2001 Minnesota Statutes

     61A.37 Domestic insurance corporations may become mutual 
  corporations.  

    Any domestic insurance corporation heretofore or hereafter 
 incorporated for the transaction of the kinds of business 
 authorized and permitted by section 60A.06, subdivision 1, 
 clause (4), and having capital stock may become a mutual 
 corporation and to that end may formulate and carry out a plan 
 for the acquisition by it of its outstanding capital stock, and 
 for the mutualization of such corporation, as follows: 

    (a) Such plan shall have been adopted by vote of a majority 
 of the directors of such company.  

    (b) Such plan shall have been submitted to the commissioner 
 of commerce and shall have been approved as conforming to the 
 requirements of this section and section 61A.38 and as not 
 prejudicial to the policyholders of such company or to the 
 insuring public.  

    (c) Such plan shall have been approved by a vote of 
 stockholders representing a majority of the outstanding capital 
 stock at a meeting of stockholders called for that purpose.  
 Stockholders may vote in person or by proxy filed with the 
 company at least five days before the meeting at which it is to 
 be used.  Notice of such meeting shall be given by mailing such 
 notice from the home office of such company at least 30 days 
 prior to such meeting in a sealed envelope, postage prepaid, 
 directed to each stockholder at the address shown on the stock 
 records of the company.  

    (d) Such plan shall have been approved by a majority of the 
 votes cast by policyholders (whether or not members) who vote at 
 a meeting called for that purpose.  Eligibility of 
 policyholders, whether or not members of the company, and the 
 number of votes to which each is entitled, shall be determined 
 by the laws of Minnesota relating to the rights of members of 
 domestic mutual life insurance companies to vote at company 
 meetings.  Policyholders may vote in person or by proxy filed 
 with the company at least five days before the meeting at which 
 it is to be used.  Notice of such meeting shall be given by 
 mailing such notice from the home office of such company at 
 least 30 days prior to such meeting in a sealed envelope, 
 postage prepaid, directed to each policyholder at the address 
 shown on the policy records of the company.  Such meeting shall 
 be conducted in such manner as may be provided for in such plan, 
 with the approval of the commissioner.  The commissioner shall 
 supervise and direct the methods and procedure of said meeting 
 and appoint an adequate number of inspectors to conduct the 
 voting at said meeting, who shall have power to determine all 
 questions concerning the verification of the ballots, the 
 ascertaining of the validity thereof, the qualifications of the 
 voters and the canvass of the vote.  Such inspectors, or any one 
 thereof designated by the commissioner, shall certify to the 
 commissioner and to such company the result of such vote, and 
 with respect thereto shall act under such rules as shall be 
 prescribed by the commissioner.  All necessary expenses incurred 
 by the commissioner, or incurred with the commissioner's 
 approval by the inspectors appointed, shall be paid by such 
 company upon the certificate of the commissioner.  

    (e) Approval of the plan by stockholders and policyholders 
 as above provided may be given at a joint meeting thereof.  

    (f) Such plan may specify the purchase price to be paid by 
 such company for shares of its capital stock, and in such case 
 the price so specified shall be adhered to.  If such plan does 
 not specify the price to be paid for such shares, such company 
 shall first obtain the approval of the commissioner for every 
 payment made for the acquisition of any shares of its capital 
 stock.  

    (g) Such plan may authorize the board of directors of the 
 company to provide for participation in the surplus of the 
 company by holders of policies which do not by their terms 
 provide for such participation or which provide for a limited 
 participation only, and may include appropriate proceedings to 
 confer upon policyholders the right to vote at meetings of the 
 company.  Policyholders upon whom the right to vote is so 
 conferred shall have the same voting rights and shall be 
 entitled to the same notice of annual meeting as members of 
 domestic mutual life insurance companies.  

    (h) Before approving any such plan or any such payment, the 
 commissioner shall be satisfied, by making investigation or such 
 evidence as the commissioner may require, that such company, 
 after deducting the aggregate sum appropriated by such plan for 
 the acquisition of any part or all of its capital stock, and in 
 the case of any payment not fixed by such plan and subject to 
 approval as aforesaid, after deducting also the amount of such 
 payment, will be possessed of admitted assets in an amount equal 
 to the sum of (1) and (2) as follows: 

    (1) Its entire liabilities, including the net value of its 
 outstanding contracts computed as provided by law, and (2) the 
 contingency reserve deemed by the commissioner necessary to 
 protect its policyholders and the insuring public, in view of 
 the past experience of such company, the character of its 
 assets, its present management and its probable future earnings. 

    The commissioner's action in refusing to give any approval 
 required by this section shall be subject to review by any court 
 of competent jurisdiction.  

    Such plan may be amended by vote of stockholders 
 representing a majority of the outstanding capital stock and by 
 a majority of the votes cast by policyholders who vote at the 
 meeting, but in such case the plan shall not become effective 
 until approved, as amended, by vote of a majority of the 
 directors of such company and by the commissioner.  

    HIST: 1967 c 395 art 2 s 37; 1983 c 289 s 114 subd 1; 1984 c 
 655 art 1 s 92; 1986 c 444