40-19c02. Merger or consolidation; application and approval by insurance commissioner; penalties.
40-19c02
40-19c02. Merger or consolidation; application and approval by insurancecommissioner; penalties.(a) Any nonprofit hospital service corporation organized under the mutualnonprofit hospital service corporation act or nonprofit medical servicecorporation organized under the nonprofit medical service corporation act may:
(1) Merge or consolidate with any other nonprofit medical or hospitalservice corporation as hereinafter provided;
(2) merge or consolidate with any other nonprofit medical or hospitalservice corporation which is authorized to do business in this state if suchmerger or consolidation is authorized by the laws of the state or territoryin which such nondomestic nonprofit medical or hospital service corporationis organized as hereinafter provided;
(3) by virtue of such merger or consolidation, do the kinds of businessin the manner and for the purposes for which a nonprofit medical or hospitalservice corporation or a combination thereof, may be organized in this stateor in the manner and for the purposes for which a nonprofit medical or hospitalservice corporation, or both, may be licensed or authorized to do businessin this state.
(b) Such merger or consolidation shall be made under the conditions, provisions,and restrictions, and with the powers herein set forth to wit: The directorsof each corporation shall enter into a joint agreement, under the corporateseal of each corporation for the merger or consolidation of said corporations,prescribing the terms and conditions thereof, the mode of carrying the sameinto effect, the name of the surviving or new corporation, the number andnames of the directors and other officers thereof, and who shall be thefirst directors and officers, and their places of residence, and how andwhen directors and officers shall be chosen, with such other details asrequired by this act and as they shall deem necessary to perfect the saidmerger or consolidation. Said agreement shall not be effective unless thesame shall be approved by the commissioner of insurance in the manner hereinafterprovided.
(c) Upon approval of the agreement of merger or consolidation by the directorsof each of such corporations, as hereinbefore provided, the mergingor consolidating corporations by their officers shall file a verified jointapplication in duplicate for approval with the commissioner of insuranceaccompanied by or containing the following:
(1) Two (2) duplicate originals of the agreement;
(2) affidavits of officers of each of the corporations setting forth thefacts necessary to show that all requirements of law have been complied with;
(3) if the surviving or the new corporation shall be a domestic corporationand any nondomestic corporation is a party to the merger or consolidationand the laws of the state or territory under which such nondomestic corporationis incorporated require approval of a merger or consolidation by an officialof such state or territory, a certificate of approval of such official.If the laws of the domiciliary state or territory of such nondomestic corporationrequire prior or joint approval by the proper supervisory official of thisstate, the Kansas insurance commissioner may act in unison or jointly withthe proper official of such other state in the consideration of the applicationfor approval of the agreement of merger or consolidation;
(4) an instrument appointing the commissioner of insurance and the commissioner'ssuccessor or successors in office the true and lawful attorney of such corporationfor service of process, containing the same provisions and having thesame effect as the instrument required by K.S.A. 40-218, and amendments thereto;
(5) in the case of a merger, if the articles of incorporation of the survivingcorporation are to be amended, such amendments;
(6) in the case of a consolidation, a copy of the articles of incorporationof the new corporation, and if a nondomestic corporation, such articlesto be certified by the public official with whom the original is requiredto be filed in its domiciliary state or territory;
(7) a financial statement of each of the merging or consolidating corporationsas of a date not earlier than thirty (30) days prior to the date of theapplication to merge or consolidate; and
(8) when the application for the approval of the merger or consolidationis filed with the commissioner of insurance for action thereshall also be filed a certificate executed by the president or a vice-presidentand attested by the secretary or an assistant secretary, or the executiveofficers corresponding thereto, and under the corporate seal of each ofthe corporations party to the agreement of merger or consolidation, verifiedby the affidavits of such officers, setting forth all fees, commissionsor other compensations, or valuable considerations paid or to be paid, directlyor indirectly, to any person in any manner securing, aiding, promoting orassisting in any such merger or consolidation.
(d) The commissioner of insurance shall examine the application and accompanyingpapers, and, if the commissioner finds the same to be in accordance withthe provisions of this act and not inconsistent with the laws and the constitutionsof this state and the United States and not injurious to the interests ofthe subscribers and creditors of such corporations, thecommissioner shall endorse approval thereon.
(e) The commissioner of insurance, upon approval or disapproval of saidapplication, shall cause the same to be so endorsed and the entire proceedingsto be filed and recorded in the office of the secretary of state and a copyof the same certified by the secretary of state to be filed in the officeof the commissioner of insurance. Within fifteen (15) days after approvalby the commissioner of insurance, a certified copy of the approved applicationand agreement shall also be filed by the officers of the new or survivingcorporation in the office of the register of deeds in the county whereinthe registered office and home offices of the merging or consolidating corporationswere located and in the county wherein the registered office and home officeof the surviving or new corporation shall be located and in the office ofthe register of deeds of each county in this state in which any of the corporations,parties to the agreement, shall have real property at the time of mergeror consolidation. When approved by the commissioner of insurance, the saidagreement shall be deemed effective and the date when so approved shallbe the date of consolidation or merger of said corporations, and:
(1) The said corporations shall thereupon be one (1) corporation underthe name adopted in and by said agreement, possessing all the rights, privileges,immunities, powers, and franchises theretofore vested in each of them.
(2) The separate existence of all the corporations to the agreement ofmerger or consolidation except the surviving or new corporation shall cease.
(3) All property, real, personal and mixed, and all debts due on whateveraccount, including premiums due from subscribers and all other choses inaction and all and every other interest of, or belonging to or due to, eachof the corporations merged or consolidated shall be deemed to be transferredto and vested in such surviving or new corporation without further act ordeed; and the title to any real estate, or any interest therein, under thelaws of this state vested in any of the corporations shall not revert orbe in any way impaired by reason of such merger or consolidation.
(4) Such surviving or new corporation shall thenceforth be responsibleand liable for all of the liabilities and obligations of each of the corporationsso merged or consolidated; any claim existing or action pending by or againstany of such corporations may be prosecuted to judgment as if such mergeror consolidation had not taken place, or such surviving or new corporationmay be substituted in its place; neither the rights of creditors nor liensupon the property of any of such corporations shall be impaired by suchmerger or consolidation, but such liens shall be limited to the propertyupon which they were liens immediately prior to the time of such mergeror consolidation, unless otherwise provided in the agreement of mergeror consolidation.
(5) In the case of merger, the articles of incorporation of the survivingcorporation shall be supplanted, amended or superseded to the extent, ifany, that any provision or provisions of such articles of incorporationshall be revised in the agreement of merger and the articles of incorporationshall be deemed to be thereby and to that extent amended.
(6) In the case of a consolidation the new articles of incorporation shallbe deemed to be the articles of incorporation of such new corporation.
(7) The surviving or new corporation may, for the purpose of complyingwith the requirements of the law relating to age of a corporation, electto be the age of any of the merging or consolidating corporations and shallfor this purpose be considered as having such age. Such election shall beset forth in the application for approval of the agreement of merger or consolidation.
(8) The surviving or new corporation shall maintain the reserves anddeposits as required by law of other like kinds of corporations doing likekinds of business.
(9) The surviving or new corporation after merger or consolidation shallbe subject to the same fees, taxes, or penalties and other requirementsof law as other like kinds of corporations doing like kinds of business.
(f) (1) No director or officer of any corporation party to a merger orconsolidation, except as fully expressed in the agreement of merger or consolidation,shall receive any fee, commission, other compensation or valuable consideration,whatever, directly or indirectly, for in any manner aiding, promoting orassisting in such merger or consolidation.
(2) Any person violating the provisions of paragraph (1) of subsection(f) shall be fined not less than onethousand dollars ($1,000), and not more than five thousand dollars ($5,000)or imprisoned in the county jail for not more than one (1) year, or both,and shall forfeit any office such person holds in the merged or consolidatedcorporation.
(g) Nothing contained in this section shall be construed to enlarge thecharter powers of any nonprofit medical or nonprofit hospital service corporationexcept in conformity with the provisions of the proposed articles of incorporationof the merged or consolidated corporation as provided in this act, nor toauthorize any such corporation to do any kind of business not authorizedby its charter or articles of incorporation, nor to authorize any such corporationto do any kind of business in this state not authorized by its license orcertificate of authority to do business in this state.
History: L. 1980, ch. 137, § 20; July 1.