521A.14 Mutual insurance holding companies. 1. a. A domestic mutual insurance company, upon approval of the commissioner, may reorganize by forming an insurance holding company based upon a mutual plan andcontinuing the corporate existence of the reorganizing insurance company as a stockinsurance company. The commissioner, after a public hearing as provided in section 521A.3,subsection 4, paragraph 'b', if satisfied that the interests of the policyholders are properlyprotected and that the plan of reorganization is fair and equitable to the policyholders, mayapprove the proposed plan of reorganization and may require as a condition of approval suchmodifications of the proposed plan of reorganization as the commissioner finds necessaryfor the protection of the policyholders’ interests. The commissioner may retain consultantsas provided in section 521A.3, subsection 4, paragraph 'd'. A reorganization pursuant to thissection is subject to section 521A.3, subsections 1, 2, and 3. The commissioner shall retainjurisdiction over a mutual insurance holding company organized pursuant to this section toassure that policyholder interests are protected. b. 3, subsections 1, 2, and 3. The commissioner shall retainjurisdiction over a mutual insurance holding company organized pursuant to this section toassure that policyholder interests are protected. b. All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of thepolicyholders of the reorganized insurance company shall become membership interestsin the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance withthe articles of incorporation and bylaws of the mutual insurance holding company. Themutual insurance holding company shall at all times own a majority of the voting shares ofthe capital stock of the reorganized insurance company. 2. a. A domestic mutual insurance company, upon the approval of the commissioner, may reorganize by merging its policyholders’ membership interests into a mutual insuranceholding company formed pursuant to subsection 1 and continuing the corporate existenceof the reorganizing insurance company as a stock insurance company subsidiary of interests into a mutual insuranceholding company formed pursuant to subsection 1 and continuing the corporate existenceof the reorganizing insurance company as a stock insurance company subsidiary of themutual insurance holding company. The commissioner, after a public hearing as provided insection 521A.3, subsection 4, paragraph 'b', if satisfied that the interests of the policyholdersare properly protected and that the merger is fair and equitable to the policyholders, mayapprove the proposed merger and may require as a condition of approval such modificationsof the proposed merger as the commissioner finds necessary for the protection of thepolicyholders’ interests. The commissioner may retain consultants as provided in section521A.3, subsection 4, paragraph 'd'. A merger pursuant to this section is subject to section521A.3, subsections 1, 2, and 3. The commissioner shall retain jurisdiction over the mutualinsurance holding company organized pursuant to this section to assure that policyholderinterests are protected. b. All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. ion to assure that policyholderinterests are protected. b. All of the initial shares of the capital stock of the reorganized insurance company shall be issued to the mutual insurance holding company. The membership interests of thepolicyholders of the reorganized insurance company shall become membership interestsin the mutual insurance holding company. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with thearticles of incorporation and bylaws of the mutual insurance holding company. The mutualinsurance holding company shall at all times own a majority of the voting shares of thecapital stock of the reorganized insurance company. A merger of policyholders’ membershipinterests in a mutual insurance company into a mutual insurance holding company shall bedeemed to be a merger of insurance companies pursuant to chapter 521 and chapter 521 isalso applicable. c. A foreign mutual insurance company, or a foreign health service corporation, which if a domestic corporation would be organized under chapter 514, may reorganize uponthe approval of the commissioner and in compliance with the requirements of any law ealth service corporation, which if a domestic corporation would be organized under chapter 514, may reorganize uponthe approval of the commissioner and in compliance with the requirements of any law orregulation which is applicable to the foreign mutual insurance company or foreign healthservice corporation by merging its policyholders’ or subscribers’ membership interests intoa mutual insurance holding company formed pursuant to subsection 1 and continuing thecorporate existence of the reorganizing foreign mutual insurance company or reorganizingforeign health service corporation as a foreign stock insurance company subsidiary of the Sat Dec 23 00:52:41 2023 Iowa Code 2024, Section 521A.14 (26, 0) §521A.14, INSURANCE HOLDING COMPANY SYSTEMS 2 mutual insurance holding company. The commissioner, after a public hearing as providedin section 521A.3, subsection 4, paragraph 'b', may approve the proposed merger. Thecommissioner may retain consultants as provided in section 521A.3, subsection 4, paragraph'd'. A merger pursuant to this paragraph is subject to section 521A.3, subsections 1, 2,and 3. sed merger. Thecommissioner may retain consultants as provided in section 521A.3, subsection 4, paragraph'd'. A merger pursuant to this paragraph is subject to section 521A.3, subsections 1, 2,and 3. The reorganizing foreign mutual insurance company or reorganizing foreign healthservice corporation may remain a foreign company or foreign corporation after the merger,and may be admitted to do business in this state. A foreign mutual insurance company orforeign mutual health service corporation which is a party to the merger may at the sametime redomesticate in this state by complying with the applicable requirements of this stateand its state of domicile. The provisions of paragraph 'b' shall apply to a merger authorizedunder this paragraph, except that a reference to policyholders in that paragraph is alsodeemed to include subscribers in the case of a health service corporation. 3. A mutual insurance holding company resulting from the reorganization of a domestic mutual insurance company organized under chapter 491 shall be incorporated pursuant tochapter 491. This requirement shall supersede any conflicting provisions of section 491.1.The articles of incorporation and any ce company organized under chapter 491 shall be incorporated pursuant tochapter 491. This requirement shall supersede any conflicting provisions of section 491.1.The articles of incorporation and any amendments to such articles of the mutual insuranceholding company shall be subject to approval of the commissioner in the same manner asthose of an insurance company. 4. A mutual insurance holding company is deemed to be an insurer subject to chapter 507C and shall automatically be a party to any proceeding under chapter 507C involving aninsurance company which as a result of a reorganization pursuant to subsection 1 or 2 is asubsidiary of the mutual insurance holding company. In any proceeding under chapter 507Cinvolving the reorganized insurance company, the assets of the mutual insurance holdingcompany are deemed to be assets of the estate of the reorganized insurance company forpurposes of satisfying the claims of the reorganized insurance company’s policyholders. Amutual insurance holding company shall not dissolve or liquidate without the approval of thecommissioner or as ordered by the district court pursuant to chapter 507C. 5. a. company’s policyholders. Amutual insurance holding company shall not dissolve or liquidate without the approval of thecommissioner or as ordered by the district court pursuant to chapter 507C. 5. a. Chapters 508B and 515G are not applicable to a reorganization or merger pursuant to this section. b. Chapter 508B is applicable to demutualization of a mutual insurance holding company which resulted from the reorganization of a domestic mutual life insurance companyorganized under chapter 508 as if it were a mutual life insurance company. c. Chapter 515G is applicable to demutualization of a mutual insurance holding company which resulted from the reorganization of a domestic mutual property and casualty insurancecompany organized under chapter 515 as if it were a mutual property and casualty insurancecompany. 6. A membership interest in a domestic mutual insurance holding company shall not constitute a security as defined in section 502.102. 7. a. The majority of the voting shares of the capital stock of the reorganized insurance company, which is required by this section to be at all times owned by a mutual insuranceholding company, shall not be conveyed, transferred, assigned, the capital stock of the reorganized insurance company, which is required by this section to be at all times owned by a mutual insuranceholding company, shall not be conveyed, transferred, assigned, pledged, subjected to asecurity interest or lien, encumbered, or otherwise hypothecated or alienated by the mutualinsurance holding company or intermediate holding company. Any conveyance, transfer,assignment, pledge, security interest, lien, encumbrance, or hypothecation or alienation of,in or on the majority of the voting shares of the reorganized insurance company which isrequired by this section to be at all times owned by a mutual insurance holding company,is in violation of this section and shall be void in inverse chronological order of the dateof such conveyance, transfer, assignment, pledge, security interest, lien, encumbrance, orhypothecation or alienation, as to the shares necessary to constitute a majority of suchvoting shares. The majority of the voting shares of the capital stock of the reorganizedinsurance company which is required by this section to be at all times owned by a mutualinsurance holding company shall not be subject to execution and levy as provided in tal stock of the reorganizedinsurance company which is required by this section to be at all times owned by a mutualinsurance holding company shall not be subject to execution and levy as provided in chapter626. The shares of the capital stock of the surviving or new company resulting from amerger or consolidation of two or more reorganized insurance companies or two or moreintermediate holding companies which were subsidiaries of the same mutual insuranceholding company are subject to the same requirements, restrictions, and limitations as Sat Dec 23 00:52:41 2023 Iowa Code 2024, Section 521A.14 (26, 0) provided in this section to which the shares of the merging or consolidating reorganizedinsurance companies or intermediate holding companies were subject by this section priorto the merger or consolidation. b. As used in this section, 'majority of the voting shares of the capital stock of the reorganized insurance company' means shares of the capital stock of the reorganizedinsurance company which carry the right to cast a majority of the votes entitled to be castby all of the outstanding shares of the capital stock of the reorganized insurance companyfor the election of nsurance company which carry the right to cast a majority of the votes entitled to be castby all of the outstanding shares of the capital stock of the reorganized insurance companyfor the election of directors and on all other matters submitted to a vote of the shareholdersof the reorganized insurance company. The ownership of a majority of the voting sharesof the capital stock of the reorganized insurance company which are required by thissection to be at all times owned by a parent mutual insurance holding company includesindirect ownership through one or more intermediate holding companies in a corporatestructure approved by the commissioner. However, indirect ownership through one or moreintermediate holding companies shall not result in the mutual insurance holding companyowning less than the equivalent of a majority of the voting shares of the capital stock ofthe reorganized insurance company. The commissioner shall have jurisdiction over an intermediate holding company as if it were a mutual insurance holding company. As used inthis section, 'intermediate holding company' means a holding company which is a subsidiaryof a mutual insurance holding company, and which either it were a mutual insurance holding company. As used inthis section, 'intermediate holding company' means a holding company which is a subsidiaryof a mutual insurance holding company, and which either directly or through a subsidiaryintermediate holding company has one or more subsidiary reorganized insurance companiesof which a majority of the voting shares of the capital stock would otherwise have beenrequired by this section to be at all times owned by the mutual insurance holding company. 95 Acts, ch 185, §44, 48; 96 Acts, ch 1014, §1, 2; 2009 Acts, ch 145, §52; 2012 Acts, ch 1023, §157 Referred to in §505.23, 521.1, 521I.1 Sat Dec 23 00:52:41 2023 Iowa Code 2024, Section 521A.14 (26, 0)
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