As Passed by the Senate 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-REID- 9
SCHULER-STAPLETON-TAYLOR-TERWILLEGER-TIBERI-VAN VYVEN- 10
WACHTMANN-YOUNG-GRENDELL-CORBIN-HARRIS-HOTTINGER-JAMES- 11
O'BRIEN-OLMAN-SENATORS CUPP-GILLMOR-DIX-WATTS-WHITE- 12
GARDNER-NEIN-RAY-SUHADOLNIK-DRAKE-FINAN 13
15
A B I L L
To amend section 3901.043; to amend, for the purpose 17
of adopting a new section number as indicated in 19
parentheses, section 3913.31 (3913.40); and to 20
enact new section 3913.31 and sections 3913.25, 21
3913.26, 3913.27, 3913.28, 3913.29, 3913.30, 22
3913.32, 3913.33, 3913.34, 3913.35, 3913.36, 23
3913.37, and 3913.38 of the Revised Code to
permit a mutual insurance company to raise 24
capital by reorganizing as a stock insurance 25
company that is a majority-owned subsidiary of a 26
mutual insurance holding company. 28
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 30
Section 1. That section 3901.043 be amended, section 32
3913.31 (3913.40) be amended for the purpose of adopting a new 34
section number as indicated in parentheses, and new section 35
3913.31 and sections 3913.25, 3913.26, 3913.27, 3913.28, 3913.29, 36
3913.30, 3913.32, 3913.33, 3913.34, 3913.35, 3913.36, 3913.37, 37
and 3913.38 of the Revised Code be enacted to read as follows: 38
Sec. 3901.043. The superintendent of insurance may adopt 47
rules in accordance with Chapter 119. of the Revised Code to 48
establish reasonable fees for any service or transaction 49
2
performed by the department of insurance pursuant to section 50
1738.04, 1742.03, 3901.321, 3901.341, 3907.09, 3907.10, 3907.11,
3907.12, 3911.011, 3913.31 3913.40, 3915.14, 3917.06, 3918.07, 52
3923.02, 3935.04, 3937.03, 3953.28, 3957.12, or 3957.13 of the 53
Revised Code or any provision in sections 3913.01 to 3913.23 or 54
in Chapter 3905. of the Revised Code, if no fee is otherwise 55
provided under Title XVII or XXXIX of the Revised Code for such 56
service or transaction. Any fee collected pursuant to those 57
rules shall be paid into the state treasury to the credit of the 58
department of insurance operating fund.
Sec. 3913.25. AS USED IN SECTIONS 3913.25 TO 3913.38 OF 60
THE REVISED CODE: 62
(A) "INTERMEDIATE HOLDING COMPANY" MEANS A STOCK 65
CORPORATION THAT OWNS ALL OF THE SHARES OF VOTING STOCK OF ONE OR 66
MORE REORGANIZED STOCK COMPANIES AFTER A REORGANIZATION UNDER 67
SECTIONS 3913.25 TO 3913.38 OF THE REVISED CODE. "INTERMEDIATE 69
HOLDING COMPANY" ALSO MEANS A STOCK CORPORATION THAT IS THE 70
PARENT OR SUBSIDIARY OF ANOTHER INTERMEDIATE HOLDING COMPANY. 71
(B) "MUTUAL INSURANCE COMPANY" MEANS A DOMESTIC OR FOREIGN 74
MUTUAL LIFE INSURANCE COMPANY OR A DOMESTIC OR FOREIGN MUTUAL 75
INSURANCE COMPANY OTHER THAN A MUTUAL LIFE INSURANCE COMPANY. 76
(C) "MUTUAL INSURANCE HOLDING COMPANY" MEANS A DOMESTIC 79
MUTUAL INSURANCE HOLDING COMPANY INCORPORATED PURSUANT TO A 80
REORGANIZATION PLAN ADOPTED UNDER SECTIONS 3913.26 TO 3913.28 OF 81
THE REVISED CODE, WHICH COMPANY IS THE PARENT COMPANY OF A 84
REORGANIZED STOCK COMPANY OR OF AN INTERMEDIATE HOLDING COMPANY. 85
(D) "POLICYHOLDER" HAS THE SAME MEANING AS IN SECTION 88
3913.10 OF THE REVISED CODE WHEN USED WITH RESPECT TO A LIFE 91
INSURANCE COMPANY, AND HAS THE SAME MEANING AS IN SECTION 3913.20 92
OF THE REVISED CODE WHEN USED WITH RESPECT TO AN INSURANCE 94
COMPANY OTHER THAN A LIFE INSURANCE COMPANY.
(E) "REORGANIZATION PLAN" MEANS A REORGANIZATION PLAN 97
ADOPTED BY A MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS IN 98
ACCORDANCE WITH SECTION 3913.26 OF THE REVISED CODE. 100
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(F) "REORGANIZED STOCK COMPANY" MEANS THE DOMESTIC OR 103
FOREIGN STOCK INSURANCE COMPANY RESULTING FROM A DOMESTIC OR 104
FOREIGN MUTUAL INSURANCE COMPANY'S REORGANIZATION UNDER SECTIONS 105
3913.25 TO 3913.38 OF THE REVISED CODE. 107
(G) "VOTING STOCK" MEANS SECURITIES OF ANY CLASS OR ANY 110
OWNERSHIP INTEREST HAVING VOTING POWER FOR THE ELECTION OF 111
DIRECTORS, TRUSTEES, OR MANAGEMENT OF A PERSON, OTHER THAN 112
SECURITIES HAVING VOTING POWER ONLY AS A RESULT OF THE OCCURRENCE 113
OF A CONTINGENCY.
Sec. 3913.26. (A) A MUTUAL INSURANCE COMPANY, BY ITSELF 116
OR TOGETHER WITH ONE OR MORE OTHER MUTUAL INSURANCE COMPANIES 117
ACTING PURSUANT TO A JOINT REORGANIZATION PLAN, MAY REORGANIZE IN 118
ACCORDANCE WITH THE REQUIREMENTS OF SECTIONS 3913.25 TO 3913.38 119
OF THE REVISED CODE. 121
(B)(1) A MUTUAL INSURANCE COMPANY MAY ADOPT A 124
REORGANIZATION PLAN THAT IS CONSISTENT WITH THE REQUIREMENTS OF 125
SECTIONS 3913.25 TO 3913.38 OF THE REVISED CODE. SUCH A 127
REORGANIZATION PLAN MAY ONLY BE ADOPTED BY THE AFFIRMATIVE VOTE 128
OF NOT LESS THAN TWO-THIRDS OF THE MUTUAL INSURANCE COMPANY'S 129
BOARD OF DIRECTORS.
(2) AT ANY TIME PRIOR TO THE MAILING TO POLICYHOLDERS OF 131
THE NOTICE PURSUANT TO DIVISION (B) OF SECTION 3913.27 OF THE 134
REVISED CODE, WHICH NOTICE INCLUDES A SUMMARY OF THE 136
REORGANIZATION PLAN, A MUTUAL INSURANCE COMPANY'S BOARD OF 137
DIRECTORS MAY AMEND THE REORGANIZATION PLAN BY THE AFFIRMATIVE 138
VOTE OF NOT LESS THAN TWO-THIRDS OF THE BOARD OF DIRECTORS. AT 140
ANY TIME BEFORE A REORGANIZATION PLAN HAS RECEIVED THE APPROVAL 141
OF THE SUPERINTENDENT OF INSURANCE UNDER SECTION 3913.28 OF THE 142
REVISED CODE, A MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS MAY 144
WITHDRAW THE REORGANIZATION PLAN BY THE AFFIRMATIVE VOTE OF NOT 145
LESS THAN TWO-THIRDS OF THE BOARD OF DIRECTORS. 146
(C) A REORGANIZATION PLAN SHALL PROVIDE FOR THE 149
INCORPORATION OF A MUTUAL INSURANCE HOLDING COMPANY, AND SHALL 150
PROVIDE FOR THE CONTINUATION OF THE CORPORATE EXISTENCE OF THE 151
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MUTUAL INSURANCE COMPANY AS A STOCK INSURANCE COMPANY. 152
(D) A REORGANIZATION PLAN SHALL PROVIDE THAT ALL OF THE 155
INITIAL SHARES OF VOTING STOCK OF A REORGANIZED STOCK COMPANY 156
SHALL BE ISSUED TO ITS PARENT MUTUAL INSURANCE HOLDING COMPANY OR 157
TO AN INTERMEDIATE HOLDING COMPANY. NOTHING IN SECTIONS 3913.25 158
TO 3913.38 OF THE REVISED CODE, HOWEVER, SHALL BE CONSTRUED AS 161
LIMITING OR RESTRICTING THE AUTHORITY OF A REORGANIZED STOCK 162
COMPANY OR OF AN INTERMEDIATE HOLDING COMPANY TO ISSUE SECURITIES 163
OTHER THAN VOTING STOCK.
(E)(1) A REORGANIZATION PLAN SHALL PROVIDE THAT THE 166
MEMBERSHIP INTERESTS OF THE POLICYHOLDERS OF A MUTUAL INSURANCE 167
COMPANY SHALL BECOME MEMBERSHIP INTERESTS IN THE MUTUAL INSURANCE 168
HOLDING COMPANY, AND THAT CONCURRENTLY THE POLICYHOLDERS' 169
MEMBERSHIP INTERESTS IN THE MUTUAL INSURANCE COMPANY SHALL BE 170
EXTINGUISHED.
(2) A REORGANIZATION PLAN SHALL PROVIDE THAT THE 172
POLICYHOLDERS OF THE REORGANIZED STOCK COMPANY SHALL BECOME 173
MEMBERS OF THE MUTUAL INSURANCE HOLDING COMPANY IN ACCORDANCE 174
WITH THE ARTICLES OF INCORPORATION AND THE CODE OF REGULATIONS OF 176
THE MUTUAL INSURANCE HOLDING COMPANY.
(F) A REORGANIZATION PLAN SHALL PROVIDE THAT THE MUTUAL 179
INSURANCE HOLDING COMPANY SHALL AT ALL TIMES OWN A MAJORITY OF 180
THE VOTING STOCK OF THE REORGANIZED STOCK COMPANY. 181
ALTERNATIVELY, A REORGANIZATION PLAN SHALL PROVIDE THAT THE 182
MUTUAL INSURANCE HOLDING COMPANY SHALL AT ALL TIMES OWN A 183
MAJORITY OF THE VOTING STOCK OF AN INTERMEDIATE HOLDING COMPANY, 184
WHICH INTERMEDIATE HOLDING COMPANY SHALL AT ALL TIMES OWN ALL OF 185
THE VOTING STOCK OF THE REORGANIZED STOCK COMPANY. THE SHARES OF 187
VOTING STOCK REQUIRED TO BE OWNED BY THE MUTUAL INSURANCE HOLDING 188
COMPANY, AND BY THE INTERMEDIATE HOLDING COMPANY, IF ANY, SHALL 189
NOT BE PLEDGED, HYPOTHECATED, OR IN ANY WAY ENCUMBERED WITH 190
REGARD TO ANY OBLIGATION, GUARANTY, OR COMMITMENT UNDERTAKEN BY 191
OR ON BEHALF OF THE MUTUAL INSURANCE HOLDING COMPANY, OR THE 192
INTERMEDIATE HOLDING COMPANY, IF ANY. 193
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(G) THE BOARD OF DIRECTORS OF A MUTUAL INSURANCE COMPANY 196
SHALL FILE ALL OF THE FOLLOWING WITH THE SUPERINTENDENT WITHIN 197
NINETY DAYS AFTER ADOPTING A REORGANIZATION PLAN: 198
(1) THE REORGANIZATION PLAN; 200
(2) THE FORMS OF NOTICES TO BE PROVIDED TO POLICYHOLDERS 202
UNDER DIVISION (B) OF SECTION 3913.27 OF THE REVISED CODE; 205
(3) THE FORM OF PROXY, IF ANY, TO BE SOLICITED FROM 207
POLICYHOLDERS; 208
(4) THE PROPOSED ARTICLES OF INCORPORATION AND CODE OF 210
REGULATIONS FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE 211
REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, FOR AN 212
INTERMEDIATE HOLDING COMPANY. THE ARTICLES OF INCORPORATION AND 213
CODE OF REGULATIONS SHALL BE SIGNED BY THE CHAIRPERSON OF THE 214
BOARD, THE PRESIDENT OR VICE-PRESIDENT, AND BY THE SECRETARY OR 215
AN ASSISTANT SECRETARY, OF THE MUTUAL INSURANCE COMPANY. 216
(5) SUCH OTHER DOCUMENTS OR INFORMATION AS THE 218
SUPERINTENDENT MAY REQUIRE. 219
(H) NOTHING IN SECTIONS 3913.25 TO 3913.38 OF THE REVISED 223
CODE SHALL LIMIT OR RESTRICT AN INTERMEDIATE HOLDING COMPANY'S 225
AUTHORITY UNDER SECTION 1701.13 OF THE REVISED CODE TO FORM OR 227
ACQUIRE THE CONTROL OF OTHER CORPORATIONS, WHETHER DOMESTIC OR 228
FOREIGN, PROFIT OR NONPROFIT. 229
Sec. 3913.27. (A) A REORGANIZATION PLAN ADOPTED BY A 232
MUTUAL INSURANCE COMPANY'S BOARD OF DIRECTORS PURSUANT TO SECTION 233
3913.26 OF THE REVISED CODE SHALL BE VOTED UPON BY A MUTUAL 236
INSURANCE COMPANY'S POLICYHOLDERS AT A POLICYHOLDERS' MEETING. A 237
POLICYHOLDER IS ENTITLED TO CAST ONLY ONE VOTE, IN PERSON OR BY 238
PROXY, ON THE REORGANIZATION PLAN REGARDLESS OF THE NUMBER OF 239
POLICIES OR CONTRACTS THAT THE POLICYHOLDER MAY OWN OR HOLD. 240
ONLY PROXIES SPECIFICALLY RELATED TO THE REORGANIZATION PLAN 242
SHALL BE USED IN DETERMINING WHETHER THE REORGANIZATION PLAN IS 243
APPROVED PURSUANT TO DIVISION (C) OF THIS SECTION. 244
(B) ALL POLICYHOLDERS SHALL BE GIVEN NOTICE OF THE 247
POLICYHOLDERS' MEETING TO VOTE UPON THE REORGANIZATION PLAN AT 248
6
LEAST THIRTY DAYS PRIOR TO THE DATE FIXED FOR THE POLICYHOLDERS' 249
MEETING. NOTICE OF THE TIME AND PLACE OF SUCH MEETING SHALL BE 250
SENT BY MAIL TO EACH POLICYHOLDER AT THE POLICYHOLDER'S POST 251
OFFICE ADDRESS AS IT APPEARS ON THE BOOKS AND RECORDS OF THE 252
COMPANY. THE NOTICE SHALL INCLUDE A SUMMARY OF THE 254
REORGANIZATION PLAN ADOPTED BY THE BOARD OF DIRECTORS, INCLUDING 256
AN ANALYSIS OF THE MATERIAL FINANCIAL ASPECTS AND POTENTIAL FOR 257
DILUTION OF POLICYHOLDERS' INTERESTS IN THE MUTUAL INSURANCE 258
COMPANY UNDER THE REORGANIZATION PLAN, A UNIFORM BALLOT FOR 259
VOTING ON THE QUESTION OF THE REORGANIZATION PLAN, AND A 260
STATEMENT INFORMING THE POLICYHOLDERS THAT THE SUPERINTENDENT OF 261
INSURANCE MAY FIX A TIME AND PLACE FOR A PUBLIC HEARING ON THE 262
REORGANIZATION PLAN, TO BE HELD WITHIN THIRTY DAYS AFTER THE 263
SUPERINTENDENT'S RECEIPT OF WRITTEN NOTICE FROM THE BOARD OF 264
DIRECTORS OF THE POLICYHOLDERS' APPROVAL OF THE REORGANIZATION 265
PLAN. 266
(C) A REORGANIZATION PLAN SHALL BE APPROVED UPON RECEIVING 269
THE AFFIRMATIVE VOTE OF AT LEAST A MAJORITY OF THE VOTES CAST BY 270
POLICYHOLDERS.
(D)(1) IF A REORGANIZATION PLAN IS APPROVED AT THE 273
POLICYHOLDERS' MEETING, THE BOARD OF DIRECTORS OF A MUTUAL 274
INSURANCE COMPANY SHALL PROVIDE THE SUPERINTENDENT WITH WRITTEN 275
NOTICE OF THAT APPROVAL WITHIN TEN DAYS AFTER THE POLICYHOLDERS' 276
MEETING. 277
(2) THE SUPERINTENDENT MAY, WITHIN TEN DAYS AFTER 279
RECEIVING THE NOTICE FROM THE BOARD OF DIRECTORS, PROVIDE WRITTEN 281
NOTICE TO THE MUTUAL INSURANCE COMPANY OF THE SUPERINTENDENT'S 282
INTENT TO CONDUCT ONE OR MORE PUBLIC HEARINGS ON THE 283
REORGANIZATION PLAN. AT A MINIMUM, THE SUPERINTENDENT'S NOTICE 284
TO THE MUTUAL INSURANCE COMPANY SHALL INCLUDE A TIME AND A PLACE 285
FOR THE FIRST PUBLIC HEARING, WHICH SHALL BE HELD WITHIN THIRTY 286
DAYS AFTER THE SUPERINTENDENT'S RECEIPT OF THE NOTICE FROM THE 287
BOARD OF DIRECTORS.
(3) WITHIN TEN DAYS AFTER THE MUTUAL INSURANCE COMPANY'S 289
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RECEIPT OF A NOTICE FROM THE SUPERINTENDENT OF THE 290
SUPERINTENDENT'S INTENT TO CONDUCT ONE OR MORE PUBLIC HEARINGS ON 292
THE REORGANIZATION PLAN, IF SUCH NOTICE IS PROVIDED, THE MUTUAL 293
INSURANCE COMPANY SHALL PROVIDE NOTICE OF THE TIME AND PLACE OF 294
SUCH HEARING BY CAUSING THIS INFORMATION TO BE PUBLISHED ONCE 295
EACH WEEK FOR TWO CONSECUTIVE WEEKS IN A NEWSPAPER PUBLISHED AND 296
OF THE LARGEST CIRCULATION IN THE COUNTIES OF CUYAHOGA, FRANKLIN, 297
HAMILTON, AND LUCAS, IN THE COUNTY IN THIS STATE IN WHICH THE 299
MUTUAL INSURANCE COMPANY HAS ITS PRINCIPAL OFFICE, AND IN THE 300
NEWSPAPER OF THE LARGEST CIRCULATION IN THE STATE CAPITAL OF EACH 301
STATE OF THE UNITED STATES IN WHICH THE COMPANY MAINTAINS AN 302
OFFICE OR AGENCY FOR THE SOLICITATION OF INSURANCE. 303
(E) THE PROPOSED ARTICLES OF INCORPORATION AND CODE OF 306
REGULATIONS FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE 307
REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, FOR AN 308
INTERMEDIATE HOLDING COMPANY, AS FILED WITH THE SUPERINTENDENT 309
PURSUANT TO DIVISION (G)(4) OF SECTION 3913.26 OF THE REVISED 312
CODE, SHALL ALSO BE VOTED UPON BY THE MUTUAL INSURANCE COMPANY'S 313
POLICYHOLDERS AT THE POLICYHOLDERS' MEETING HELD PURSUANT TO THIS 314
SECTION. THE ARTICLES OF INCORPORATION AND CODE OF REGULATIONS 315
SHALL BE ADOPTED UPON RECEIVING THE AFFIRMATIVE VOTE OF AT LEAST 316
A MAJORITY OF THE VOTES CAST BY POLICYHOLDERS. 317
(F) AT ALL PUBLIC HEARINGS CONDUCTED BY THE SUPERINTENDENT 320
PURSUANT TO THE SUPERINTENDENT'S AUTHORITY UNDER DIVISION (D)(2) 322
OF THIS SECTION, THE SUPERINTENDENT MAY SUMMON AND COMPEL THE 323
ATTENDANCE AND TESTIMONY OF WITNESSES AND THE PRODUCTION OF BOOKS 324
AND PAPERS. THE SUPERINTENDENT SHALL HEAR THE TESTIMONY OF 326
PERSONS CLAIMING TO BE ADVERSELY AFFECTED BY THE REORGANIZATION 327
PLAN, AND OF OTHERS WISHING TO COMMENT ON THE REORGANIZATION 328
PLAN. SUCH PERSONS MAY PRESENT A POSITION AND OFFER COMMENTS 331
CONCERNING THE REORGANIZATION PLAN, INCLUDING A POSITION AND 332
COMMENTS CONCERNING WHETHER THE REORGANIZATION PLAN IS FAIR AND 333
EQUITABLE TO THE MUTUAL INSURANCE COMPANY'S POLICYHOLDERS AND 334
WHETHER IT COMPLIES WITH SECTIONS 3913.25 TO 3913.38 OF THE 335
8
REVISED CODE.
(G) A MUTUAL INSURANCE COMPANY'S FAILURE TO PROVIDE A 338
MEMBER OR MEMBERS WITH THE NOTICE REQUIRED BY THIS SECTION SHALL 339
NOT IMPAIR THE VALIDITY OF ANY ACTION TAKEN UNDER SECTIONS 340
3913.25 TO 3913.38 OF THE REVISED CODE, IF THE MUTUAL INSURANCE 342
COMPANY HAS COMPLIED SUBSTANTIALLY AND IN GOOD FAITH WITH ALL 343
NOTICE REQUIREMENTS. THE DETERMINATION AS TO SUCH COMPLIANCE 345
SHALL BE MADE BY THE SUPERINTENDENT. 346
Sec. 3913.28. (A) A MUTUAL INSURANCE COMPANY SHALL NOT 349
PROCEED WITH A REORGANIZATION PLAN APPROVED BY THE MUTUAL 350
INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 3913.27 OF THE 352
REVISED CODE UNTIL THE REORGANIZATION PLAN HAS BEEN REVIEWED BY, 354
AND HAS RECEIVED THE APPROVAL OF, THE SUPERINTENDENT OF 355
INSURANCE, AND THE ARTICLES OF INCORPORATION FOR THE MUTUAL 356
INSURANCE HOLDING COMPANY AND THE REORGANIZED STOCK COMPANY, AND, 357
IF APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY, HAVE BEEN 358
EXAMINED AND APPROVED BY THE ATTORNEY GENERAL IN ACCORDANCE WITH 361
THIS SECTION.
(B) THE SUPERINTENDENT SHALL APPROVE A REORGANIZATION PLAN 364
IF, UPON REVIEW, THE SUPERINTENDENT FINDS ALL OF THE FOLLOWING: 365
(1) THE ADOPTION, APPROVAL, AND CONTENTS OF THE 367
REORGANIZATION PLAN COMPLY WITH SECTIONS 3913.25 TO 3913.38 OF 368
THE REVISED CODE; 370
(2) THE MUTUAL INSURANCE COMPANY HAS PROPERLY FILED ALL 372
DOCUMENTS, FORMS, AND OTHER INFORMATION REQUIRED BY DIVISION (G) 374
OF SECTION 3913.26 OF THE REVISED CODE; 376
(3) THE REORGANIZATION PLAN IS FAIR AND EQUITABLE TO THE 378
MUTUAL INSURANCE COMPANY'S POLICYHOLDERS. 379
(C) THE SUPERINTENDENT MAY RETAIN QUALIFIED EXPERTS, AT 382
THE MUTUAL INSURANCE COMPANY'S EXPENSE, TO ASSIST IN REVIEWING 383
THE REORGANIZATION PLAN.
(D) THE SUPERINTENDENT SHALL APPROVE OR REJECT A 386
REORGANIZATION PLAN NOT LATER THAN SIXTY DAYS AFTER THE LATER OF 387
THE APPROVAL OF THE REORGANIZATION PLAN BY THE MUTUAL INSURANCE 388
9
COMPANY'S POLICYHOLDERS OR THE COMPLETION OF PUBLIC HEARINGS HELD 389
IN ACCORDANCE WITH SECTION 3913.27 OF THE REVISED CODE. THE 392
SUPERINTENDENT MAY EXTEND THIS TIME PERIOD BY AN ADDITIONAL SIXTY 393
DAYS BY PROVIDING WRITTEN NOTICE TO THE MUTUAL INSURANCE COMPANY. 394
(E) UPON DECIDING TO APPROVE OR TO REJECT A REORGANIZATION 397
PLAN, THE SUPERINTENDENT SHALL NOTIFY THE MUTUAL INSURANCE 398
COMPANY OF THE DECISION BY REGULAR MAIL. IF THE SUPERINTENDENT 399
REJECTS A REORGANIZATION PLAN, THE SUPERINTENDENT'S NOTICE SHALL 400
DETAIL THE REASONS FOR THE REJECTION. 401
(F) A MUTUAL INSURANCE COMPANY SHALL FILE THE FOLLOWING 404
DOCUMENTS WITH THE SUPERINTENDENT WITHIN THIRTY DAYS AFTER 405
RECEIVING NOTICE FROM THE SUPERINTENDENT OF THE SUPERINTENDENT'S 406
APPROVAL OF A REORGANIZATION PLAN: 407
(1) THE MINUTES OF THE POLICYHOLDERS' MEETING AT WHICH THE 410
REORGANIZATION PLAN WAS APPROVED;
(2) THE ARTICLES OF INCORPORATION AND CODE OF REGULATIONS 412
FOR THE MUTUAL INSURANCE HOLDING COMPANY AND THE REORGANIZED 413
STOCK COMPANY, AND, IF APPLICABLE, FOR AN INTERMEDIATE HOLDING 414
COMPANY, AS ADOPTED BY THE MUTUAL INSURANCE COMPANY'S 415
POLICYHOLDERS UNDER SECTION 3913.27 OF THE REVISED CODE. 418
(G)(1) A MUTUAL INSURANCE COMPANY SHALL SUBMIT THE 421
ARTICLES OF INCORPORATION FOR THE MUTUAL INSURANCE HOLDING 422
COMPANY AND THE REORGANIZED STOCK COMPANY, AND, IF APPLICABLE, 423
FOR AN INTERMEDIATE HOLDING COMPANY, AS ADOPTED BY THE MUTUAL 424
INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 3913.27 OF THE 426
REVISED CODE, TO THE ATTORNEY GENERAL FOR THE ATTORNEY GENERAL'S 428
EXAMINATION AND APPROVAL. IF, UPON EXAMINATION, THE ATTORNEY 429
GENERAL FINDS THAT THE ARTICLES OF INCORPORATION ARE IN 430
ACCORDANCE WITH APPLICABLE SECTIONS OF THE REVISED CODE, AND NOT 432
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THE UNITED STATES 435
AND OF THIS STATE, THE ATTORNEY GENERAL SHALL APPROVE OF THE 436
ARTICLES OF INCORPORATION. THE ATTORNEY GENERAL SHALL NOTIFY THE 437
MUTUAL INSURANCE COMPANY OF THE APPROVAL BY REGULAR MAIL. 438
(2) UPON OBTAINING THE APPROVALS OF THE SUPERINTENDENT AND 441
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THE ATTORNEY GENERAL UNDER THIS SECTION, THE MUTUAL INSURANCE 442
COMPANY'S BOARD OF DIRECTORS SHALL FILE THE FOLLOWING WITH THE 443
SECRETARY OF STATE:
(a) A CERTIFICATE OF REORGANIZATION, SIGNED BY THE 445
CHAIRPERSON OF THE BOARD, THE PRESIDENT OR A VICE-PRESIDENT, AND 446
THE SECRETARY OR AN ASSISTANT SECRETARY OF THE MUTUAL INSURANCE 447
COMPANY. THE ARTICLES OF INCORPORATION FOR THE MUTUAL INSURANCE 448
HOLDING COMPANY AND THE REORGANIZED STOCK COMPANY, AND, IF 449
APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY, AS ADOPTED BY 450
THE MUTUAL INSURANCE COMPANY'S POLICYHOLDERS UNDER SECTION 451
3913.27 OF THE REVISED CODE, SHALL ACCOMPANY THE CERTIFICATE OF 454
REORGANIZATION.
(b) A STATEMENT, SIGNED BY THE CHAIRPERSON OF THE BOARD, 457
THE PRESIDENT OR A VICE-PRESIDENT, AND THE SECRETARY OR AN 458
ASSISTANT SECRETARY, OF THE MUTUAL INSURANCE COMPANY, OF THE
MANNER OF THE ADOPTION OF THE ARTICLES OF INCORPORATION FOR THE 459
MUTUAL INSURANCE HOLDING COMPANY AND THE REORGANIZED STOCK 460
COMPANY, AND, IF APPLICABLE, FOR AN INTERMEDIATE HOLDING COMPANY; 462
(c) COPIES OF THE APPROVALS OBTAINED FROM THE 464
SUPERINTENDENT AND ATTORNEY GENERAL UNDER THIS SECTION. 465
(H) A REORGANIZATION PLAN SHALL BE EFFECTIVE UPON THE 468
FILING OF ALL OF THE DOCUMENTS AND STATEMENTS REQUIRED BY 469
DIVISION (G) OF THIS SECTION, OR AT SUCH LATER DATE AS THE 471
CERTIFICATE OF REORGANIZATION MAY PROVIDE. 472
(I) AFTER A REORGANIZATION PLAN TAKES EFFECT, THE 475
SUPERINTENDENT SHALL HAVE JURISDICTION OVER THE MUTUAL INSURANCE 476
HOLDING COMPANY, AND, IF APPLICABLE, OVER AN INTERMEDIATE HOLDING 477
COMPANY, IN ORDER TO ENSURE THAT THE INTERESTS OF THE MUTUAL 478
INSURANCE COMPANY'S POLICYHOLDERS ARE PROTECTED. 479
Sec. 3913.29. (A) PROPOSED AMENDMENTS TO THE ARTICLES OF 482
INCORPORATION OF A MUTUAL INSURANCE HOLDING COMPANY MAY BE 484
ADOPTED AT ANY MEMBERS' MEETING. THE BOARD OF DIRECTORS OF A 485
MUTUAL INSURANCE HOLDING COMPANY SHALL PROVIDE NOTICE OF ANY 486
MEMBERS' MEETING CONDUCTING A VOTE ON THE ADOPTION OF AN 487
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AMENDMENT TO THE ARTICLES OF INCORPORATION IN A NEWSPAPER OF 488
GENERAL CIRCULATION PUBLISHED IN THE COUNTY WHERE THE COMPANY'S 489
PRINCIPAL PLACE OF BUSINESS IS LOCATED, AT LEAST THIRTY DAYS 490
PRIOR TO THE MEMBERS' MEETING. WHERE THE AMENDMENT IS NOT 491
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THIS STATE AND OF 492
THE UNITED STATES, THE AMENDMENT MAY BE ADOPTED BY THE 495
AFFIRMATIVE VOTE OF AT LEAST THREE-FIFTHS OF THE MEMBERS PRESENT 496
AND VOTING AT THE MEETING. AFTER ADOPTING AN AMENDMENT, THE 497
BOARD OF DIRECTORS SHALL SUBMIT THE AMENDMENT TO THE ATTORNEY 498
GENERAL FOR EXAMINATION AND APPROVAL.
(B) IF, UPON EXAMINATION, THE ATTORNEY GENERAL FINDS THAT 501
THE AMENDMENTS ADOPTED AT THE MEMBERS' MEETING ARE IN ACCORDANCE 502
WITH APPLICABLE SECTIONS OF THE REVISED CODE, AND ARE NOT 505
INCONSISTENT WITH THE CONSTITUTION AND LAWS OF THE UNITED STATES 508
AND OF THIS STATE, THE ATTORNEY GENERAL SHALL APPROVE OF THE 509
AMENDMENT TO THE ARTICLES OF INCORPORATION. 510
(C) UPON RECEIVING THE APPROVAL OF THE ATTORNEY GENERAL, 513
THE AMENDMENT AND A CERTIFICATE OF THE ATTORNEY GENERAL'S 514
APPROVAL SHALL BE FILED IN THE OFFICE OF THE SECRETARY OF STATE, 515
AND SHALL THEREUPON BE IN EFFECT. AFTER RECORDING THE AMENDMENT, 516
THE SECRETARY OF STATE SHALL DEPOSIT A COPY THEREOF WITH THE 517
SUPERINTENDENT OF INSURANCE. 518
Sec. 3913.30. (A) UPON A REORGANIZATION PLAN TAKING 521
EFFECT IN ACCORDANCE WITH SECTION 3913.28 OF THE REVISED CODE, 523
THE CORPORATE EXISTENCE OF THE MUTUAL INSURANCE COMPANY SHALL 524
CONTINUE IN THE REORGANIZED STOCK COMPANY. ON THE EFFECTIVE DATE 525
OF THE REORGANIZATION, ALL OF THE ASSETS, RIGHTS, FRANCHISES, AND 526
INTERESTS OF THE MUTUAL INSURANCE COMPANY IN AND TO EVERY SPECIES 528
OF PROPERTY, WHETHER REAL, PERSONAL, OR MIXED, AND ANY
ACCOMPANYING CHOSES IN ACTION, SHALL BE VESTED IN THE REORGANIZED 530
STOCK COMPANY, WITHOUT ANY DEED OR TRANSFER, AND THE REORGANIZED 531
STOCK COMPANY SHALL ASSUME ALL THE OBLIGATIONS AND LIABILITIES OF 532
THE MUTUAL INSURANCE COMPANY.
(B) UNLESS OTHERWISE SPECIFIED IN A REORGANIZATION PLAN, 535
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THOSE PERSONS WHO ARE THE DIRECTORS AND OFFICERS OF A MUTUAL 536
INSURANCE COMPANY ON THE EFFECTIVE DATE OF THE REORGANIZATION 537
SHALL SERVE AS THE DIRECTORS AND OFFICERS OF THE REORGANIZED 538
STOCK COMPANY UNTIL NEW DIRECTORS AND OFFICERS ARE ELECTED 539
PURSUANT TO THE REORGANIZED STOCK COMPANY'S ARTICLES OF 540
INCORPORATION AND CODE OF REGULATIONS. 541
Sec. 3913.31. ALL COSTS AND EXPENSES OF THE PROCESS OF A 543
REORGANIZATION UNDER SECTIONS 3913.25 TO 3913.38 OF THE REVISED 546
CODE SHALL BE PAID FOR OR REIMBURSED BY THE MUTUAL INSURANCE 547
COMPANY, THE REORGANIZED STOCK COMPANY, OR AN INTERMEDIATE 548
HOLDING COMPANY.
Sec. 3913.32. (A) A MUTUAL INSURANCE COMPANY MAY 551
REORGANIZE BY MERGING ITS POLICYHOLDERS' MEMBERSHIP INTERESTS 552
INTO A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING COMPANY AND 553
CONTINUING THE CORPORATE EXISTENCE OF THE MUTUAL INSURANCE 554
COMPANY AS A REORGANIZED STOCK COMPANY. A MUTUAL INSURANCE 555
COMPANY REORGANIZING UNDER THIS SECTION SHALL COMPLY WITH ALL 556
APPLICABLE PROVISIONS OF SECTIONS 3913.25 TO 3913.38 OF THE 558
REVISED CODE, AND ALL APPLICABLE LAWS OF FOREIGN JURISDICTIONS, 560
TO EFFECT THE REORGANIZATION.
(B) A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING COMPANY 563
MAY REORGANIZE BY MERGING OR CONSOLIDATING ITS MEMBERSHIP 564
INTERESTS INTO ANOTHER DOMESTIC OR FOREIGN MUTUAL INSURANCE 565
HOLDING COMPANY. A DOMESTIC OR FOREIGN MUTUAL INSURANCE HOLDING 566
COMPANY REORGANIZING UNDER THIS DIVISION SHALL COMPLY WITH ALL 567
APPLICABLE PROVISIONS OF SECTIONS 3913.25 TO 3913.38 OF THE 569
REVISED CODE, AND ALL APPLICABLE LAWS OF FOREIGN JURISDICTIONS, 571
TO EFFECT THE REORGANIZATION.
Sec. 3913.33. A MEMBERSHIP INTEREST IN A MUTUAL INSURANCE 573
HOLDING COMPANY IS NOT A SECURITY UNDER THE LAWS OF THIS STATE. 574
NO MEMBER OF A MUTUAL INSURANCE HOLDING COMPANY MAY TRANSFER 575
MEMBERSHIP IN THE MUTUAL INSURANCE HOLDING COMPANY OR ANY RIGHT 576
ARISING FROM MEMBERSHIP. 577
Sec. 3913.34. (A) SECTIONS 3913.11 TO 3913.13 AND 3913.20 580
13
TO 3913.23 OF THE REVISED CODE SHALL APPLY TO A MUTUAL INSURANCE 583
HOLDING COMPANY AS IF THE MUTUAL INSURANCE HOLDING COMPANY WERE A 584
DOMESTIC MUTUAL INSURANCE COMPANY. THE MEMBERS OF THE MUTUAL 585
INSURANCE HOLDING COMPANY ARE DEEMED TO BE MEMBERS OF A DOMESTIC 586
MUTUAL INSURANCE COMPANY FOR ALL PURPOSES OF SUCH SECTIONS. 587
(B) A REORGANIZATION OF A DOMESTIC MUTUAL LIFE INSURANCE 590
COMPANY SUBJECT TO SECTIONS 3913.25 TO 3913.38 OF THE REVISED 593
CODE ALSO IS SUBJECT TO SECTIONS 3907.09 TO 3907.11 OF THE 595
REVISED CODE, IF APPLICABLE, BUT IS NOT SUBJECT TO SECTIONS 597
3901.32 TO 3901.323 OF THE REVISED CODE. 599
(C) NOTWITHSTANDING DIVISION (B) OF THIS SECTION, FOR A 603
PERIOD OF FIVE YEARS FOLLOWING THE EFFECTIVE DATE OF A
REORGANIZATION UNDER SECTIONS 3913.25 TO 3913.38 OF THE REVISED 606
CODE, NO PERSON SHALL ACQUIRE CONTROL OF A REORGANIZED STOCK 607
COMPANY WITHOUT COMPLIANCE WITH SECTIONS 3901.32 TO 3901.323 OF 608
THE REVISED CODE. FOR PURPOSES OF THIS DIVISION, "CONTROL" HAS 611
THE SAME MEANING AS IN DIVISION (B) OF SECTION 3901.32 OF THE 613
REVISED CODE, EXCEPT THAT CONTROL IS PRESUMED TO EXIST IF ANY 615
PERSON, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS, HOLDS WITH THE 616
POWER TO VOTE, OR HOLDS PROXIES REPRESENTING FIVE PER CENT OR 617
MORE OF THE VOTING SECURITIES OF ANY OTHER PERSON. 618
(D) AN INTERMEDIATE HOLDING COMPANY OR, IF THERE IS NO 621
SUCH COMPANY, A REORGANIZED STOCK COMPANY SHALL NOT ISSUE SHARES
OF STOCK, IN ADDITION TO THE SHARES ISSUED PURSUANT TO THE 622
REORGANIZATION PLAN UNDER WHICH THE COMPANY WAS FORMED, WITHOUT 623
THE PRIOR APPROVAL OF THE MUTUAL INSURANCE HOLDING COMPANY AS ITS 624
MAJORITY SHAREHOLDER. THE PRIOR APPROVAL OF THE MUTUAL INSURANCE 625
HOLDING COMPANY MUST BE EVIDENCED BY A RESOLUTION OF THE BOARD OF 626
DIRECTORS OF THE MUTUAL INSURANCE HOLDING COMPANY DELIVERED TO
THE BOARD OF DIRECTORS OF THE INTERMEDIATE HOLDING COMPANY OR THE 627
REORGANIZED STOCK COMPANY PRIOR TO THE ISSUANCE OF THE ADDITIONAL 629
SHARES.
(E) A MUTUAL INSURANCE HOLDING COMPANY, AND AN 632
INTERMEDIATE HOLDING COMPANY, IF ANY, ARE DEEMED TO BE INSURERS 633
14
SUBJECT TO SECTIONS 3901.07, 3901.071, AND 3901.48 OF THE REVISED 635
CODE. 636
Sec. 3913.35. (A) A MUTUAL INSURANCE HOLDING COMPANY, 639
AND, IF APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, ARE DEEMED 640
TO BE INSURERS SUBJECT TO SECTIONS 3903.01 TO 3903.76 OF THE 642
REVISED CODE. A MUTUAL INSURANCE HOLDING COMPANY AND THE 644
INTERMEDIATE HOLDING COMPANY ACCORDINGLY ARE DEEMED TO BE PARTIES 645
TO ANY PROCEEDING UNDER SECTIONS 3903.01 TO 3903.76 OF THE 647
REVISED CODE INVOLVING AN INSURANCE COMPANY THAT IS A SUBSIDIARY 649
OF THE MUTUAL INSURANCE HOLDING COMPANY OR OF THE INTERMEDIATE 650
HOLDING COMPANY AS A RESULT OF A REORGANIZATION UNDER SECTIONS 651
3913.25 TO 3913.38 OF THE REVISED CODE. 653
(B) IN ANY PROCEEDING UNDER SECTIONS 3903.01 TO 3903.76 OF 656
THE REVISED CODE INVOLVING A REORGANIZED STOCK COMPANY, THE 659
ASSETS OF THE MUTUAL INSURANCE HOLDING COMPANY, AND, IF 660
APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, ARE DEEMED TO BE 661
ASSETS OF THE REORGANIZED STOCK COMPANY FOR PURPOSES OF 662
SATISFYING CLAIMS OF THE POLICYHOLDERS OF THE REORGANIZED STOCK 663
COMPANY.
(C) A MUTUAL INSURANCE HOLDING COMPANY, AND, IF 666
APPLICABLE, ITS INTERMEDIATE HOLDING COMPANY, SHALL NOT BE 667
DISSOLVED OR LIQUIDATED WITHOUT COMPLIANCE WITH THE PROVISIONS OF 668
CHAPTER 3903. OF THE REVISED CODE. SUCH COMPANIES ARE DEEMED TO 671
BE DOMESTIC INSURANCE COMPANIES FOR PURPOSES OF A DISSOLUTION OR 672
LIQUIDATION UNDER CHAPTER 3903. OF THE REVISED CODE. 675
Sec. 3913.36. ANY ACTION CHALLENGING THE VALIDITY OF, OR 677
ARISING OUT OF, ACTIONS TAKEN OR PROPOSED TO BE TAKEN IN 678
CONNECTION WITH A REORGANIZATION UNDER SECTIONS 3913.25 TO 679
3913.38 OF THE REVISED CODE SHALL BE COMMENCED NO LATER THAN 682
THIRTY DAYS AFTER THE EFFECTIVE DATE OF THE REORGANIZATION. 683
Sec. 3913.37. THE SUPERINTENDENT OF INSURANCE MAY ADOPT 685
RULES IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE TO 689
CARRY OUT THE PURPOSES OF SECTIONS 3913.25 TO 3913.38 OF THE 691
REVISED CODE. 692
15
Sec. 3913.38. THE ATTORNEY GENERAL MAY, UNDER AUTHORITY 694
GRANTED UNDER COMMON LAW AND SECTIONS 109.23, 109.24, 109.34, AND 695
109.35 OF THE REVISED CODE, REVIEW ANY TRANSACTION, AS DEFINED IN 697
SECTION 109.34 OF THE REVISED CODE, INVOLVING NONPROFIT HEALTH 699
CARE ENTITIES. NOTHING IN SECTION 3901.043 OR SECTIONS 3913.25 700
TO 3913.37 OF THE REVISED CODE SHALL BE CONSTRUED TO LIMIT THE 701
INDEPENDENT AUTHORITY OF THE ATTORNEY GENERAL TO PROTECT AND 702
PRESERVE CHARITABLE ASSETS AND CHARITABLE TRUSTS OF SUCH 703
ENTITIES. IN ADDITION, NOTHING IN THIS SECTION SHALL BE 704
CONSTRUED TO LIMIT OR EXPAND ANY OTHER COMMON LAW OR STATUTORY 705
AUTHORITY OF THE ATTORNEY GENERAL.
Sec. 3913.31 3913.40. (A) Any insurer that is organized 714
under the laws of another state and is admitted to transact the 716
business of insurance in this state may become a domestic insurer 717
by complying with all of the requirements of law relative to the 718
organization and licensing of a domestic insurer of the same type 719
and by designating its principal place of business at a place in 720
this state. Such a domestic insurer shall be issued like 721
certificates and licenses to transact business in this state, is 722
subject to the jurisdiction of this state, and shall be 723
recognized as an insurer formed under the laws of this state as 724
of the date of its original incorporation in its original 725
domiciliary state. The superintendent of insurance shall approve 726
any proposed transfer of domicile under this division unless he 727
THE SUPERINTENDENT determines that the transfer is not in the 729
interest of policyholders of this state. 730
(B) Any domestic insurer, upon the approval of the 732
superintendent, may transfer its domicile to any other state in 733
which it is admitted to transact the business of insurance. Upon 734
such a transfer, the insurer shall cease to be a domestic 735
insurer, and shall be admitted to this state if qualified as a 736
foreign insurer. The superintendent shall approve any proposed 737
transfer of domicile under this division unless he THE 738
SUPERINTENDENT determines that the transfer is not in the 740
16
interest of policyholders of this state. 741
(C)(1) With respect to any insurer that is licensed to 743
transact the business of insurance in this state and that 744
transfers its domicile to this or any other state by merger, 745
consolidation, or any other lawful method, both of the following 746
apply: 747
(a) The certificate of authority, agents appointments and 749
licenses, rates, and other items as allowed by the superintendent 750
that are in existence at the time of the transfer shall continue 751
in effect upon the transfer if the insurer remains qualified to 752
transact the business of insurance in this state. 753
(b) All outstanding policies shall remain in effect and 755
need not be endorsed as to the new name of the company or its new 756
location unless so ordered by the superintendent. 757
(2) Every transferring insurer as described in division 759
(C)(1) of this section shall file new policy forms with the 760
superintendent on or before the effective date of the transfer, 761
but may use existing policy forms with appropriate endorsements 762
if allowed by, and under such conditions as are approved by, the 763
superintendent. Every such insurer shall notify the 764
superintendent of the details of the proposed transfer, and shall 765
file promptly any resulting amendments to corporate documents 766
filed or required to be filed with the superintendent. 767
(D) The superintendent, in accordance with Chapter 119. of 769
the Revised Code, may adopt rules to carry out the purposes of 770
this section. 771
Section 2. That existing sections 3901.043 and 3913.31 of 773
the Revised Code are hereby repealed. 774