1997 Minnesota Statutes

     60A.16 Mergers and consolidations. 

    Subdivision 1.    Scope.  (1)   Domestic insurance 
 corporations.  Any two or more domestic insurance 
 corporations, formed for any of the purposes for which stock, 
 mutual, or stock and mutual insurance corporations might be 
 formed under the laws of this state, may be 

    (a) merged into one of such domestic insurance 
 corporations, or 

    (b) consolidated into a new insurance corporation to be 
 formed under the laws of this state. 

    (2)   Domestic and foreign insurance corporations.  Any 
 such domestic insurance corporations and any foreign insurance 
 corporations formed to carry on any insurance business for the 
 conduct of which an insurance corporation might be organized 
 under the laws of this state, may be 

    (a) merged into one of such domestic insurance 
 corporations, or 

    (b) merged into one of such foreign insurance corporations, 
 or 

    (c) consolidated into a new insurance corporation to be 
 formed under the laws of this state, or 

    (d) consolidated into a new insurance corporation to be 
 formed under the laws of the government under which one of such 
 foreign insurance corporations was formed, provided that each of 
 such foreign insurance corporations is authorized by the laws of 
 the government under which it was formed to effect such merger 
 or consolidation. 

    Subd. 2.    Procedure to be followed.  (1)   
 Agreement.  The merger or consolidation of insurance 
 corporations can be effected only as a result of a joint 
 agreement entered into, approved, and filed as follows: 

    (a) The board of directors of each of such insurance 
 corporations as desire to merge or consolidate may, by majority 
 vote, enter into a joint agreement signed by such directors and 
 prescribing the terms and conditions of merger or consolidation, 
 the mode of carrying the same into effect, with such other 
 details and provisions as are deemed necessary.  In the case of 
 merging or consolidating stock insurance corporations or stock 
 and mutual insurance corporations, such joint agreement may 
 prescribe that stock of one or more of such corporations shall 
 be converted, in whole or in part, into stock or other 
 securities of a corporation which is not a merging or 
 consolidating corporation or into cash. 

    (b) The agreement shall be submitted to the shareholders or 
 members, as the case may be, of each of the merging or 
 consolidating insurance corporations, at a special meeting duly 
 called for the purpose of considering and acting upon the 
 agreement, and if the holders of two-thirds of the voting power 
 of the shareholders or members present or represented at the 
 meeting of each such insurance corporation shall vote for the 
 adoption of the agreement, then that fact shall be certified on 
 the agreement by the secretary of each insurance corporation, 
 and the agreement so adopted and certified shall be signed and 
 acknowledged by the president and secretary of each of said 
 insurance corporations; provided, however, that in the case of a 
 merger, except one whereby any shares of the surviving insurance 
 corporation are to be converted into shares or other securities 
 of another corporation or into cash, the agreement need not be 
 submitted to the shareholders or members of that one of the 
 insurance corporations into which it has been agreed the others 
 shall be merged, but the agreement may be signed and 
 acknowledged by the president and secretary of such insurance 
 corporation at the direction of the board of directors. 

    (c) The agreement so adopted, certified and acknowledged 
 shall be delivered to the commissioner of commerce, who, if the 
 agreement is reasonable and if the provisions thereof providing 
 for any transfer of assets and assumption of liabilities are 
 fair and equitable to the claimants and policyholders, shall 
 place a certificate of approval on the agreement and shall file 
 the agreement in the commissioner's office, and a copy of the 
 agreement, certified by the commissioner of commerce, shall be 
 filed for record in the office of the secretary of state and in 
 the offices of the county recorders of the counties in this 
 state in which any of the corporate parties to the agreement 
 have their home or principal offices, and of any counties in 
 which any of the corporate parties have land, title to which 
 will be transferred as a result of the merger or consolidation. 

    (2)   Articles of incorporation of new company.  (a) If 
 the joint agreement is for a consolidation into a new insurance 
 corporation to be formed under any law or laws of this state, 
 articles of incorporation for such new insurance corporation 
 shall be prepared and delivered to the commissioner of commerce 
 together with the agreement as provided in clause (1) hereof. 

    (b) Such articles shall be prepared, executed, approved, 
 filed and recorded in the form and manner prescribed in, or 
 applicable to, the particular law or laws under which the new 
 insurance corporation is to be formed. 

    Subd. 3.    Consummation of merger.  (1) A merger of 
 one or more insurance corporations into a domestic insurance 
 corporation shall be effective when the joint agreement has been 
 approved and filed in the office of the commissioner of commerce.

    (2) A consolidation of insurance corporations into a new 
 domestic insurance corporation shall be effective when the joint 
 agreement and the new articles of incorporation have been 
 approved and filed in the office of the commissioner of commerce.

    (3) A merger or consolidation of one or more domestic 
 insurance corporations into a foreign insurance corporation 
 shall be effective according to the provisions of law of the 
 jurisdiction in which such foreign insurance corporation was 
 formed, but not until the joint agreement has been adopted, 
 certified and acknowledged, and copies thereof approved and 
 filed in accordance with subdivision 2, clause (1). 

    Subd. 4.    Effect of merger or consolidation.  Upon 
 the consummation of the merger or consolidation as provided in 
 subdivision 3, the effect of such merger or consolidation shall 
 be: 

    (1) That the several corporate parties to the joint 
 agreement shall be one insurance corporation, which shall be 

    (a) in the case of a merger, that one of the constituent 
 insurance corporations into which it has been agreed the others 
 shall be merged and which shall survive the merger for that 
 purpose, or 

    (b) in the case of a consolidation, the new insurance 
 corporation into which it has been agreed the others shall be 
 consolidated; 

    (2) The separate existence of the constituent insurance 
 corporations shall cease, except that of the surviving insurance 
 corporation in the case of a merger; 

    (3) The surviving or new insurance corporation, as the case 
 may be, shall possess all the rights, privileges and franchises 
 possessed by each of the former insurance corporations so merged 
 or consolidated except that such surviving or new corporation 
 shall not thereby acquire authority to engage in any insurance 
 business or exercise any right which an insurance corporation 
 may not be formed under the laws of this state to engage in or 
 exercise; 

    (4) All the property, real, personal and mixed, of each of 
 the constituent insurance corporations, and all debts due on 
 whatever account to any of them, including without limitation 
 subscriptions for shares, premiums on existing policies, and 
 other choses in action belonging to any of them, shall be taken 
 and be deemed to be transferred to and invested in such 
 surviving or new insurance corporation, as the case may be, 
 without further act or deed; 

    (5) The surviving or new insurance corporation shall be 
 responsible for all the liabilities and obligations of each of 
 the insurance corporations merged or consolidated, in accordance 
 with the terms of the agreement for merger or consolidation; but 
 the rights of the creditors of the constituent insurance 
 corporations, or of any persons dealing with such insurance 
 corporations shall not be impaired by such merger or 
 consolidation, and any claim existing or action or proceeding 
 pending by or against any of the constituent insurance 
 corporations may be prosecuted to judgment as if the merger or 
 consolidation had not taken place, or the surviving or new 
 insurance corporation may be proceeded against or substituted in 
 its place. 

    Subd. 5.    Nonconsenting shareholders.  (1) When an 
 insurance corporation having capital stock has become a party to 
 a merger or consolidation agreement, as hereinbefore provided, 
 any shareholder of such an insurance corporation who voted 
 against the merger or consolidation at the meeting at which it 
 was authorized, may, at any time within 20 days after such 
 authorization was given, object thereto in writing and demand 
 payment for the shares held. 

    (2) If, after such a demand by a shareholder, the insurance 
 corporation and the shareholder cannot agree upon the value of 
 the shares at the time the merger or consolidation was 
 authorized, such value shall be ascertained by three 
 disinterested persons, one of whom shall be named by the 
 shareholder, another by the insurance corporation and the third 
 by the two thus chosen.  The finding of the appraisers shall be 
 final, and if their award is not paid by the insurance 
 corporation within 30 days after it is made, it may be recovered 
 in an action by the shareholder against the insurance 
 corporation.  The liability of the insurance corporation to the 
 dissenting shareholder for the value of the shares so agreed 
 upon or awarded shall also be a liability of the surviving or 
 new insurance corporation, as the case may be.  Upon payment by 
 the insurance corporation or by the surviving or new corporation 
 to the shareholder of the agreed or awarded price of the shares, 
 the shareholder shall forthwith transfer and assign the shares 
 held at, and in accordance with, the request of the corporation. 

    (3) A shareholder shall not be entitled to payment for 
 shares under the provisions of this subdivision unless the value 
 of the corporate assets which would remain after such payment 
 would be at least equal to the aggregate amount of its debts and 
 liabilities including outstanding capital stock. 

    Subd. 6.    Disclosure of expenses; prohibitions and 
 penalty.  All actual expenses and costs incident to 
 proceedings under the provisions of this section shall be paid 
 by the surviving or new company and an itemized statement of the 
 expenses and costs shall be filed with the commissioner prior to 
 formal approval.  No officer of any such company or employee of 
 the department of commerce, shall receive any compensation, 
 gratuity or otherwise, directly or indirectly, for in any manner 
 aiding, promoting, or assisting in such consolidation or merger. 

    Any officer, director, or stockholder of any company, or 
 any employee of the state, violating, or consenting to the 
 violation of, the provisions of this subdivision shall be 
 punished by a fine of not less than $20,000 and by imprisonment 
 for not less than one year. 

    HIST: 1967 c 395 art 1 s 16; 1973 c 521 s 1; 1976 c 181 s 2; 
 1983 c 289 s 114 subd 1; 1984 c 628 art 3 s 11; 1984 c 655 art 1 
 s 92; 1986 c 444