§ 7307. Conversion of domestic mutual property/casualty insurance\ncompanies or advance premium corporations into domestic stock\nproperty/casualty insurance companies; insurers not in rehabilitation.\n(a) In this article:\n (1) "Affiliate" of a mutual insurer means any person who controls, is\ncontrolled by or is under common control with, the mutual insurer being\nconverted. A corporation is an affiliate of another corporation,\nregardless of ownership, if substantially the same group of persons\nmanage the two corporations.\n (2) "Control" has the meaning assigned to it in paragraph two of\nsubsection (a) of section one thousand five hundred one of this chapter.\n (3) A "domestic mutual insurer" or "mutual insurer" means a domestic\nmutual property/casualty insurance company organized under article\ntwelve of this chapter and licensed under article forty-one of this\nchapter, or a domestic advance premium corporation organized and\nlicensed under article sixty-six of this chapter, in either case\nauthorized to issue non-assessable policies only and not operating under\nan order of rehabilitation.\n (4) A "holder of a section 1307 agreement" means the holder of an\nagreement executed pursuant to section one thousand three hundred seven\nof this chapter.\n (b) A domestic mutual insurer may apply to the superintendent for\npermission to convert into a domestic stock property/casualty insurer\ncomplying with the relevant organization and licensing provisions of\narticles twelve and forty-one of this chapter. The application to the\nsuperintendent shall be pursuant to a resolution, adopted by no less\nthan a majority of the entire board of directors, specifying the reasons\nfor and the purposes of the proposed conversion, and the manner in which\nthe conversion is expected to benefit policyholders and the public. A\ncopy of the resolution, together with a statement of its adoption, both\ncertified by the president and secretary, or officers corresponding to\neither of them, and affirmed by them as true under the penalties of\nperjury and under the seal of the mutual insurer, shall accompany the\napplication. The superintendent may thereafter request any additional\ndocuments and information which he may reasonably require. Unless the\nsuperintendent finds that:\n (1) the resolution is defective upon its face;\n (2) the proposed conversion is contrary to law or is not in the best\ninterests of the policyholders or the public; or\n (3) the mutual insurer does not have a surplus to policyholders at\nleast equal to the minimum capital and surplus required to be maintained\nfor a newly organized stock insurer doing the same kinds of insurance,\nin which cases the proposed conversion shall terminate, the\nsuperintendent shall order an examination of the mutual insurer pursuant\nto section three hundred ten of this chapter as of the last day of the\nperiod covered in its latest filed statement. The superintendent may\nalso examine any affiliate of the mutual insurer.\n (c) The superintendent shall also appoint one or more qualified\ndisinterested persons to appraise and report to the superintendent the\nfair market value of the mutual insurer and, to the extent necessary,\nits affiliates, on the basis of its latest filed annual or quarterly\nstatement, and of any significant subsequent developments. Such persons\nshall consider the assets and liabilities of the mutual insurer and any\nfactors bearing on the value of the mutual insurer or its affiliates.\nThe appraisers shall receive reasonable compensation and be reimbursed\nfor reasonable expenses incurred in discharging their duties. They may,\nas necessary, employ consultants to advise them on any technical\nmatters.\n (d) The superintendent shall make copies of such examination report\nand appraisal report available to the board of directors within fifteen\ndays of his receipt of the reports. After receiving such reports the\nsuperintendent may grant or deny permission to
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