38.2-1005.1:2 - Formation of mutual holding company and conversion of mutual company - Virginia Statutes

§ 38.2-1005.1:2. Formation of mutual holding company and conversion of mutualcompany.

A mutual company, upon approval of the Commission, may reorganize by forminga mutual holding company and continue the corporate existence of thereorganizing mutual company as a stock insurance company in accordance withthe provisions of this article. At the time a plan of MHC conversion becomeseffective and without any further action:

1. The mutual company shall become a stock corporation, the membershipinterests of the policyholders in the mutual company shall be deemedextinguished and all eligible members of the mutual company shall becomemembers of the mutual holding company in accordance with the articles ofincorporation and bylaws of the mutual holding company and the applicableprovisions of this article and Chapter 10 (§ 38.2-1000 et seq.) of thistitle; and

2. All of the shares of capital stock of the converted company shall beissued to the mutual holding company that, at all times thereafter, shall ownnot less than a majority of the issued shares of the voting stock of theconverted company; however, either at the time the conversion becomeseffective or, with the Commission's approval, at any later time, the votingshares of the converted company may be held by one or more intermediateholding companies so long as the mutual holding company at all times owns,directly or indirectly, a majority of the voting shares of the convertedcompany.

(2001, c. 726.)