§ 58-10-1. Stock to mutual insurer conversion. - North Carolina Statutes

Article 10.

Miscellaneous InsurerFinancial Provisions.

Part 1. Conversion of Stock andMutual Insurers.

§ 58‑10‑1.  Stockto mutual insurer conversion.

Any domestic stock lifeinsurance corporation may become a mutual life insurance corporation, and to thatend may carry out a plan for the acquisition of shares of its capital stock:Provided, however, that such plan (i) shall have been adopted by a vote of amajority of the directors of such corporation; (ii) shall have been approved bya vote of the holders of two thirds of the stock outstanding at the time ofissuing the call for a meeting for that purpose; (iii) shall have beensubmitted to the Commissioner and shall have been approved by him in writing,and (iv) shall have been approved by a majority vote of the policyholders(including, for the purpose of this Part, the employer or the president,secretary or other executive officer of any corporation or association to whicha master group policy has been issued, but excluding the holders of certificatesor policies issued under or in connection with a master group policy) voting atsaid meeting, called for that purpose, at which meeting only such policyholderswhose insurance shall then be in force and shall have been in force for atleast one year prior to such a meeting shall be entitled to vote; notice ofsuch a meeting shall be given by mailing such notice, postage prepaid, from thehome office of such corporation at least 30 days prior to such meeting to suchpolicyholders at their last known post‑office addresses: Provided, thatpersonal delivery of such written notice to any policyholder may be in lieu ofmailing the same; and such meeting shall be otherwise provided for andconducted in such a manner as shall be provided in such plan: Provided, however,that policyholders may vote in person, by proxy, or by mail; that all suchvotes shall be cast by ballot, and a representative of the Commissioner shallsupervise and direct the methods and procedure of said meeting and appoint anadequate number of inspectors to conduct the voting at said meeting who shallhave power to determine all questions concerning the verification of theballots, the ascertainment of the validity thereof, the qualifications of thevoters, and the canvass of the vote, and who shall certify to the saidrepresentative and to the corporation the results thereof, and with respectthereto shall act under such rules and regulations as shall be prescribed bythe Commissioner; that all necessary expenses incurred by the Commissioner orhis representative shall be paid by the corporation as certified to by saidCommissioner. Every payment for the acquisition of any shares of the capitalstock of such corporation, the purchase price of which is not fixed by suchplan, shall be subject to the approval of the Commissioner: Provided, thatneither such plan, nor any payment thereunder, nor any payment not fixed bysuch plan, shall be approved by the Commissioner, if the making of such paymentshall reduce the assets of the corporation to an amount less than the entireliabilities of the corporation, including therein the net values of itsoutstanding contracts according to the standard adopted by the Commissioner,and also all other funds, contingent reserves and surplus which the corporationis required by order or direction of the Commissioner to maintain, save so muchof the surplus as shall have been appropriated or paid under such plan. (1937, c. 231, s. 1; 1991, c.720, s. 4; 1995, c. 318, s. 1; 2001‑223, s. 9.3.)