§ 26.1-12.2-07 — Conversion of a mutual holding company

North Dakota § 26.1-12.2-07

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-12.2: Mutual Property and Casualty Insurance Company Conversion

Text

1. If a mutual holding company converts from a mutual to stock form, the conversion
must comply with the provisions of this chapter.
2. If a mutual holding company seeks to convert to stock form under this chapter and it
has previously completed one or more minority stock offerings in which policyholders
were granted subscription rights pursuant to this chapter, the valuation required by
subsection 4 of section 26.1-12.2-03 must take into account the existence of this
minority interest as provided in this section. The amount of capital stock required to be
offered by the mutual holding company or another corporation that is participating in
the plan of conversion as provided in item 3 of subparagraph a of paragraph 2 of
subdivision c of subsection 1 of section 26.1-12.2-03 may be expressed as a range of
value and must equal: the pro forma fair market value of the mutual holding company,
multiplied by one minus a quotient equal to the number of issued minority shares,
divided by the sum of the issued minority shares and the number of shares held by the
mutual holding company.
3. The plan of conversion of a mutual holding company must provide that any
outstanding issued minority shares must be exchanged for stock issued by the

converting mutual company or the stock of any corporation participating in the
conversion of the mutual holding company pursuant to subparagraph a of paragraph 2
of subdivision c of subsection 1 of section 26.1-12.2-03. The mutual holding company
shall demonstrate to the satisfaction of the commissioner that the basis for the
exchange is fair and reasonable. An exchange in which the holders of outstanding
issued minority shares retain approximately the same percentage ownership in the
resulting company as the quotient of the number of issued minority shares, divided by
the sum of issued minority shares and the number of shares held by the mutual
holding company, is presumed to be fair and reasonable.
4. If a mutual holding company seeking to convert under this chapter previously
completed one or more minority stock offerings, the conversion of the mutual holding
company to stock form may not be consummated unless a majority of the shares
issued and outstanding to persons other than the mutual holding company vote in
favor of the conversion. This vote requirement is in addition to the required
policyholder vote.