As Reported by the House Insurance Committee 1
122nd General Assembly 4
Regular Session Sub. H. B. No. 370 5
1997-1998 6
REPRESENTATIVES BATCHELDER-BUCHY-CAREY-CATES-COLONNA-GARCIA- 8
HAINES-HODGES-HOUSEHOLDER-JERSE-METELSKY-MOTTLEY-NETZLEY-OPFER- 9
REID-SCHULER-STAPLETON-TAYLOR-TERWILLEGER-TIBERI-VAN VYVEN- 10
WACHTMANN-YOUNG 11
13
A B I L L
To amend section 3901.043; to amend, for the purpose 15
of adopting a new section number as indicated in 17
parentheses, section 3913.31 (3913.40); and to 18
enact new section 3913.31 and sections 3913.25, 19
3913.26, 3913.27, 3913.28, 3913.29, 3913.30, 20
3913.32, 3913.33, 3913.34, 3913.35, 3913.36, and 21
3913.37 of the Revised Code to permit a mutual 22
insurance company to raise capital by 23
reorganizing as a stock insurance company that is 24
a majority-owned subsidiary of a mutual insurance 25
holding company. 26
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 28
Section 1. That section 3901.043 be amended, section 30
3913.31 (3913.40) be amended for the purpose of adopting a new 32
section number as indicated in parentheses, and new section 33
3913.31 and sections 3913.25, 3913.26, 3913.27, 3913.28, 3913.29, 34
3913.30, 3913.32, 3913.33, 3913.34, 3913.35, 3913.36, and 3913.37 35
of the Revised Code be enacted to read as follows: 36
Sec. 3901.043. The superintendent of insurance may adopt 45
rules in accordance with Chapter 119. of the Revised Code to 46
establish reasonable fees for any service or transaction 47
performed by the department of insurance pursuant to section 48
1738.04, 1742.03, 3901.321, 3901.341, 3907.09, 3907.10, 3907.11,
2
3907.12, 3911.011, 3913.31 3913.40, 3915.14, 3917.06, 3918.07, 50
3923.02, 3935.04, 3937.03, 3953.28, 3957.12, or 3957.13 of the 51
Revised Code or any provision in sections 3913.01 to 3913.23 or 52
in Chapter 3905. of the Revised Code, if no fee is otherwise 53
provided under Title XVII or XXXIX of the Revised Code for such 54
service or transaction. Any fee collected pursuant to those 55
rules shall be paid into the state treasury to the credit of the 56
department of insurance operating fund.
Sec. 3913.25. AS USED IN SECTIONS 3913.25 TO 3913.37 OF 58
THE REVISED CODE: 60
(A) "INTERMEDIATE HOLDING COMPANY" MEANS A STOCK 63
CORPORATION THAT OWNS ALL OF THE SHARES OF VOTING STOCK OF ONE OR 64
MORE REORGANIZED STOCK COMPANIES AFTER A REORGANIZATION UNDER 65
SECTIONS 3913.25 TO 3913.37 OF THE REVISED CODE. "INTERMEDIATE 67
HOLDING COMPANY" ALSO MEANS A STOCK CORPORATION THAT IS THE 68
PARENT OR SUBSIDIARY OF ANOTHER INTERMEDIATE HOLDING COMPANY. 69
(B) "MUTUAL INSURANCE COMPANY" MEANS A DOMESTIC OR FOREIGN 72
MUTUAL LIFE INSURANCE COMPANY OR A DOMESTIC OR FOREIGN MUTUAL 73
INSURANCE COMPANY OTHER THAN A MUTUAL LIFE INSURANCE COMPANY. 74
(C) "MUTUAL INSURANCE HOLDING COMPANY" MEANS A DOMESTIC 77
MUTUAL INSURANCE HOLDING COMPANY INCORPORATED PURSUANT TO A 78
REORGANIZATION PLAN ADOPTED UNDER SECTIONS 3913.26 TO 3913.28 OF 79
THE REVISED CODE, WHICH COMPANY IS THE PARENT COMPANY OF A 82
REORGANIZED STOCK COMPANY OR OF AN INTERMEDIATE HOLDING COMPANY. 83
(D) "POLICYHOLDER" HAS THE SAME MEANING AS IN SECTION 86
3913.10 OF THE REVISED CODE WHEN USED WITH RESPECT TO A LIFE 89
INSURANCE COMPANY, AND HAS THE SAME MEANING AS IN SECTION 3913.20 90
OF THE REVISED CODE WHEN USED WITH RESPECT TO AN INSURANCE 92
COMPANY OTHER THAN A LIFE INSURANCE COMPANY.
(E) "REORGANIZATION PLAN" MEANS A REORGANIZATION PLAN 95
ADOPTED BY A MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS IN 96
ACCORDANCE WITH SECTION 3913.26 OF THE REVISED CODE. 98
(F) "REORGANIZED STOCK COMPANY" MEANS THE DOMESTIC OR 101
FOREIGN STOCK INSURANCE COMPANY RESULTING FROM A DOMESTIC OR 102
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FOREIGN MUTUAL INSURANCE COMPANY'S REORGANIZATION UNDER SECTIONS 103
3913.25 TO 3913.37 OF THE REVISED CODE. 105
(G) "VOTING STOCK" MEANS SECURITIES OF ANY CLASS OR ANY 108
OWNERSHIP INTEREST HAVING VOTING POWER FOR THE ELECTION OF 109
DIRECTORS, TRUSTEES, OR MANAGEMENT OF A PERSON, OTHER THAN 110
SECURITIES HAVING VOTING POWER ONLY AS A RESULT OF THE OCCURRENCE 111
OF A CONTINGENCY.
Sec. 3913.26. (A) A MUTUAL INSURANCE COMPANY, BY ITSELF 114
OR TOGETHER WITH ONE OR MORE OTHER MUTUAL INSURANCE COMPANIES 115
ACTING PURSUANT TO A JOINT REORGANIZATION PLAN, MAY REORGANIZE IN 116
ACCORDANCE WITH THE REQUIREMENTS OF SECTIONS 3913.25 TO 3913.37 117
OF THE REVISED CODE. 119
(B)(1) A MUTUAL INSURANCE COMPANY MAY ADOPT A 122
REORGANIZATION PLAN THAT IS CONSISTENT WITH THE REQUIREMENTS OF 123
SECTIONS 3913.25 TO 3913.37 OF THE REVISED CODE. SUCH A 125
REORGANIZATION PLAN MAY ONLY BE ADOPTED BY THE AFFIRMATIVE VOTE 126
OF NOT LESS THAN TWO-THIRDS OF THE MUTUAL INSURANCE COMPANY'S 127
BOARD OF DIRECTORS.
(2) AT ANY TIME PRIOR TO THE MAILING TO POLICYHOLDERS OF 129
THE NOTICE PURSUANT TO DIVISION (B) OF SECTION 3913.27 OF THE 132
REVISED CODE, WHICH NOTICE INCLUDES A SUMMARY OF THE 134
REORGANIZATION PLAN, A MUTUAL INSURANCE COMPANY'S BOARD OF 135
DIRECTORS MAY AMEND THE REORGANIZATION PLAN BY THE AFFIRMATIVE 136
VOTE OF NOT LESS THAN TWO-THIRDS OF THE BOARD OF DIRECTORS. AT 138
ANY TIME BEFORE A REORGANIZATION PLAN HAS RECEIVED THE APPROVAL 139
OF THE SUPERINTENDENT OF INSURANCE UNDER SECTION 3913.28 OF THE 140
REVISED CODE, A MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS MAY 142
WITHDRAW THE REORGANIZATION PLAN BY THE AFFIRMATIVE VOTE OF NOT 143
LESS THAN TWO-THIRDS OF THE BOARD OF DIRECTORS. 144
(C) A REORGANIZATION PLAN SHALL PROVIDE FOR THE 147
INCORPORATION OF A MUTUAL INSURANCE HOLDING COMPANY, AND SHALL 148
PROVIDE FOR THE CONTINUATION OF THE CORPORATE EXISTENCE OF THE 149
MUTUAL INSURANCE COMPANY AS A STOCK INSURANCE COMPANY. 150
(D) A REORGANIZATION PLAN SHALL PROVIDE THAT ALL OF THE 153
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INITIAL SHARES OF VOTING STOCK OF A REORGANIZED STOCK COMPANY 154
SHALL BE ISSUED TO ITS PARENT MUTUAL INSURANCE HOLDING COMPANY OR 155
TO AN INTERMEDIATE HOLDING COMPANY. NOTHING IN SECTIONS 3913.25 156
TO 3913.37 OF THE REVISED CODE, HOWEVER, SHALL BE CONSTRUED AS 159
LIMITING OR RESTRICTING THE AUTHORITY OF A REORGANIZED STOCK 160
COMPANY OR OF AN INTERMEDIATE HOLDING COMPANY TO ISSUE SECURITIES 161
OTHER THAN VOTING STOCK.
(E)(1) A REORGANIZATION PLAN SHALL PROVIDE THAT THE 164
MEMBERSHIP INTERESTS OF THE POLICYHOLDERS OF A MUTUAL INSURANCE 165
COMPANY SHALL BECOME MEMBERSHIP INTERESTS IN THE MUTUAL INSURANCE 166
HOLDING COMPANY, AND THAT CONCURRENTLY THE POLICYHOLDERS' 167
MEMBERSHIP INTERESTS IN THE MUTUAL INSURANCE COMPANY SHALL BE 168
EXTINGUISHED.
(2) A REORGANIZATION PLAN SHALL PROVIDE THAT THE 170
POLICYHOLDERS OF THE REORGANIZED STOCK COMPANY SHALL BECOME 171
MEMBERS OF THE MUTUAL INSURANCE HOLDING COMPANY IN ACCORDANCE 172
WITH THE ARTICLES OF INCORPORATION AND THE CODE OF REGULATIONS OF 174
THE MUTUAL INSURANCE HOLDING COMPANY.
(F) A REORGANIZATION PLAN SHALL PROVIDE THAT THE MUTUAL 177
INSURANCE HOLDING COMPANY SHALL AT ALL TIMES OWN A MAJORITY OF 178
THE VOTING STOCK OF THE REORGANIZED STOCK COMPANY. 179
ALTERNATIVELY, A REORGANIZATION PLAN SHALL PROVIDE THAT THE 180
MUTUAL INSURANCE HOLDING COMPANY SHALL AT ALL TIMES OWN A 181
MAJORITY OF THE VOTING STOCK OF AN INTERMEDIATE HOLDING COMPANY, 182
WHICH INTERMEDIATE HOLDING COMPANY SHALL AT ALL TIMES OWN ALL OF 183
THE VOTING STOCK OF THE REORGANIZED STOCK COMPANY. THE SHARES OF 185
VOTING STOCK REQUIRED TO BE OWNED BY THE MUTUAL INSURANCE HOLDING 186
COMPANY, AND BY THE INTERMEDIATE HOLDING COMPANY, IF ANY, SHALL 187
NOT BE PLEDGED, HYPOTHECATED, OR IN ANY WAY ENCUMBERED WITH 188
REGARD TO ANY OBLIGATION, GUARANTY, OR COMMITMENT UNDERTAKEN BY 189
OR ON BEHALF OF THE MUTUAL INSURANCE HOLDING COMPANY, OR THE 190
INTERMEDIATE HOLDING COMPANY, IF ANY. 191
(G) THE BOARD OF DIRECTORS OF A MUTUAL INSURANCE COMPANY 194
SHALL FILE ALL OF THE FOLLOWING WITH THE SUPERINTENDENT WITHIN 195
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NINETY DAYS AFTER ADOPTING A REORGANIZATION PLAN: 196
(1) THE REORGANIZATION PLAN; 198
(2) THE FORMS OF NOTICES TO BE PROVIDED TO POLICYHOLDERS 200
UNDER DIVISION (B) OF SECTION 3913.27 OF THE REVISED CODE; 203
(3) THE FORM OF PROXY, IF ANY, TO BE SOLICITED FROM 205
POLICYHOLDERS; 206
(4) THE PROPOSED ARTICLES OF INCORPORATION AND CODE OF 208
REGULATIONS FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE 209
REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, FOR AN 210
INTERMEDIATE HOLDING COMPANY. THE ARTICLES OF INCORPORATION AND 211
CODE OF REGULATIONS SHALL BE SIGNED BY THE CHAIRPERSON OF THE 212
BOARD, THE PRESIDENT OR VICE-PRESIDENT, AND BY THE SECRETARY OR 213
AN ASSISTANT SECRETARY, OF THE MUTUAL INSURANCE COMPANY. 214
(5) SUCH OTHER DOCUMENTS OR INFORMATION AS THE 216
SUPERINTENDENT MAY REQUIRE. 217
(H) NOTHING IN SECTIONS 3913.25 TO 3913.37 OF THE REVISED 221
CODE SHALL LIMIT OR RESTRICT AN INTERMEDIATE HOLDING COMPANY'S 223
AUTHORITY UNDER SECTION 1701.13 OF THE REVISED CODE TO FORM OR 225
ACQUIRE THE CONTROL OF OTHER CORPORATIONS, WHETHER DOMESTIC OR 226
FOREIGN, PROFIT OR NONPROFIT. 227
Sec. 3913.27. (A) A REORGANIZATION PLAN ADOPTED BY A 230
MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS PURSUANT TO SECTION 231
3913.26 OF THE REVISED CODE SHALL BE VOTED UPON BY A MUTUAL 234
INSURANCE COMPANY'S POLICYHOLDERS AT A POLICYHOLDERS' MEETING. A 235
POLICYHOLDER IS ENTITLED TO CAST ONLY ONE VOTE, IN PERSON OR BY 236
PROXY, ON THE REORGANIZATION PLAN REGARDLESS OF THE NUMBER OF 237
POLICIES OR CONTRACTS THAT THE POLICYHOLDER MAY OWN OR HOLD. 238
ONLY PROXIES SPECIFICALLY RELATED TO THE REORGANIZATION PLAN 240
SHALL BE USED IN DETERMINING WHETHER THE REORGANIZATION PLAN IS 241
APPROVED PURSUANT TO DIVISION (C) OF THIS SECTION. 242
(B) ALL POLICYHOLDERS SHALL BE GIVEN NOTICE OF THE 245
POLICYHOLDERS' MEETING TO VOTE UPON THE REORGANIZATION PLAN AT 246
LEAST THIRTY DAYS PRIOR TO THE DATE FIXED FOR THE POLICYHOLDERS' 247
MEETING. NOTICE OF THE TIME AND PLACE OF SUCH MEETING SHALL BE 248
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SENT BY MAIL TO EACH POLICYHOLDER AT THE POLICYHOLDER'S POST 249
OFFICE ADDRESS AS IT APPEARS ON THE BOOKS AND RECORDS OF THE 250
COMPANY. THE NOTICE SHALL INCLUDE A SUMMARY OF THE 252
REORGANIZATION PLAN ADOPTED BY THE BOARD OF DIRECTORS, INCLUDING 254
AN ANALYSIS OF THE MATERIAL FINANCIAL ASPECTS AND POTENTIAL FOR 255
DILUTION OF POLICYHOLDERS' INTERESTS IN THE MUTUAL INSURANCE 256
COMPANY UNDER THE REORGANIZATION PLAN, A UNIFORM BALLOT FOR 257
VOTING ON THE QUESTION OF THE REORGANIZATION PLAN, AND A 258
STATEMENT INFORMING THE POLICYHOLDERS THAT THE SUPERINTENDENT OF 259
INSURANCE MAY FIX A TIME AND PLACE FOR A PUBLIC HEARING ON THE 260
REORGANIZATION PLAN, TO BE HELD WITHIN THIRTY DAYS AFTER THE 261
SUPERINTENDENT'S RECEIPT OF WRITTEN NOTICE FROM THE BOARD OF 262
DIRECTORS OF THE POLICYHOLDERS' APPROVAL OF THE REORGANIZATION 263
PLAN. 264
(C) A REORGANIZATION PLAN SHALL BE APPROVED UPON RECEIVING 267
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE VOTES CAST BY 268
POLICYHOLDERS.
(D)(1) IF A REORGANIZATION PLAN IS APPROVED AT THE 271
POLICYHOLDERS' MEETING, THE BOARD OF DIRECTORS OF A MUTUAL 272
INSURANCE COMPANY SHALL PROVIDE THE SUPERINTENDENT WITH WRITTEN 273
NOTICE OF THAT APPROVAL WITHIN TEN DAYS AFTER THE POLICYHOLDERS' 274
MEETING. 275
(2) THE SUPERINTENDENT MAY, WITHIN TEN DAYS AFTER 277
RECEIVING THE NOTICE FROM THE BOARD OF DIRECTORS, PROVIDE WRITTEN 279
NOTICE TO THE MUTUAL INSURANCE COMPANY OF THE SUPERINTENDENT'S 280
INTENT TO CONDUCT ONE OR MORE PUBLIC HEARINGS ON THE 281
REORGANIZATION PLAN. AT A MINIMUM, THE SUPERINTENDENT'S NOTICE 282
TO THE MUTUAL INSURANCE COMPANY SHALL INCLUDE A TIME AND A PLACE 283
FOR THE FIRST PUBLIC HEARING, WHICH SHALL BE HELD WITHIN THIRTY 284
DAYS AFTER THE SUPERINTENDENT'S RECEIPT OF THE NOTICE FROM THE 285
BOARD OF DIRECTORS.
(3) WITHIN TEN DAYS AFTER THE MUTUAL INSURANCE COMPANY'S 287
RECEIPT OF A NOTICE FROM THE SUPERINTENDENT OF THE 288
SUPERINTENDENT'S INTENT TO CONDUCT ONE OR MORE PUBLIC HEARINGS ON 290
7
THE REORGANIZATION PLAN, IF SUCH NOTICE IS PROVIDED, THE MUTUAL 291
INSURANCE COMPANY SHALL PROVIDE NOTICE OF THE TIME AND PLACE OF 292
SUCH HEARING BY CAUSING THIS INFORMATION TO BE PUBLISHED ONCE 293
EACH WEEK FOR TWO CONSECUTIVE WEEKS IN A NEWSPAPER PUBLISHED AND 294
OF THE LARGEST CIRCULATION IN THE COUNTIES OF CUYAHOGA, FRANKLIN, 295
HAMILTON, AND LUCAS, IN THE COUNTY IN THIS STATE IN WHICH THE 297
MUTUAL INSURANCE COMPANY HAS ITS PRINCIPAL OFFICE, AND IN THE 298
NEWSPAPER OF THE LARGEST CIRCULATION IN THE STATE CAPITAL OF EACH 299
STATE OF THE UNITED STATES IN WHICH THE COMPANY MAINTAINS AN 300
OFFICE OR AGENCY FOR THE SOLICITATION OF INSURANCE. 301
(E) THE PROPOSED ARTICLES OF INCORPORATION AND CODE OF 304
REGULATIONS FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE 305
REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, FOR AN 306
INTERMEDIATE HOLDING COMPANY, AS FILED WITH THE SUPERINTENDENT 307
PURSUANT TO DIVISION (G)(4) OF SECTION 3913.26 OF THE REVISED 310
CODE, SHALL ALSO BE VOTED UPON BY THE MUTUAL INSURANCE COMPANY'S 311
POLICYHOLDERS AT THE POLICYHOLDERS' MEETING HELD PURSUANT TO THIS 312
SECTION. THE ARTICLES OF INCORPORATION AND CODE OF REGULATIONS 313
SHALL BE ADOPTED UPON RECEIVING THE AFFIRMATIVE VOTE AT LEAST A 314
MAJORITY OF THE VOTES CAST BY POLICYHOLDERS. 315
(F) AT ALL PUBLIC HEARINGS CONDUCTED BY THE SUPERINTENDENT 318
PURSUANT TO THE SUPERINTENDENT'S AUTHORITY UNDER DIVISION (D)(2) 320
OF THIS SECTION, THE SUPERINTENDENT MAY SUMMON AND COMPEL THE 321
ATTENDANCE AND TESTIMONY OF WITNESSES AND THE PRODUCTION OF BOOKS 322
AND PAPERS. THE SUPERINTENDENT SHALL HEAR THE TESTIMONY OF 324
PERSONS CLAIMING TO BE ADVERSELY AFFECTED BY THE REORGANIZATION 325
PLAN, AND OF OTHERS WISHING TO COMMENT ON THE REORGANIZATION 326
PLAN. SUCH PERSONS MAY PRESENT A POSITION AND OFFER COMMENTS 329
CONCERNING THE REORGANIZATION PLAN, INCLUDING A POSITION AND 330
COMMENTS CONCERNING WHETHER THE REORGANIZATION PLAN IS FAIR AND 331
EQUITABLE TO THE MUTUAL INSURANCE COMPANY'S POLICYHOLDERS AND 332
WHETHER IT COMPLIES WITH SECTIONS 3913.25 TO 3913.37 OF THE 333
REVISED CODE.
(G) A MUTUAL INSURANCE COMPANY'S FAILURE TO PROVIDE A 336
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MEMBER OR MEMBERS WITH THE NOTICE REQUIRED BY THIS SECTION SHALL 337
NOT IMPAIR THE VALIDITY OF ANY ACTION TAKEN UNDER SECTIONS 338
3913.25 TO 3913.37 OF THE REVISED CODE, IF THE MUTUAL INSURANCE 340
COMPANY HAS COMPLIED SUBSTANTIALLY AND IN GOOD FAITH WITH ALL 341
NOTICE REQUIREMENTS. THE DETERMINATION AS TO SUCH COMPLIANCE 343
SHALL BE MADE BY THE SUPERINTENDENT. 344
Sec. 3913.28. (A) A MUTUAL INSURANCE COMPANY SHALL NOT 347
PROCEED WITH A REORGANIZATION PLAN APPROVED BY THE MUTUAL 348
INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 3913.27 OF THE 350
REVISED CODE UNTIL THE REORGANIZATION PLAN HAS BEEN REVIEWED BY, 352
AND HAS RECEIVED THE APPROVAL OF, THE SUPERINTENDENT OF 353
INSURANCE, AND THE ARTICLES OF INCORPORATION FOR THE MUTUAL 354
INSURANCE HOLDING COMPANY AND THE REORGANIZED STOCK COMPANY, AND, 355
IF APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY, HAVE BEEN 356
EXAMINED AND APPROVED BY THE ATTORNEY GENERAL IN ACCORDANCE WITH 359
THIS SECTION.
(B) THE SUPERINTENDENT SHALL APPROVE A REORGANIZATION PLAN 362
IF, UPON REVIEW, THE SUPERINTENDENT FINDS ALL OF THE FOLLOWING: 363
(1) THE ADOPTION, APPROVAL, AND CONTENTS OF THE 365
REORGANIZATION PLAN COMPLY WITH SECTIONS 3913.25 TO 3913.37 OF 366
THE REVISED CODE; 368
(2) THE MUTUAL INSURANCE COMPANY HAS PROPERLY FILED ALL 370
DOCUMENTS, FORMS, AND OTHER INFORMATION REQUIRED BY DIVISION (G) 372
OF SECTION 3913.26 OF THE REVISED CODE; 374
(3) THE REORGANIZATION PLAN IS FAIR AND EQUITABLE TO THE 376
MUTUAL INSURANCE COMPANY'S POLICYHOLDERS. 377
(C) THE SUPERINTENDENT MAY RETAIN QUALIFIED EXPERTS, AT 380
THE MUTUAL INSURANCE COMPANY'S EXPENSE, TO ASSIST IN REVIEWING 381
THE REORGANIZATION PLAN.
(D) THE SUPERINTENDENT SHALL APPROVE OR REJECT A 384
REORGANIZATION PLAN NOT LATER THAN SIXTY DAYS AFTER THE LATER OF 385
THE APPROVAL OF THE REORGANIZATION PLAN BY THE MUTUAL INSURANCE 386
COMPANY'S POLICYHOLDERS OR THE COMPLETION OF PUBLIC HEARINGS HELD 387
IN ACCORDANCE WITH SECTION 3913.27 OF THE REVISED CODE. THE 390
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SUPERINTENDENT MAY EXTEND THIS TIME PERIOD BY AN ADDITIONAL SIXTY 391
DAYS BY PROVIDING WRITTEN NOTICE TO THE MUTUAL INSURANCE COMPANY. 392
(E) UPON DECIDING TO APPROVE OR TO REJECT A REORGANIZATION 395
PLAN, THE SUPERINTENDENT SHALL NOTIFY THE MUTUAL INSURANCE 396
COMPANY OF THE DECISION BY REGULAR MAIL. IF THE SUPERINTENDENT 397
REJECTS A REORGANIZATION PLAN, THE SUPERINTENDENT'S NOTICE SHALL 398
DETAIL THE REASONS FOR THE REJECTION. 399
(F) A MUTUAL INSURANCE COMPANY SHALL FILE THE FOLLOWING 402
DOCUMENTS WITH THE SUPERINTENDENT WITHIN THIRTY DAYS AFTER 403
RECEIVING NOTICE FROM THE SUPERINTENDENT OF THE SUPERINTENDENT'S 404
APPROVAL OF A REORGANIZATION PLAN: 405
(1) THE MINUTES OF THE POLICYHOLDERS' MEETING AT WHICH THE 408
REORGANIZATION PLAN WAS APPROVED;
(2) THE ARTICLES OF INCORPORATION AND CODE OF REGULATIONS 410
FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE REORGANIZED 411
STOCK COMPANY, AND, IF APPLICABLE, FOR AN INTERMEDIATE HOLDING 412
COMPANY, AS ADOPTED BY THE MUTUAL INSURANCE COMPANY'S 413
POLICYHOLDERS UNDER SECTION 3913.27 OF THE REVISED CODE. 416
(G)(1) A MUTUAL INSURANCE COMPANY SHALL SUBMIT THE 419
ARTICLES OF INCORPORATION FOR THE MUTUAL INSURANCE HOLDING 420
COMPANY AND THE REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, 421
FOR AN INTERMEDIATE HOLDING COMPANY, AS ADOPTED BY THE MUTUAL 422
INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 3913.27 OF THE 424
REVISED CODE, TO THE ATTORNEY GENERAL FOR THE ATTORNEY GENERAL'S 426
EXAMINATION AND APPROVAL. IF, UPON EXAMINATION, THE ATTORNEY 427
GENERAL FINDS THAT THE ARTICLES OF INCORPORATION ARE IN 428
ACCORDANCE WITH APPLICABLE SECTIONS OF THE REVISED CODE, AND NOT 430
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THE UNITED STATES 433
AND OF THIS STATE, THE ATTORNEY GENERAL SHALL APPROVE OF THE 434
ARTICLES OF INCORPORATION. THE ATTORNEY GENERAL SHALL NOTIFY THE 435
MUTUAL INSURANCE COMPANY OF THE APPROVAL BY REGULAR MAIL. 436
(2) UPON OBTAINING THE APPROVALS OF THE SUPERINTENDENT AND 439
THE ATTORNEY GENERAL UNDER THIS SECTION, THE MUTUAL INSURANCE 440
COMPANY'S BOARD OF DIRECTORS SHALL FILE THE FOLLOWING WITH THE 441
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SECRETARY OF STATE:
(a) A CERTIFICATE OF REORGANIZATION, SIGNED BY THE 443
CHAIRPERSON OF THE BOARD, THE PRESIDENT OR A VICE-PRESIDENT, AND 444
THE SECRETARY OR AN ASSISTANT SECRETARY OF THE MUTUAL INSURANCE 445
COMPANY. THE ARTICLES OF INCORPORATION FOR THE MUTUAL INSURANCE 446
HOLDING COMPANY AND THE REORGANIZED STOCK COMPANY, AND, IF 447
APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY, AS ADOPTED BY 448
THE MUTUAL INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 449
3913.27 OF THE REVISED CODE, SHALL ACCOMPANY THE CERTIFICATE OF 452
REORGANIZATION.
(b) A STATEMENT, SIGNED BY THE CHAIRPERSON OF THE BOARD, 455
THE PRESIDENT OR A VICE-PRESIDENT, AND THE SECRETARY OR AN 456
ASSISTANT SECRETARY, OF THE MUTUAL INSURANCE COMPANY, OF THE
MANNER OF THE ADOPTION OF THE ARTICLES OF INCORPORATION FOR THE 457
MUTUAL INSURANCE HOLDING COMPANY AND THE REORGANIZED STOCK 458
COMPANY, AND, IF APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY; 460
(c) COPIES OF THE APPROVALS OBTAINED FROM THE 462
SUPERINTENDENT AND ATTORNEY GENERAL UNDER THIS SECTION. 463
(H) A REORGANIZATION PLAN SHALL BE EFFECTIVE UPON THE 466
FILING OF ALL OF THE DOCUMENTS AND STATEMENTS REQUIRED BY 467
DIVISION (G) OF THIS SECTION, OR AT SUCH LATER DATE AS THE 469
CERTIFICATE OF REORGANIZATION MAY PROVIDE. 470
(I) AFTER A REORGANIZATION PLAN TAKES EFFECT, THE 473
SUPERINTENDENT SHALL HAVE JURISDICTION OVER THE MUTUAL INSURANCE 474
HOLDING COMPANY, AND, IF APPLICABLE, OVER AN INTERMEDIATE HOLDING 475
COMPANY, IN ORDER TO ENSURE THAT THE INTERESTS OF THE MUTUAL 476
INSURANCE COMPANY'S POLICYHOLDERS ARE PROTECTED. 477
Sec. 3913.29. (A) PROPOSED AMENDMENTS TO THE ARTICLES OF 480
INCORPORATION OF A MUTUAL INSURANCE HOLDING COMPANY MAY BE 482
ADOPTED AT ANY MEMBERS' MEETING. THE BOARD OF DIRECTORS OF A 483
MUTUAL INSURANCE HOLDING COMPANY SHALL PROVIDE NOTICE OF ANY 484
MEMBERS' MEETING CONDUCTING A VOTE ON THE ADOPTION OF AN 485
AMENDMENT TO THE ARTICLES OF INCORPORATION IN A NEWSPAPER OF 486
GENERAL CIRCULATION PUBLISHED IN THE COUNTY WHERE THE COMPANY'S 487
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PRINCIPAL PLACE OF BUSINESS IS LOCATED, AT LEAST THIRTY DAYS 488
PRIOR TO THE MEMBERS' MEETING. WHERE THE AMENDMENT IS NOT 489
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THIS STATE AND OF 490
THE UNITED STATES, THE AMENDMENT MAY BE ADOPTED BY THE 493
AFFIRMATIVE VOTE OF AT LEAST THREE-FIFTHS OF THE MEMBERS PRESENT 494
AND VOTING AT THE MEETING. AFTER ADOPTING AN AMENDMENT, THE 495
BOARD OF DIRECTORS SHALL SUBMIT THE AMENDMENT WITH THE ATTORNEY 496
GENERAL FOR EXAMINATION AND APPROVAL.
(B) IF, UPON EXAMINATION, THE ATTORNEY GENERAL FINDS THAT 499
THE AMENDMENTS ADOPTED AT THE MEMBERS' MEETING ARE IN ACCORDANCE 500
WITH APPLICABLE SECTIONS OF THE REVISED CODE, AND ARE NOT 503
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THE UNITED STATES 506
AND OF THIS STATE, THE ATTORNEY GENERAL SHALL APPROVE OF THE 507
AMENDMENT TO THE ARTICLES OF INCORPORATION. 508
(C) UPON RECEIVING THE APPROVAL OF THE ATTORNEY GENERAL, 511
THE AMENDMENT AND A CERTIFICATE OF THE ATTORNEY GENERAL'S 512
APPROVAL SHALL BE FILED IN THE OFFICE OF THE SECRETARY OF STATE, 513
AND SHALL THEREUPON BE IN EFFECT. AFTER RECORDING THE AMENDMENT, 514
THE SECRETARY OF STATE SHALL DEPOSIT A COPY THEREOF WITH THE 515
SUPERINTENDENT OF INSURANCE. 516
Sec. 3913.30. (A) UPON A REORGANIZATION PLAN TAKING 519
EFFECT IN ACCORDANCE WITH SECTION 3913.28 OF THE REVISED CODE, 521
THE CORPORATE EXISTENCE OF THE MUTUAL INSURANCE COMPANY SHALL 522
CONTINUE IN THE REORGANIZED STOCK COMPANY. ON THE EFFECTIVE DATE 523
OF THE REORGANIZATION, ALL OF THE ASSETS, RIGHTS, FRANCHISES, AND 524
INTERESTS OF THE MUTUAL INSURANCE COMPANY IN AND TO EVERY SPECIES 526
OF PROPERTY, WHETHER REAL, PERSONAL, OR MIXED, AND ANY
ACCOMPANYING CHOSES IN ACTION, SHALL BE VESTED IN THE REORGANIZED 528
STOCK COMPANY, WITHOUT ANY DEED OR TRANSFER, AND THE REORGANIZED 529
STOCK COMPANY SHALL ASSUME ALL THE OBLIGATIONS AND LIABILITIES OF 530
THE MUTUAL INSURANCE COMPANY.
(B) UNLESS OTHERWISE SPECIFIED IN A REORGANIZATION PLAN, 533
THOSE PERSONS WHO ARE THE DIRECTORS AND OFFICERS OF A MUTUAL 534
INSURANCE COMPANY ON THE EFFECTIVE DATE OF THE REORGANIZATION 535
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SHALL SERVE AS THE DIRECTORS AND OFFICERS OF THE REORGANIZED 536
STOCK COMPANY UNTIL NEW DIRECTORS AND OFFICERS ARE ELECTED 537
PURSUANT TO THE REORGANIZED STOCK COMPANY'S ARTICLES OF 538
INCORPORATION AND CODE OF REGULATIONS. 539
Sec. 3913.31. ALL COSTS AND EXPENSES OF THE PROCESS OF A 541
REORGANIZATION UNDER SECTIONS 3913.25 TO 3913.37 OF THE REVISED 544
CODE SHALL BE PAID FOR OR REIMBURSED BY THE MUTUAL INSURANCE 545
COMPANY, THE REORGANIZED STOCK COMPANY, OR AN INTERMEDIATE 546
HOLDING COMPANY.
Sec. 3913.32. (A) A MUTUAL INSURANCE COMPANY MAY 549
REORGANIZE BY MERGING ITS POLICYHOLDERS' MEMBERSHIP INTERESTS 550
INTO A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING COMPANY AND 551
CONTINUING THE CORPORATE EXISTENCE OF THE MUTUAL INSURANCE 552
COMPANY AS A REORGANIZED STOCK COMPANY. A MUTUAL INSURANCE 553
COMPANY REORGANIZING UNDER THIS SECTION SHALL COMPLY WITH ALL 554
APPLICABLE PROVISIONS OF SECTIONS 3913.25 TO 3913.37 OF THE 556
REVISED CODE, AND ALL APPLICABLE LAWS OF FOREIGN JURISDICTIONS, 558
TO EFFECT THE REORGANIZATION.
(B) A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING COMPANY 561
MAY REORGANIZE BY MERGING OR CONSOLIDATING ITS MEMBERSHIP 562
INTERESTS INTO ANOTHER DOMESTIC OR FOREIGN MUTUAL INSURANCE 563
HOLDING COMPANY. A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING 564
COMPANY REORGANIZING UNDER THIS DIVISION SHALL COMPLY WITH ALL 565
APPLICABLE PROVISIONS OF SECTIONS 3913.25 TO 3913.37 OF THE 567
REVISED CODE, AND ALL APPLICABLE LAWS OF FOREIGN JURISDICTIONS, 569
TO EFFECT THE REORGANIZATION.
Sec. 3913.33. A MEMBERSHIP INTEREST IN A MUTUAL INSURANCE 571
HOLDING COMPANY IS NOT A SECURITY UNDER THE LAWS OF THIS STATE. 572
NO MEMBER OF A MUTUAL INSURANCE HOLDING COMPANY MAY TRANSFER 573
MEMBERSHIP IN THE MUTUAL INSURANCE HOLDING COMPANY OR ANY RIGHT 574
ARISING FROM MEMBERSHIP. 575
Sec. 3913.34. (A) SECTIONS 3913.11 TO 3913.13 AND 3913.20 578
TO 3913.23 OF THE REVISED CODE SHALL APPLY TO A MUTUAL INSURANCE 581
HOLDING COMPANY AS IF THE MUTUAL INSURANCE HOLDING COMPANY WERE A 582
13
DOMESTIC MUTUAL INSURANCE COMPANY. THE MEMBERS OF THE MUTUAL 583
INSURANCE HOLDING COMPANY ARE DEEMED TO BE MEMBERS OF A DOMESTIC 584
MUTUAL INSURANCE COMPANY FOR ALL PURPOSES OF SUCH SECTIONS. 585
(B) A REORGANIZATION OF A DOMESTIC MUTUAL LIFE INSURANCE 588
COMPANY SUBJECT TO SECTIONS 3913.25 TO 3913.37 OF THE REVISED 591
CODE ALSO IS SUBJECT TO SECTIONS 3907.09 TO 3907.11 OF THE 593
REVISED CODE, IF APPLICABLE, BUT IS NOT SUBJECT TO SECTIONS 595
3901.32 TO 3901.323 OF THE REVISED CODE. 597
(C) NOTWITHSTANDING DIVISION (B) OF THIS SECTION, FOR A 601
PERIOD OF FIVE YEARS FOLLOWING THE EFFECTIVE DATE OF A
REORGANIZATION UNDER SECTIONS 3913.25 TO 3913.37 OF THE REVISED 604
CODE, NO PERSON SHALL ACQUIRE CONTROL OF A REORGANIZED STOCK 605
COMPANY WITHOUT COMPLIANCE WITH SECTIONS 3901.32 TO 3901.323 OF 606
THE REVISED CODE. FOR PURPOSES OF THIS DIVISION, "CONTROL" HAS 609
THE SAME MEANING AS IN DIVISION (B) OF SECTION 3901.32 OF THE 611
REVISED CODE, EXCEPT THAT CONTROL IS PRESUMED TO EXIST IF ANY 613
PERSON, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS, HOLDS WITH THE 614
POWER TO VOTE, OR HOLDS PROXIES REPRESENTING FIVE PER CENT OR 615
MORE OF THE VOTING SECURITIES OF ANY OTHER PERSON. 616
(D) A MUTUAL INSURANCE HOLDING COMPANY, AND AN 619
INTERMEDIATE HOLDING COMPANY, IF ANY, ARE DEEMED TO BE INSURERS 620
SUBJECT TO SECTIONS 3901.07, 3901.071, AND 3901.48 OF THE REVISED 622
CODE. 623
Sec. 3913.35. (A) A MUTUAL INSURANCE HOLDING COMPANY, 626
AND, IF APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, ARE DEEMED 627
TO BE INSURERS SUBJECT TO SECTIONS 3903.01 TO 3903.76 OF THE 629
REVISED CODE. A MUTUAL INSURANCE HOLDING COMPANY AND THE 631
INTERMEDIATE HOLDING COMPANY ACCORDINGLY ARE DEEMED TO BE PARTIES 632
TO ANY PROCEEDING UNDER SECTIONS 3903.01 TO 3903.76 OF THE 634
REVISED CODE INVOLVING AN INSURANCE COMPANY THAT IS A SUBSIDIARY 636
OF THE MUTUAL INSURANCE HOLDING COMPANY OR OF THE INTERMEDIATE 637
HOLDING COMPANY AS A RESULT OF A REORGANIZATION UNDER SECTIONS 638
3913.25 TO 3913.37 OF THE REVISED CODE. 640
(B) IN ANY PROCEEDING UNDER SECTIONS 3903.01 TO 3903.76 OF 643
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THE REVISED CODE INVOLVING A REORGANIZED STOCK COMPANY, THE 646
ASSETS OF THE MUTUAL INSURANCE HOLDING COMPANY, AND, IF 647
APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, ARE DEEMED TO BE 648
ASSETS OF THE REORGANIZED STOCK COMPANY FOR PURPOSES OF 649
SATISFYING CLAIMS OF THE POLICYHOLDERS OF THE REORGANIZED STOCK 650
COMPANY.
(C) A MUTUAL INSURANCE HOLDING COMPANY, AND, IF 653
APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, SHALL NOT BE 654
DISSOLVED OR LIQUIDATED WITHOUT COMPLIANCE WITH THE PROVISIONS OF 655
CHAPTER 3903. OF THE REVISED CODE. SUCH COMPANIES ARE DEEMED TO 658
BE DOMESTIC INSURANCE COMPANIES FOR PURPOSES OF A DISSOLUTION OR 659
LIQUIDATION UNDER CHAPTER 3903. OF THE REVISED CODE. 662
Sec. 3913.36. ANY ACTION CHALLENGING THE VALIDITY OF, OR 664
ARISING OUT OF, ACTIONS TAKEN OR PROPOSED TO BE TAKEN IN 665
CONNECTION WITH A REORGANIZATION UNDER SECTIONS 3913.25 TO 666
3913.37 OF THE REVISED CODE SHALL BE COMMENCED NO LATER THAN 669
THIRTY DAYS AFTER THE EFFECTIVE DATE OF THE REORGANIZATION. 670
Sec. 3913.37. THE SUPERINTENDENT OF INSURANCE MAY ADOPT 672
RULES IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE TO 676
CARRY OUT THE PURPOSES OF SECTIONS 3913.25 TO 3913.37 OF THE 678
REVISED CODE. 679
Sec. 3913.31 3913.40. (A) Any insurer that is organized 688
under the laws of another state and is admitted to transact the 690
business of insurance in this state may become a domestic insurer 691
by complying with all of the requirements of law relative to the 692
organization and licensing of a domestic insurer of the same type 693
and by designating its principal place of business at a place in 694
this state. Such a domestic insurer shall be issued like 695
certificates and licenses to transact business in this state, is 696
subject to the jurisdiction of this state, and shall be 697
recognized as an insurer formed under the laws of this state as 698
of the date of its original incorporation in its original 699
domiciliary state. The superintendent of insurance shall approve 700
any proposed transfer of domicile under this division unless he 701
15
determines that the transfer is not in the interest of 702
policyholders of this state. 703
(B) Any domestic insurer, upon the approval of the 705
superintendent, may transfer its domicile to any other state in 706
which it is admitted to transact the business of insurance. Upon 707
such a transfer, the insurer shall cease to be a domestic 708
insurer, and shall be admitted to this state if qualified as a 709
foreign insurer. The superintendent shall approve any proposed 710
transfer of domicile under this division unless he determines 711
that the transfer is not in the interest of policyholders of this 712
state. 713
(C)(1) With respect to any insurer that is licensed to 715
transact the business of insurance in this state and that 716
transfers its domicile to this or any other state by merger, 717
consolidation, or any other lawful method, both of the following 718
apply: 719
(a) The certificate of authority, agents appointments and 721
licenses, rates, and other items as allowed by the superintendent 722
that are in existence at the time of the transfer shall continue 723
in effect upon the transfer if the insurer remains qualified to 724
transact the business of insurance in this state. 725
(b) All outstanding policies shall remain in effect and 727
need not be endorsed as to the new name of the company or its new 728
location unless so ordered by the superintendent. 729
(2) Every transferring insurer as described in division 731
(C)(1) of this section shall file new policy forms with the 732
superintendent on or before the effective date of the transfer, 733
but may use existing policy forms with appropriate endorsements 734
if allowed by, and under such conditions as are approved by, the 735
superintendent. Every such insurer shall notify the 736
superintendent of the details of the proposed transfer, and shall 737
file promptly any resulting amendments to corporate documents 738
filed or required to be filed with the superintendent. 739
(D) The superintendent, in accordance with Chapter 119. of 741
16
the Revised Code, may adopt rules to carry out the purposes of 742
this section. 743
Section 2. That existing sections 3901.043 and 3913.31 of 745
the Revised Code are hereby repealed. 746