§ 8017 — Requirements applicable to a mutual holding company

§ 8017. Requirements applicable to a mutual holding company. (a) The\nfollowing provisions of this article are applicable to a mutual holding\ncompany:\n (1) the following provisions of article twelve of this chapter shall\napply to a mutual holding company as though it were a domestic mutual\ninsurer: section one thousand two hundred one of this chapter to the\nextent provided in subsection (c) of this section and sections one\nthousand two hundred two, one thousand two hundred six, one thousand two\nhundred eight, one thousand two hundred nine, one thousand two hundred\ntwelve and one thousand two hundred fifteen through one thousand two\nhundred nineteen of this chapter;\n (2) the provisions of the business corporation law that are applicable\nto a domestic mutual life insurer shall apply to a mutual holding\ncompany as though it were a domestic mutual insurer; and\n (3) the provisions of section four thousand two hundred ten of this\nchapter applicable to a domestic mutual life insurer shall be applied to\na mutual holding company as though its members were voting policyholders\nof a mutual life insurer.\n (b) A mutual holding company shall not dissolve, liquidate or wind up\nand dissolve except through proceedings under section eight thousand\nnineteen of this article, article seventy-four of this chapter for the\nliquidation or dissolution of the reorganized insurer or as the\nsuperintendent may otherwise approve. In the event any proceedings are\ninstituted under article seventy-four of this chapter for the complete\nliquidation of reorganized insurer pursuant to this article:\n (1) the mutual holding company formed as part of such reorganization\nshall automatically become a party to such proceedings;\n (2) all of the mutual holding company's assets (including its holdings\nof shares in the reorganized insurer or any stock holding company) shall\nbe deemed assets of the estate of the domestic stock life insurer to the\nextent necessary to satisfy claims of persons who have class one, class\ntwo, class three or class four claims under subsection (a) of section\nseven thousand four hundred thirty-five of this chapter with respect to\nsuch domestic stock life insurer; and\n (3) members of the mutual holding company shall be deemed to hold\nclass eight claims with respect to the mutual holding company under\nsubsection (a) of section seven thousand four hundred thirty-five of\nthis chapter.\n (c) The charter of the mutual holding company shall be filed with the\nsuperintendent and shall contain the matters required to be contained in\nthe charter of a domestic mutual life insurer by section one thousand\ntwo hundred one of this chapter, except that the name of the mutual\nholding company shall contain the word "mutual" and shall not contain\nthe word "insurance," "assurance" or "annuity" and the company's powers\nshall not include doing an insurance business. The charter shall contain\nprovisions stating that:\n (1) it is a mutual holding company organized under this article;\n (2) a purpose shall be to hold, directly or through one or more stock\nholding companies, not less than fifty-one percent of the voting stock\nof a reorganized insurer;\n (3) it shall not be authorized to issue voting stock;\n (4) it shall not be authorized to conduct any business other than that\nof a holding company, except for the acquisition, ownership, management\nand disposition of its assets and all actions reasonably incident\nthereto; and\n (5) it shall have members having the rights specified in this section\nand section eight thousand ten of this article and in its charter and\nby-laws. The charter shall also contain provisions setting forth any\nrights of members of the mutual holding company in the surplus of the\nmutual holding company.\n (d) At least two-thirds of the directors of the mutual holding company\nand of any stock holding company, all of the members of the compensation\ncommittee of the board of directors of the mutual holding company and of\nany stock holding company, at least two-thirds of the members of any\ncommittee responsible for making decisions affecting the capital\nstructure or mergers and acquisitions, and a majority of the directors\non each other committee of the board of directors of the mutual holding\ncompany and any stock holding company shall be outside directors. The\naggregate percentage of voting securities of the reorganized insurer\ndirectly or indirectly owned, controlled or held with the power to vote,\neither personally or by persons (other than the mutual holding company\nand any stock holding company) of which they are directors, officers or\nemployees, by outside directors, shall not exceed three percent or such\nlesser percentage as may be determined by the superintendent in his or\nher approval of the mutual holding company's plan of reorganization\npursuant to this article. The by-laws of the mutual holding company and\nany stock holding company shall provide that the affirmative vote of at\nleast two-thirds of the board of directors of such company shall be\nrequired for any action by such company to adopt a plan of conversion\npursuant to section eight thousand nineteen of this article, enter into\na merger, conduct a public offering or authorize the issuance of any\nvoting stock or security convertible into voting stock of the\nreorganized insurer or the stock holding company to any person other\nthan the mutual holding company or the stock holding company.\n (e) The superintendent may, by regulation, require a mutual holding\ncompany to file annual statements with the superintendent in such form\nas the superintendent shall prescribe.\n (f) With the written approval of the superintendent, and subject to\nthe conditions that the superintendent may impose, a mutual holding\ncompany or stock company may:\n (1) merge or consolidate with, or acquire the assets of, a mutual\nholding company organized pursuant to this article or pursuant to the\nlaws of another state;\n (2) either alone or together with one or more of the reorganized\ninsurer, any stock holding companies or any subsidiaries of any of them,\nmerge or consolidate with or acquire the assets of a mutual life\ninsurer;\n (3) merge or consolidate with any other person.\n (g) A mutual holding company may also acquire the capital stock or\nassets of other persons.\n (h) A member of a mutual holding company is not, as a member,\npersonally liable for the acts, debts, liabilities or obligations of the\ncompany. No assessment of any kind may be imposed upon the members of a\nmutual holding company by the board of directors, members or creditors\nof the mutual holding company or because of any liability of any company\nowned or controlled, in whole or in part, directly or indirectly, by the\nmutual holding company or because of any act, debt or liability of the\nmutual holding company.\n (i) A membership interest in a mutual holding company shall not\nconstitute a security under the laws of this state.\n (j) The superintendent shall retain jurisdiction over any mutual\nholding company organized pursuant to this article.\n (k) Directors of the mutual holding company shall be elected by a\nmajority vote of all members who vote in such election in person or by\nproxy. If the reorganized insurer takes any action (other than election\nof its directors) that would require a vote of policyholders if the\nreorganized insurer were a mutual life insurer, then such action shall\nrequire a vote of members of the mutual holding company.\n