Ala. Code § 27-31B-21 (1975) Conversion to Or Merger With Reciprocal Insurer

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 27-31B-21 (1975)

(a) An association captive insurance company or industrial insured group formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan therefor and this section.

(b) A plan for this conversion or merger shall satisfy both of the following:

(1) Be fair and equitable to the shareholders, in the case of a stock insurer, or the policyholders, in the case of a mutual insurer.

(2) Provide for the purchase of the shares of any nonconsenting shareholder of a stock insurer or the policyholder interest of any nonconsenting policyholder of a mutual insurer in substantially the same manner and subject to the same rights and conditions as are accorded a dissenting shareholder under Article 13, commencing with Section 10-2B-13.01, of Chapter 2B of Title 10.

(c) A conversion authorized under subsection (a) shall satisfy all of the following:

(1) The conversion shall be accomplished under a reasonable plan and procedure as may be approved by the commissioner. Notwithstanding the foregoing, the commissioner may not approve any plan of conversion unless the plan satisfies subsection (b) and all of the following:

a. Provides for a hearing, of which notice has been given to the insurer, its directors, officers, and stockholders, in the case of a stock insurer, or policyholders, in the case of a mutual insurer, all of whom shall have the right to appear at the hearing, except that the commissioner may waive or modify the requirements for the hearing. If a notice of hearing is required, but no hearing is requested, the commissioner may cancel the hearing.

b. Provides for the conversion of existing stockholder or policyholder interests into subscriber interests in the resulting reciprocal insurer, proportionate to stockholder or policyholder interests in the stock or mutual insurer.

c. Is approved as follows:

1. In the case of a stock insurer, by a majority of the shares entitled to vote represented in person or by proxy at a duly called regular or special meeting at which a quorum is present.

2. In the case of a mutual insurer, by a majority of the voting interests of policyholders represented in person or by proxy at a duly called regular or special meeting thereof at which a quorum is present.

(2) The commissioner shall approve the plan of conversion if the commissioner finds that the conversion will promote the general good of the state in conformity with those standards set forth in subsection (e) of Section 27-31B-8.