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California Law (Last Updated: March 4, 2014) |
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Insurance Code - INS |
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Division 2. CLASSES OF INSURANCE |
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Part 1. FIRE AND MARINE INSURANCE |
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Chapter 4. General Mutual Insurers |
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ARTICLE 10. Conversion of an Incorporated Medical Malpractice Mutual Insurer into an Incorporated Stock Insurer |
Section 4097.07.
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The meeting of members prescribed by subdivision (c) of Section 4097.02 shall be called by the board of directors, the chairperson of the board, or the president of the mutual company. Notice of the meeting shall be given to eligible members by mail at least 45 days prior to the date set for the meeting to members of the mutual company of record on the date the plan of conversion was adopted by the board of directors. In the event that a plan of reorganization provides for the establishment of a mutual holding company under Section 4097.05, the notice shall be accompanied by an information statement describing the proposed reorganization. The information statement shall include, at a minimum, the following items:
(a) A full copy and a summary of the plan of reorganization.
(b) A discussion addressing the reasons and purposes of the proposed restructuring, which shall include a comparison to a demutualization.
(c) An analysis of the benefits and risks associated with the proposed reorganization to the mutual company and its policyholders.
(d) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests and a description of how the policyholders' rights differ at the mutual holding company level from those in the existing company.
(e) A description of any stock issuance, including any shares or options to be issued to directors, officers, agents, employees, or employee benefit plans, for their benefit, that will be made in conjunction with the plan of conversion, if any, and the guidelines and parameters which shall apply in the event stock is to be issued, including a detailed discussion of subscription rights that are to be granted to policyholders.
(f) Any proposed amendments to the mutual insurer's articles of incorporation to address the restructuring from a mutual to a stock insurer.
(g) Any proposed articles and bylaws of the mutual holding company and any other entities to be created in the reorganization.
(h) Financial information.
(i) Any other information that the commissioner determines is necessary to make a complete and adequate disclosure to policyholders.
Voting shall be by ballot, in person or by proxy. A quorum shall consist of 10 percent of the members of the mutual company entitled to vote at the meeting.