§ 17:48E-54 — Transfer of fair market value.

6. a. At or before the effective time, the entire fair market value of the health service corporation, exclusive of any shares of the converted insurer or any parent corporation issued pursuant to subsection e. of this section, shall be transferred to the foundation, without consideration, in a manner and form acceptable to the commissioner. In determining fair market value, consideration shall be given to value as a going concern, market value, investment or earnings value, net asset value and a control premium, if any. b. If the foundation receives, at the effective time, 100 percent of the shares of the outstanding capital stock of the converted insurer or any parent corporation freely transferable and without restriction, the foundation is presumed to have acquired the entire fair market value of the health service corporation and no appraisal shall be required under subsection c. of section 3 of this act, unless the commissioner finds that the proposed capital structure of the converted insurer does not represent the fair market value of the health service corporation. c. (1) If the foundation receives, at the effective time, 100 percent of shares of the outstanding capital stock of the converted insurer or any parent corporation and the shares are subject to restrictions the commissioner determines are necessary and reasonable to maintain the value of the assets of the converted insurer, the foundation is presumed to have acquired the entire fair market value of the health service corporation and, subject to paragraph (2) of this subsection, no appraisal shall be required under subsection c. of section 3 of this act, unless the commissioner finds that the proposed capital structure of the converted insurer does not represent the fair market value of the health service corporation. (2) In determining whether the restrictions are necessary and reasonable, the commissioner may require an appraisal of the diminution in value of the shares as a result of the restrictions, which appraisal shall take into consideration the increase in value of the shares on account of any registration rights granted to the foundation in connection with the shares of capital stock of the converted insurer or parent corporation. d. If the foundation receives consideration in a form other than as described in subsections b. and c. of this section, the plan of conversion shall include an appraisal of the fair market value of the health service corporation that satisfies the requirements of subsection c. of section 3 of this act. e. This section does not prohibit the inclusion in the plan of conversion of provisions under which the converted insurer would make a simultaneous offering of shares of its authorized but unissued capital stock for cash to either (1) the public, or (2) its directors, officers and employees as a group, or both, in each case under terms and conditions and pursuant to valuation procedures the commissioner approves and that do not materially dilute the value of the shares distributed to the foundation. In no event may in excess of five percent of the aggregate shares of capital stock to be issued by the converted insurer pursuant to the plan of conversion be offered for purchase by the directors, officers and employees, in the aggregate, of the health service corporation and the shares shall be offered only on terms generally available to the public. L.2001,c.131,s.6.