15 U.S.C. § 6732 — Redomestication of mutual insurers

(a) Redomestication^* A mutual insurer^* organized under the laws of any State may transfer^* its domicile^* to a transferee domicile^* as part of a reorganization in which, under the laws of the transferee domicile and consistent with subsection (f), the mutual insurer becomes a stock insurer that is a direct or indirect subsidiary of a mutual holding company.

(b) Resulting domicile After complying with the applicable law of the transferee domicile governing transfers of domicile and completing a transfer under this section, the mutual insurer must stop being a domestic insurer in the transferor domicile^*. It continues its corporate existence as a domestic insurer of the transferee domicile.

(c) Licenses preserved The certificate of authority, agents’ appointments and licenses, rates, approvals, and other items that a licensed State^* allows and that exist immediately before the redomesticating insurer^* transfers its domicile under this subchapter must continue in full force and effect after the transfer, if the insurer remains qualified to transact insurance in that licensed State.

(d) Effectiveness of outstanding policies and contracts
(1) In general All outstanding insurance policies and annuity contracts of a redomesticating insurer must remain in full force and effect. They need not be endorsed to show the insurer’s new domicile unless the State insurance regulator^* of a licensed State orders that change. Even then, the order may apply only to outstanding policies and contracts whose owners live in that licensed State.

(2) Forms
(A) Applicable State law^* may require a redomesticating insurer to file new policy forms with the State insurance regulator of a licensed State on or before the transfer’s effective date.

(B) Notwithstanding subparagraph (A), a redomesticating insurer may use existing policy forms with appropriate endorsements showing its new domicile until the State insurance regulator of that licensed State approves the new policy forms for use.

(e) Notice A redomesticating insurer must notify the State insurance regulator of each licensed State about the proposed transfer. It must promptly file any resulting amendments to corporate documents that a foreign licensed mutual insurer must file with the insurance regulator of each licensed State.

(f) Procedural requirements A mutual insurer may not redomesticate to another State and reorganize into a mutual holding company under this section unless the State insurance regulator of the transferee domicile determines that the insurer’s reorganization plan includes the following requirements:

(1) Approval by board of directors and policyholders The reorganization is approved by at least a majority of the mutual insurer’s board of directors and at least a majority of the policyholders who vote. Before voting, the policyholders must receive notice, disclosure of the reorganization and its effects on their contractual rights, and a reasonable opportunity to vote. The notice, disclosure, and voting procedures must be approved by the State insurance regulator of the transferee domicile.

(2) Continued voting control by policyholders; review of public stock offering After the reorganization is completed, the reorganized insurer’s policyholders must have the same voting rights concerning the mutual holding company that they had concerning the mutual insurer before the reorganization. An initial public offering of stock must comply with applicable securities laws and must be conducted in a manner approved by the State insurance regulator of the transferee domicile.

(3) Award of stock or grant of options to officers and directors During the period provided by the transferee domicile’s law after completion of an initial public offering, or for six months if that law provides no period, neither a stock holding company nor the converted insurer may award stock options or stock grants to people elected as officers or directors of the mutual holding company, the stock holding company, or the converted insurer. This does not cover awards or options to which a person^* is entitled as a policyholder^* and that the State insurance regulator of the transferee domicile approves.

(4) Policyholder rights After reorganization into a mutual holding company, the policyholders’ contractual rights are preserved.

(5) Fair and equitable treatment of policyholders The insurance regulator of the transferee domicile approves the reorganization as fair and equitable to the policyholders.