40-1620. Conversion of insurance company into insurance reciprocal; conversion plan requirements; approval; definitions.
40-1620
40-1620. Conversion of insurance company intoinsurance reciprocal; conversion plan requirements; approval;definitions.(a) Any insurance company may convert to a Kansas insurancereciprocal in accordance with a plan for the conversion of the insurancecompany into an insurance reciprocal filed with and approved by thecommissioner.
(b) The commissioner may establish reasonable requirements and procedures forthe submission and approval of a conversion plan authorized by subsection (a).
(c) No conversion plan shall be approved under this section unless suchconversion plan includes:
(1) A provision for the conversion of existing stockholder or policyholderinterests in the insurance company into reciprocal or exchange subscriberinterests in the insurance reciprocal so that each subscriber's interest in theresulting Kansas insurance reciprocal shall be fairly proportionate to suchsubscriber'sinterest in the insurance company;
(2) a provision for the amendment of the insurance company's existingarticles of incorporation or other chartering document to a subscriber'sagreement which complies with the provisions of K.S.A. 40-1602, 40-1603 and40-1626 and amendments thereto;
(3) a copy of the proposed subscriber's agreement;
(4) proof of the approval or adoption of the conversion plan by not less than2/3 of the shares or policyholders entitled to vote,represented either inperson or by proxy, at a duly called regular or special meeting of thestockholders or policyholders of the insurance company at which a quorum, asdetermined by the bylaws or other chartering documents of the insurancecompany, is present;
(5) a transition plan for the change of governance of the insurance companyfrom the board of directors and officer structure of the insurance company tothe insurance reciprocal which shall be governed byarticle 16 of chapter 40 of the Kansas Statutes Annotated andamendments thereto; and
(6) any other information required by the commissioner.
(d) The commissioner shall approve the conversion plan if the commissionerfinds that the proposed conversion will:
(1) Not be detrimental to the interests of the stockholders or policyholdersof the insurance company;
(2) not be detrimental to the interests of the state of Kansas; and
(3) not render the insurer incapable of fulfilling the insurer's contractualobligations.
(e) Upon approval of a conversion plan under this section, the commissionershall issue a new or amended certificate of authority, which shall be deemed tobe thefinal act of conversion at which time the insurance company shall concurrentlybecome an insurance reciprocal.The insurance reciprocal shall be deemed to be a continuation of the insurancecompany and deemed to have been organized at the time the converted insurancecompany was organized.
(f) Each insurance reciprocal created pursuant to this section shall complywith all provisions of K.S.A. 40-1612, and amendments thereto.
(g) Any conversion of an insurance company to a reciprocal shall not besubject to the provisions of K.S.A. 40-3304, and amendments thereto.
(h) For the purposes of this section, "insurance company" means a stockor mutual insurancecompany.
History: L. 1999, ch. 110, § 6;L. 2000, ch. 170, § 29; July 1.