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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 4097.19.
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(a) The amended articles of incorporation of a converted company that have been adopted pursuant to a plan of conversion and filed with the Secretary of State in accordance with Section 4097.11 may be further amended after the effective date pursuant to applicable law. The plan of conversion may be amended in other respects after the effective date of the plan as specified in this section. The amendment shall take effect upon filing with the Secretary of State after compliance with the following:
(1) Approval by a resolution of at least two-thirds of the board of directors of the converted company. The resolution shall specify the reasons for and the purposes of the proposed amendment.
(2) Submission to the commissioner for consent in writing, subject to the provisions of Section 4097.06.
(3) For the conversion of a mutual insurer, approval by at least two-thirds of those current policyholders of the corporation who were members of the former mutual insurer and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 4097.02 and who vote at a meeting called for that purpose.
(4) For the demutualization of a mutual holding company, approval by at least two-thirds of those current members of the corporation who were members of the former mutual holding company and were entitled to vote on the original plan of conversion approved pursuant to subdivision (c) of Section 4097.02 and who vote at a meeting called for that purpose.
(5) Filed in the office of the commissioner after having been consented to and approved as contemplated by paragraphs (2), (3), and (4).
(b) If an amendment proposed under subdivision (a) would adversely affect the rights of one or more classes of members, but not all those members, then only the members of each class whose rights would be adversely affected by the proposed amendment are entitled to vote on the proposed plan amendment.
(c) A policyholder or member meeting prescribed by paragraph (3) or (4) of subdivision (a) shall be called by the board of directors, the chairperson of the board, or the president of the converted company. Notice of the meeting shall be given to policyholders or members entitled to vote at the meeting by mail at least 45 days prior to the date set for the meeting. Voting shall be by ballot, in person, or by proxy. A quorum consists of 10 percent of the policyholders or members of the converted company entitled to vote at the meeting.
(d) At any time before the plan amendment becomes effective, the converted company may, by resolution of two-thirds of the board of directors, amend the plan amendment or withdraw its plan amendment. For an amendment to a plan amendment, all references in this section to the plan amendment shall be deemed to refer to the plan amendment as amended. Any amendment of the plan amendment shall require the written consent of the commissioner. No amendment shall be deemed to change the date of adoption of the plan amendment. No amendment made after approval by the policyholders or members as provided in paragraph (3) or (4) of subdivision (a) may change the plan amendment in a manner that the commissioner determines is materially disadvantageous to any of the affected policyholders or members unless the plan amendment as amended is submitted for reconsideration under the procedures prescribed for the original plan amendment policyholder or member approval.