§431:19-106.5 Conversion or merger of captive insurers. (a) Subject to this section, a captive insurance company domiciled in the State may be converted into, or merged with, a different form of captive insurer under this article.
(b) A plan of conversion or merger shall be submitted to and be approved by the commissioner in advance of the proposed conversion or merger. The commissioner shall not approve the plan unless:
(1) The commissioner finds that it is fair, equitable, and consistent with law;
(2) The plan has been approved by at least two-thirds of the voting interest or unanimous written consent of the voting interest of the captive insurance company;
(3) The plan provides for:
(A) The conversion of existing stockholder, member, or subscriber interests into equal or proportionate interests in the new converted or merged insurer, or such other method and basis for the conversion of the stockholder, member, or subscriber interests that is fair and equitable;
(B) The purchase or other disposition of the shares of any nonconsenting shareholder of a stock insurer, policyholder interest of any nonconsenting member of a mutual insurer, membership interest of a limited liability company, or subscriber surplus account interest, if any, of a subscriber of a reciprocal insurer, in accordance with either an agreement with any nonconsenting stockholder, member, or subscriber or with the existing organizational documents of the insurer relating to the buyback buyout, or the termination of the stockholder, member, or subscriber interests, if any, or if no such provisions exist, then in accordance with the laws of this State relating to the rights of dissenting shareholders; and
(C) The novation, assignment, transfer, run-off, or other disposition of in-force policies insuring any nonconsenting shareholder, member, or subscriber;
(4) The conversion or merger will leave the resulting converted insurer or surviving insurer of the merger with capital or surplus funds reasonably adequate to preserve the security of its policyholders and an ability to continue to transact business in the classes of insurance in which it is then authorized to transact; and
(5) The commissioner finds that the conversion or merger will promote the general good of the State.
(c) After approval of the plan of conversion or merger by the commissioner, the converting or merging insurer shall file with the director of commerce and consumer affairs, appropriate organizational documents to commence the existence of the company in its converted or merged form. Documents filed with the director of commerce and consumer affairs pursuant to this subsection shall comply with all applicable requirements for such documents as may be contained in this article and chapter 414, 414D, or 428, as to the extent that these laws are applicable to the conversion or merger.
(d) Where a stock or mutual insurer converts to a reciprocal insurer or merges with a reciprocal insurer in which the reciprocal insurer will be the surviving company, the stock or mutual insurer shall include in its articles of amendment the fact of the conversion to, or merger with, a reciprocal insurer and that the resulting or surviving entity shall be a reciprocal insurer under the continued jurisdiction of the commissioner, the effective date of the conversion or merger, and the name of the agent for service of process of the converted or surviving reciprocal insurer.
(e) In the case of the merger of two reciprocal insurers, no articles of amendment, merger, or incorporation shall be required to be filed with the director of commerce and consumer affairs, and the merger shall be effective upon the effective date approved by the commissioner pursuant to the plan of merger filed with and approved by the commissioner.
(f) Notwithstanding that the corporate existence of a stock or mutual insurer which converts to, or merges with, a reciprocal insurer may cease, in all cases of a conversion or merger pursuant to this section, and unless otherwise provided in the approved plan of conversion or merger, the converted insurer or the surviving company of the merger shall assume and succeed to all of the obligations and liabilities of the pre-conversion insurer or the respective merging insurers and shall be held liable to pay and discharge all such debts and liabilities and perform such obligations in the same manner as if they had been incurred or contracted by the converted or surviving merged insurer.
(g) An alien or foreign insurer may be a party to a merger under this section provided that the surviving company shall otherwise qualify and be approved by the commissioner as a captive insurance company under this article. For purposes of chapters 414 and 414D, an alien stock or mutual insurer subject to this section shall be considered a foreign corporation.
(h) This section shall not supersede section 431:19-102, and shall not apply to redomestications or conversions of captive insurers under section 431:19-102.4. [L 2000, c 68, §2; am L 2001, c 55, §21; am L 2002, c 40, §73; am L 2003, c 212, §115; am L 2007, c 232, §8; am L 2012, c 253, §12]