§ 7118 — Plan for acquisition of minority interests in a subsidiary insurer

§ 7118. Plan for acquisition of minority interests in a subsidiary\ninsurer. (a) Definitions. In this section:\n (1) "Parent" means a corporation directly or indirectly owning at\nleast ninety-five percent of the aggregate issued and outstanding shares\nof all classes of voting shares of a subsidiary.\n (2) "Subsidiary" means a domestic company whose voting shares are so\nowned.\n (b) Any parent or subsidiary may, pursuant to a plan for acquisition\nof minority interests in such subsidiary, adopted by the board of\ndirectors, trustees or other governing body of the parent or subsidiary,\nacquire all of the subsidiary's remaining issued and outstanding voting\nshares, by exchange of shares, other securities, cash, other\nconsideration or any combination thereof.\n (c) Such plan shall set forth:\n (1) the name of the subsidiary;\n (2) the total number of issued and outstanding voting shares of each\nclass of the subsidiary, the number of its shares owned by the parent\nand, if either of the foregoing is subject to change prior to the\neffective date of acquisition, the manner in which any change may occur;\n (3) the terms and conditions of the plan, including the manner and\nbasis of exchanging the shares to be acquired for shares or other\nsecurities of the parent, for cash, other consideration, or any\ncombination of the foregoing, the proposed effective date of acquisition\nand a statement clearly describing the rights of dissenting shareholders\nto demand appraisal;\n (4) if the parent has adopted the plan and is neither a domestic\ncorporation nor an authorized insurer, its agreement to be bound by\nsection seven thousand one hundred nineteen of this article with respect\nto the plan, its consent to the enforcement against it in this state of\nthe rights of shareholders pursuant to the plan, and a designation of\nthe superintendent as the agent upon whom process may be served against\nthe parent in the manner set forth in section one thousand two hundred\ntwelve of this chapter in any action or proceeding to enforce any such\nrights; and\n (5) such other provisions with respect to the plan as the board of\ndirectors, trustees or other governing body deems necessary or\ndesirable, or which the superintendent may prescribe.\n (d) Upon adoption of the plan, it shall be executed by the president\nand attested by the secretary, or officers corresponding to either of\nthem, under the corporate seal of the parent or subsidiary which has\nadopted the plan, as the case may be. Thereupon, a certified copy of the\nplan, together with a certificate of its adoption subscribed by such\nofficers and affirmed by them as true under the penalties of perjury and\nunder the seal of the parent or the subsidiary, as the case may be,\nshall be submitted to the superintendent for his approval. The\nsuperintendent shall thereupon consider the plan and, if satisfied that\nit complies with this article, is fair and equitable and not\ninconsistent with law, he shall approve the plan. If the superintendent\ndisapproves the plan, notification of his disapproval, assigning the\nreasons therefor, shall be given in writing by him to the parent or\nsubsidiary that submitted the plan. No plan shall take effect unless the\napproval of the superintendent has been obtained.\n (e) If the superintendent approves the plan, the parent or the\nsubsidiary which has adopted the plan shall deliver to each person who,\nas of the date of delivery, is a holder of record of shares to be\nacquired, a copy of the plan, or a summary thereof approved by the\nsuperintendent, in person or by depositing the same in the post office,\npostage prepaid, addressed to the shareholder at his address of record.\nOn or before the date of acquisition proposed in the plan, the parent or\nthe subsidiary which has adopted the plan shall file with the\nsuperintendent a certificate, executed by its president and attested by\nits secretary, or by officers corresponding to either of them, and\nsubscribed by such officers and affirmed by them as true under the\npenalties of perjury, and under the seal of the parent or the\nsubsidiary, as the case may be, attesting to compliance with this\nsubsection.\n (f) Upon compliance with this section, ownership of the shares to be\nacquired pursuant to the plan shall vest in the parent or the subsidiary\nwhich has adopted the plan on the date of acquisition proposed in the\nplan whether or not the certificates for such shares have been\nsurrendered for exchange. If the plan was adopted by the parent it shall\nbe entitled to have new certificates registered in its name. If the\nplan was adopted by the subsidiary the shares shall be retired and the\ncapital of the subsidiary reduced by the par value of the retired\nshares. Shareholders whose shares have been so acquired shall thereafter\nretain only the right either to receive the consideration to be paid in\nexchange for their shares pursuant to the plan or to demand appraisal\npursuant to section seven thousand one hundred nineteen of this article.\n (g) Neither the right granted by this section nor the exercise thereof\nby a parent or subsidiary shall preclude the exercise by it of any other\nrights it may have under this article.\n