For purposes of this Subparagraph, the number of policies shall be the number
reported by the reorganizing mutual in the National Association of Insurance Commissioners'
Market Conduct Annual Statement under the Health section, excluding the Other Health
section, for the most recent year preceding the submission of the demutualization application
to the department.
E.(1) An aggrieved party may appeal the commissioner's final order to the
Nineteenth Judicial District Court within thirty days of the order. The aggrieved party may
also apply for a stay of the commissioner's order.
(2) The district court reviewing an order of the commissioner shall consider only the
certified administrative record and the issues raised before the commissioner. The district
court reviewing an order of the commissioner shall not modify or set aside the order unless
the court finds: (a) error to the prejudice of the appellant's substantial rights arising from the
commissioner's application of the law so grossly as necessarily to imply bad faith; (b) the
commissioner's order or decision was procured by fraud; (c) the commissioner acted outside
of the statutory authority of the Department of Insurance; or (d) the commissioner's action
was arbitrary and capricious. Any appeal of the district court's review of the commissioner's
order shall be taken within thirty days of the judgment of the district court; if not so taken,
the right to have an appellate court review or restrain action under the commissioner's order
or decision shall be preempted and shall forever expire. Collateral attacks on an order of the
commissioner are impermissible and shall be dismissed by the reviewing court.
(3) In any action challenging the validity of or arising out of any action taken or
proposed to be taken under this Subpart, the reorganizing mutual or reorganized company
shall be entitled at any stage of the proceedings before final judgment to petition the court
to require the plaintiff or plaintiffs to give security for the reasonable costs, including
attorney fees, which may be incurred by the reorganizing mutual or reorganized company,
to which security the reorganizing mutual or reorganized company shall have recourse in
such amount as the court having jurisdiction of such action shall determine upon termination
of such action. The amount of security may thereafter from time to time be increased or
decreased in the discretion of the court having jurisdiction of such action upon a showing that
the security provided has or may become inadequate or excessive. If the court renders
judgment in favor of the reorganizing mutual or reorganized company, the court may in its
discretion award attorney fees and costs to such prevailing party.
F. The provisions of this Section shall apply to all actions challenging the validity
of or arising out of any action taken or proposed to be taken under this Subpart and R.S.
22:71 and 72.