MCA Chapter 31

MCA Chapter 31
in effect

Miss. Code Ann. § 83-31-1 Formation.

Any number of persons not less than three (3), a majority of whom shall be bona fide residents of this state, by complying with the provisions of this chapter, may become, together with others who may hereafter be associated with them or their successors, a body corporate for the purpose of carrying on the business of mutual insurance as herein provided.

Miss. Code Ann. § 83-31-3 Articles of association.

Any persons proposing to form any such company shall subscribe and acknowledge articles of association specifying: The name, the purpose for which formed, and the location of its principal or home office; The names and addresses of those composing the board of directors in which the management shall be vested until the first meeting of the members; The names and places of residence of the incorporators.

Miss. Code Ann. § 83-31-5 Name must contain the word “mutual.”

No name shall be adopted by such company which does not contain the word “mutual,” or which is so similar to any name already in use by any such existing corporation, company, or association, organized or doing business in the United States, as to be confusing or misleading.

Miss. Code Ann. § 83-31-7 Commissioner of Insurance to approve articles.

Such articles of association shall be submitted to the commissioner of insurance, herein designated “commissioner,” and if prepared in accordance with this chapter, he shall approve and file the same in his office.

Miss. Code Ann. § 83-31-9 Corporate powers.

The company shall have legal existence from the approval and filing of such articles in the office of the commissioner. The board of directors named in such articles may thereupon adopt bylaws and proceed to transact the business of such company, provided that no insurance shall be put into force until the company has been licensed to transact insurance as provided by this chapter. The company shall have succession for the time limited in its articles of association; may determine the manner of calling and conducting the meetings and the mode of voting by proxy; may elect all necessary officers and prescribe the duties and tenure of officers; may sue and be sued and prosecute and be prosecuted to judgment and satisfaction before any court; may have a corporate seal; may contract and be contracted with within the limits of its corporate powers; may buy, hold and sell real estate and personal property; may borrow money and secure the payment of same by mortgage or otherwise.

Miss. Code Ann. § 83-31-10 Existence in perpetuity; extension of time of life to perpetuity.

Whenever the period of existence of a mutual insurance company created with a life of fifty (50) years expires before March 4, 1993, then every such mutual company that continues to do business for ninety (90) days after March 4, 1993, by the doing of such business shall be deemed to have accepted an extension of the time of life of such mutual company to that of perpetuity. Such mutual company shall continue in existence as a de jure mutual company as fully and completely as if the articles of association had been thus amended before the end of the original fifty-year period. Likewise, whenever the period of existence of a mutual company created for a period of fifty (50) years expires hereafter, if such mutual company continues to do business thereafter for a period of ninety (90) days, the same shall operate as an acceptance of an extension of time of the life of such mutual company to that of perpetuity. Such mutual company shall continue in existence as a de jure mutual company as fully and completely as if the articles of association had been thus amended before the end of the original fifty-year period. When a mutual insurance company amends its articles of association in accordance with this section, it shall file within ninety (90) days thereafter in the Office of the Commissioner of Insurance a copy of the amended articles of association to show the extension of the time of life of such mutual company. This section shall in no way nullify any suit or claim accrued or to accrue before March 4, 1993.

Miss. Code Ann. § 83-31-11 Kind of insurance authorized.

Any company organized under the provisions of this chapter is empowered and authorized to make contracts of insurance or to reinsure or accept reinsurance, or any portion thereof, to the extent specified in its articles of association for the kinds of insurance following: Fire insurance. — Against loss or damage to property and loss of use and occupancy by fire, lightning, hail, tempest, flood, earthquake, frost or snow, explosion, fire ensuing, and explosion, no fire ensuing, except explosion by steam boilers or flywheel; against loss or damage by water caused by the breakage or leakage of sprinklers, pumps, or other apparatus, water pipes, plumbing, or their fixtures, erected for extinguishing fires, and against accidental injury to such sprinklers, pumps, other apparatus, water pipes, plumbing, or fixtures; against the risks of inland transportation and navigation; upon automobiles, whether stationary or operated under their own power, against loss or damage by any of the causes or risks specified in this subsection, including also transportation, collision, liability, for damage to property resulting from owning, maintaining, or using automobiles, and including burglary and theft but not including loss or damage by risk of bodily injury to the person. Liability insurance. — Against loss, expense, or liability by risk of bodily injury to death by accident, disability, sickness, or disease suffered by others for which the insured may be liable or have assumed liability, including workman’s compensation. Disability insurance. — Against bodily injury or death by accident and disability by sickness. Automobile insurance. — Against any or all loss, expense, and liability resulting from the ownership, maintenance, or use of any automobile or other vehicle, provided no policies shall be issued under this subsection against the hazard of fire alone. Steam boiler insurance. — Against loss or liability to persons or property resulting from explosions or accidents to boilers, containers, pipes, engines, flywheels, elevators, and machinery in connection therewith, and against loss of use and occupancy caused thereby, and to make inspection and issue certificates of inspection thereon. Use and occupancy insurance. — Against loss from interruption of trade or business which may be the result of any accident or casualty. Life insurance. — To carry on the business commonly known as life insurance on the mutual plan, or disability insurance; to contract for the payment of endowments or annuities, or make and enter into such other contracts conditioned upon the continuance or cessation of human life. Miscellaneous insurance. — Against loss or damage by any hazard upon any risk not provided for in this section, which is not prohibited by statute or at common law from being the subject of insurance.

Miss. Code Ann. § 83-31-13 May reinsure certain risks.

A mutual company transacting fire, casualty, or multiple line insurance business under the laws of this state, with the approval of the commissioner of insurance, may reinsure all risks undertaken by it in any company authorized to transact a similar class of insurance business in this state, and may transfer to the company assuming such risks all or such of its assets, reserves, liabilities, and obligations of every character as the agreement approved by the commissioner shall provide. This section shall not prevent such a company from reinsuring any risks or fractional parts thereof, not situated in this state, in any company licensed by the state in which such risks are located.

Miss. Code Ann. § 83-31-15 Fraternal societies may be converted.

Any fraternal benefit society organized under the laws of this state may be converted into a mutual life or mutual life and disability insurance company, so as to come within the provisions of all laws governing mutual companies and operate under this chapter upon the terms and conditions as follows: Whenever the supreme governing legislative body of any fraternal benefit society incorporated under the laws of this state shall, by two-thirds (2/3) vote, determine that a change or conversion from a fraternal benefit society to a regular mutual life or disability insurance company shall be to the best interests of the society and its members, or whenever a majority of the members in good standing of any such domestic fraternal benefit society shall, in writing, signify their desire for such conversion, then, in either event, said fraternal benefit society may adopt and file with the insurance commissioner of Mississippi an amendment to its articles of incorporation, authorizing it to be converted from a fraternal to a domestic mutual life or disability insurance company; and said amendment shall become operative upon its approval by and filing with the insurance commissioner, unless a later time be provided in said amendment. If the amendment is approved by the insurance commissioner, he shall issue his certificate of approval in writing. Thereafter the company shall have legal existence as a domestic mutual life or disability insurance company, may reorganize by the election of a board of directors and the adoption of bylaws, and proceed to transact the business of such company in accordance with and be subject to all of the terms and provisions of this chapter governing mutual companies. Provided, however, that no such conversion from a fraternal benefit society to a regular mutual life or disability insurance company shall be had unless written notice of such proposed change be deposited in the United States mail, registered and postage prepaid, to each member of such fraternal benefit society at his last known post office address at least ninety (90) days before the proposed change or conversion is to be acted upon by said supreme governing body; but the notice provided herein shall not apply to or be required of any fraternal benefit society whose district councils, or state or division grand lodges composed of delegates from branch councils or subordinate lodges, have by a two-thirds (2/3) vote already authorized or instructed its national council or supreme legislative governing body to change or convert their society into said mutual life and disability company before April 10, 1924.

Miss. Code Ann. § 83-31-17 Principal office.

Any mutual life insurance company may acquire, own, or maintain a principal office, by and with the written consent of the insurance commissioner, in any state in which said company is admitted to do business, and may provide that the meetings of its board of directors or governing body may be held at said principal office. All business transacted at said principal office shall be as valid in all respects as if the meetings of the board of directors or governing body were held in this state.

Miss. Code Ann. § 83-31-19 Certain companies not affected.

The provisions of this chapter shall not apply to foreign mutual reserve insurance companies doing business in this state upon the legal reserve plan.

Miss. Code Ann. § 83-31-21 License.

No such company shall issue policies or transact any business of insurance unless it shall hold a license from the commissioner authorizing the transaction of such business. Such license shall not be issued until and unless the company shall have in paid-up or contributed surplus the amount required in Section 83-19-73.

Miss. Code Ann. § 83-31-23 Corporations and associations may hold policies.

Any public or private corporation, board, or association in this state or elsewhere may make application, enter into agreements for, and hold policies in any such mutual insurance company. Any officer, stockholder, trustee, or legal representative of any such corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of such membership; but shall not be personally liable upon such contract of insurance by reason of acting in such representative capacity. The right of any corporation organized under the laws of this state to participate as a member of any such mutual insurance company is hereby declared to be incidental to the purpose for which such corporation is organized, and as much granted as the rights and powers expressly conferred.

Miss. Code Ann. § 83-31-25 Voting of members.

Every member of the company shall be entitled to one vote, or to a number of votes based upon the insurance in force, the number of policies held, or the amount of premiums paid, as may be provided in the bylaws.

Miss. Code Ann. § 83-31-27 Premiums.

The maximum premium payable by any member shall be expressed in the policy or in the application for the insurance. Such maximum premium may be a cash premium and an additional contingent premium not less than the cash premium, or may be solely a cash premium. No policy shall be issued for a cash premium without an additional contingent premium unless the company has a surplus which is not less in amount than the capital stock required of domestic stock insurance companies transacting the same kind of insurance.

Miss. Code Ann. § 83-31-29 Investment of assets.

No such company shall invest any of its assets except in accordance with the laws of this state relating to the investment of the assets of domestic stock companies transacting the same kind of insurance.

Miss. Code Ann. § 83-31-31 Reserves and unearned premiums.

Such company shall maintain unearned premium and other reserves separately for each kind of insurance, upon the same basis as that required of domestic stock insurance companies transacting the same kind of insurance; provided, that any reserve for losses or claims based upon the premium income shall be computed upon the net premium after deducting any so-called dividend or premium returned or credited to the member.

Miss. Code Ann. § 83-31-33 Deficiency in assets.

Such company not possessed of assets at least equal to the unearned premium reserve and other liabilities shall make an assessment upon its members liable to assessment to provide for such deficiency, such assessment to be against each such member in proportion to such liability as expressed in his policy. The commissioner may, by written order, relieve the company from an assessment or other proceedings to restore such assets during the time fixed in such order.

Miss. Code Ann. § 83-31-35 Money advanced by officers or members.

Any director, officer, or member of any such company, or any other person, may advance to such company any sum or sums of money necessary for the purpose of its business or to enable it to comply with any of the requirements of the law. Such moneys and such interest thereon as may have been agreed upon, not exceeding ten percent (10%) per annum, shall not be a liability or claim against the company or any of its assets, except as herein provided, and shall be repaid only out of the surplus earnings of such company. No commission nor promotion expenses shall be paid in connection with the advance of any such money to the company, and the amount of such advance shall be reported in each annual statement.

Miss. Code Ann. § 83-31-37 Delivery of policies through licensed agents.

Such mutual company shall comply with the provisions of any law applicable to any stock insurance companies effecting the same kind of insurance requiring that policies be countersigned and delivered through a licensed agent. This requirement shall not apply to any policy of such mutual company on which no commission shall be paid to any local agent. Such mutual company may insert, in any form of policy prescribed by the law of this state, such provisions or conditions required by its plan of insurance which are not inconsistent or in conflict with any law of this state. Such policy, in lieu of conforming to the language and form prescribed by such law, may conform thereto in substance, if such policy includes a provision or endorsement reciting that the policy shall be construed as if in the language and form prescribed by such law, and a copy of such policy and endorsement, if any, shall have been first filed with and shall not have been disapproved by the commissioner.

Miss. Code Ann. § 83-31-39 Admission of foreign mutual companies.

Any mutual insurance company organized outside of this state and authorized to transact the business of insurance on the mutual plan in any state, district, or territory, except foreign mutual life insurance companies doing business upon the legal reserve plan, shall be admitted and licensed to transact the kinds of insurance authorized by its charter or articles of association to the extent and with the powers and privileges specified in this chapter when it shall be solvent under this chapter and shall have complied with the following requirements: Filed with the commissioner a certified copy of its charter or articles of association; Filed with the commissioner a copy of its bylaws certified to by its secretary; Appointed the commissioner its agent for the service of process in any action, suit, or proceedings in any court of this state, which authority shall continue as long as any liability shall remain outstanding in this state; Filed a financial statement under oath, in such form as the commissioner may require, and have complied with other provisions of law applicable to the filing of papers and furnishing information by stock companies on application for authority to transact the same kind of insurance. If organized without the United States, make and maintain the deposit required of stock insurance companies formed without the United States transacting the same kind of insurance. Upon compliance by any such foreign company with the provisions in this section, such company shall be licensed and authorized to transact business in this state, subject to all the provisions of law relating to information to and examinations by the commissioner, annual reports, taxes, and the renewal of license applicable to stock insurance companies transacting the same kind of insurance, except as otherwise provided in this chapter.

Miss. Code Ann. § 83-31-41 Annual reports.

Every such mutual insurance company shall make its annual report in such form and submit to such examinations as may be required by the commissioner of insurance. As far as practicable, such examinations of foreign mutual insurance companies shall be made in co-operation with the insurance departments of other states, and the forms of annual report shall be such as are in general use throughout the United States.

Miss. Code Ann. § 83-31-43 Applicability of other laws.

Except as expressly exempted by this chapter, all mutual companies organized or admitted to do business in this state shall be subject to any and all other laws of this state governing insurance companies. All laws enacted whereby the Commissioner of Insurance of the State of Mississippi is granted general authority as to reports, audits, regulations, supervisions, reorganizations or liquidations shall be applicable to all public and private corporations, boards or associations organized under the provisions of this title and chapter regardless of any provisions of law or statute to the contrary.

Miss. Code Ann. § 83-31-45 Taxation of premium receipts.

The taxable premium or premium receipts of any mutual insurance company organized or admitted in this state under this chapter for the purpose of taxation under any law of this state shall be the gross premiums received for direct insurance upon property or risks in this state, deducting premiums upon policies not taken and premiums returned on cancelled policies and also any refund or return made to the policyholder other than for loss. Such mutual insurance companies shall pay into the State Treasury through the State Tax Commission a premium tax in accordance with the provisions of Section 27-15-103 et seq. In the event that the Mississippi Supreme Court or another court finally adjudicates that any tax levied prior to July 1, 1985, under the provisions of this section was collected unconstitutionally and that a liability for a credit or refund for such collection has accrued, then the rate of tax set forth above shall be increased to four percent (4%) for a period of six (6) years beginning July 1 following such adjudication.

Miss. Code Ann. § 83-31-47 Merger with foreign mutual insurance company.

A domestic mutual insurance company may effect a merger with one or more domestic mutual insurance companies, or with one or more foreign mutual insurance companies, if such merger is authorized by the laws of the state under which each such foreign company is organized. The Commissioner of Insurance shall review and approve the plan to merge the mutual insurance companies before submission of the plan to the eligible members for their consideration and vote. The plan must be approved by two-thirds (2/3) of those eligible members who vote in person or by proxy at a duly called eligible members’ meeting to consider the plan of merger. The commissioner may require mutual companies to comply with appropriate requirements as that analogous to those of a stock company merger under Sections 83-6-24 and 83-19-99.

Miss. Code Ann. § 83-31-101 Short title.

The provisions of Sections 83-31-101 through 83-31-181 may be cited as the “Mississippi Mutual Insurance Company Conversion, Reorganization and Merger Act.”

Miss. Code Ann. § 83-31-103 Definitions.

As used in Sections 83-31-101 through 83-31-143, the following terms shall have the meaning ascribed herein unless the context indicates otherwise: “Conversion plan” means a plan adopted under Sections 83-31-101 through 83-31-143 by the board of directors of a domestic mutual insurance company to convert the mutual insurance company into a stock company. “Converted stock company” means a domestic stock insurance company that has converted under Sections 83-31-101 through 83-31-143 from a domestic mutual insurance company. “Eligible member” means a member of a mutual insurance company whose policy is in force on the date that the mutual insurance company’s board of directors adopts a conversion plan. The term does not include a person whose policy becomes effective after the date that the board of directors adopts the conversion plan but before the conversion plan’s effective date. “Mutual insurance company” means a domestic mutual insurance company formed under Section 83-31-1 et seq. except for domestic mutual insurance companies that have active life insurance or annuities products in force. “Participating policy” means a policy that grants a holder the right to receive dividends or other distributions if, as and when, declared by the mutual insurance company that issued such policy. “Stock company” means a domestic stock insurance company subject to Section 83-19-1 et seq.

Miss. Code Ann. § 83-31-105 Conversion plan adoption and approval.

A mutual insurance company that seeks to convert to a stock company must adopt, by the affirmative vote of not less than two-thirds (2/3) of the members of its board of directors, a conversion plan consistent with the requirements of Sections 83-31-101 through 83-31-143. A mutual insurance company may not engage in the business of insurance as a stock company until it complies with the requirements of Sections 83-31-101 through 83-31-143. Before the eligible members of a mutual insurance company may vote on approval of a conversion plan, the mutual insurance company must comply with Section 83-31-107 and other applicable requirements under Sections 83-31-101 through 83-31-143.

Miss. Code Ann. § 83-31-107 Commissioner approval of conversion plan; public hearings.

Not later than the ninetieth day after the date on which a mutual insurance company’s board of directors adopts a conversion plan, the company shall file with the commissioner: A copy of the conversion plan, including the documents relating to the conversion plan; The independent evaluation of a pro forma market value required by Section 83-31-121(2); The form of notice required by Section 83-31-111; The form of proxy to be solicited from eligible members under Section 83-31-113(2); The form of notice required by Section 83-31-129(3) to persons whose policies are issued after adoption of the conversion plan but before the effective date of the conversion plan; An audited financial statement prepared on a statutory basis in accordance with the insurance laws of the State of Mississippi, including an actuarial opinion for the most recent calendar year ended, or a copy thereof, if the statement was previously filed with the commissioner; The proposed amended or restated articles of association of the converted stock company, which shall include a change of the name of the company to delete the word “mutual” from the name of such company and proposed amended or restated bylaws of such company; A statement regarding acquisition of control, if applicable, as required by Section 83-6-1 et seq.; and Any other information as required under rules or regulations or as requested by the commissioner. Except as otherwise provided by this subsection, the commissioner shall approve or disapprove a conversion plan not later than the ninetieth day after the first day on which all the documents and other information required under subsection (1) of this section are filed with the commissioner. The commissioner may not extend the time for approval or disapproval beyond the ninety-day time period unless he finds it necessary to retain a qualified expert in accordance with subsection (4) of this section, in which case he may extend the time for review for an additional sixty (60) days beyond the initial ninety-day period. Notwithstanding the stated time limits herein, the commissioner may extend the time for approval or disapproval for an additional thirty (30) days beyond the date on which any amendment to such plan is filed with the commissioner. The commissioner shall, within five (5) days of approving or disapproving a conversion plan, give written notice to the mutual insurance company of the commissioner’s decision and, in the event of disapproval, a detailed statement of the reasons for the adverse decision. If a plan is disapproved, then the conversion plan may be amended and resubmitted to the commissioner for his approval or disapproval as provided in Sections 83-31-101 through 83-31-143. If the commissioner disapproves the plan, then the mutual insurance company may appeal the commissioner’s decision as provided by the laws of this state to the Chancery Court of the First Judicial District of Hinds County, Mississippi. The commissioner shall approve a conversion plan if the commissioner finds that the conversion plan complies with Sections 83-31-101 through 83-31-143, the conversion plan’s method of allocating subscription rights or other value is fair and equitable and the conversion plan is otherwise fair and equitable to members and policyholders, and the converted stock company would satisfy the requirements applicable to a domestic stock company; however, the commissioner may not approve such a conversion plan and shall disapprove such a plan if the commissioner finds that (a) the effect of the conversion plan would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein; (b) the financial condition of any party to the conversion plan is such as might jeopardize the financial stability of the insurers which are parties to the plan or prejudice the interests of their policyholders; (c) the conversion plan or the plans for operation of the parties to the conversion plan following implementation of the conversion plan are not in the public interest; (d) the competence, experience and integrity of those persons who would control the operations of the parties to the conversion plan are such that it would not be in the interest of policyholders of the parties to the conversion plan or of the public to permit the conversion plan; (e) the conversion plan’s method of allocating subscription rights or other value is not fair and equitable; (f) the conversion plan is not fair and equitable to the members and policyholders; (g) implementation of the conversion plan is likely to be hazardous or prejudicial to the insurance buying public; or (h) the conversion unfairly enriches the officers and directors of the converting insurer. The commissioner may retain, at the mutual insurance company’s expense, a qualified expert or experts, including but not limited to appraisers, actuaries, accountants and attorneys, not otherwise a part of the commissioner’s staff to assist the commissioner in reviewing the conversion plan and the independent evaluation of the pro forma market value required under Section 83-31-121(2). The commissioner may hold a public hearing to allow comment on the conversion plan after giving written notice to the mutual insurance company and other interested persons, all of whom have the right to appear at the hearing. Notice to interested persons who have not filed an appearance in the matter may be made in any reasonable manner deemed appropriate by the commissioner with the costs thereof assessed to the mutual insurance company.

Miss. Code Ann. § 83-31-109 Notice to eligible members and comments; amendment and termination of plan.

The conversion plan may be: Amended by a vote of two-thirds (2/3) of the members of the board of directors of the applicant in response to the comments or recommendations of the commissioner or any other state or federal agency or governmental entity before any solicitation of proxies from members of the mutual insurance company to vote on the conversion plan or at any time with the consent of the commissioner, except that any material amendment after the members’ approval shall require the members’ approval; or Terminated by a vote of two-thirds (2/3) of the members of the board of directors of the applicant at any time before members of the mutual insurance company vote on the conversion plan and, otherwise, at any time with the consent of the commissioner. Within twenty (20) business days after filing with the commissioner the documents required under Section 83-31-107(1), the mutual insurance company shall send to each eligible member a notice advising the eligible member of the adoption and filing of the conversion plan and of the member’s right to provide to the commissioner and the mutual insurance company comments on the plan. As an alternative to the notice required under paragraph (a) of this subsection, the mutual insurance company may use any other means which is reasonably designed to provide notice to eligible members and which alternative means of providing notice is approved by the commissioner. The notice required under paragraphs (a) or (b) of this subsection shall include a description of the procedure to be used in making comments. An eligible member who elects to make comments must make the comments in writing (a) if notice is sent to each eligible member, not later than the thirtieth day after the date on which the notice is sent; or (b) if an alternative means of providing notice is approved by the commissioner, not later than such date for receipt of comments approved by the commissioner.

Miss. Code Ann. § 83-31-111 Member meeting notice for voting on conversion plan.

Within sixty (60) days after the commissioner’s approval of the plan, the mutual insurance company shall send to each eligible member notice of the members’ meeting to vote on the conversion plan. The notice must be sent to the member’s last known address, as shown on the mutual insurance company’s records, before the thirtieth day preceding the date set for the meeting. The notice shall: Briefly but fairly describe the material terms and provisions of the proposed conversion plan; and Inform the member of the member’s right to vote on the conversion plan. If the meeting to vote on the conversion plan is held during the mutual insurance company’s annual meeting of policyholders, only a combined meeting notice is required.

Miss. Code Ann. § 83-31-113 Member votes on plan and amending or restating articles of association.

A conversion plan is adopted on receiving the affirmative vote of at least two-thirds (2/3) of the votes cast in person or by proxy by eligible members at a duly convened meeting to consider the plan of conversion. Members entitled to vote on the proposed conversion plan may vote in person or by proxy. The number of votes each eligible member may cast shall be determined by the mutual insurance company’s bylaws. If the bylaws are silent, each eligible member may cast one (1) vote. At the meeting held to vote on the conversion plan, the members shall also consider the adoption of amended or restated articles of association. Adoption of the amended or restated articles requires the affirmative vote of at least two-thirds (2/3) of the votes cast in person or by proxy by eligible members.

Miss. Code Ann. § 83-31-115 Filing minutes concerning member plan adoption meeting.

Not later than the thirtieth day after the date on which the eligible members adopt the conversion plan at a duly convened meeting, the converted stock company shall file with the commissioner the minutes of the meeting of the eligible members at which the conversion plan was adopted.

Miss. Code Ann. § 83-31-117 Conversion plan requirements; effect on existing policies; nonparticipating policies.

Each conversion plan must include the provisions required by Sections 83-31-101 through 83-31-143 and by any rules or regulations adopted by the commissioner. Each policy in effect on the effective date of the conversion remains in effect under the terms of that policy, except that the following rights, to the extent they existed in the mutual insurance company, are extinguished on the effective date of the conversion: Any voting rights of policyholders provided under the policy; Except as provided in subsection (3) of this section, a right to share in the surplus or profits of the mutual insurance company; and Any assessment provisions provided under the policy. Except as otherwise provided by Section 83-31-143, the holder of a participating policy in effect on the date of the conversion continues to have a right to receive dividends or distributions as provided by the participating policy. Except for the mutual insurance company’s guaranteed renewable accident and health policies and guaranteed renewable, noncancellable accident and health policies, on the renewal date of a participating policy, the converted stock company may issue the insured a nonparticipating policy as a substitute for the participating policy on such terms and conditions and on such policy forms as shall be approved by the commissioner.

Miss. Code Ann. § 83-31-119 Subscription rights and alternatives.

Except for an alternative plan under Section 83-31-127, each conversion plan must specify the subscription rights of eligible members. The plan must include a provision that: Each eligible member is to receive, without payment by the member, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company, including a method for determining the number of shares which may be purchased; and In the aggregate, all eligible members have the right, before the right of any other party, to purchase one hundred percent (100%) of the capital stock of the converted stock company; however, that such plan may provide for the sale or distribution of capital stock to the holders of surplus notes, if any, but only upon such terms and conditions as may be approved by the commissioner. As an alternative to subscription rights in the converted stock company, the conversion plan may provide that each eligible member is to receive, without payment by the member, nontransferable subscription rights to purchase a portion of the capital stock of one of the following: A corporation organized for the purpose of purchasing and holding all the stock of the converted stock company; A stock insurance company owned by the mutual insurance company into which the mutual insurance company is to be merged; or An unaffiliated stock insurance company or other corporation that is to purchase all the stock of the converted stock company. The conversion plan must provide that the subscription rights are allocated in whole shares among the eligible members using a fair and equitable method, with such exceptions and other terms and conditions as the commissioner may approve. The method may consider, but is not required to consider, how the different classes of policies of the eligible members contributed to the surplus of the mutual insurance company or any other factors that may be fair or equitable as determined by the board of directors. The conversion plan must provide a fair and equitable means for allocating shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights under this section. Notwithstanding any other provision of Sections 83-31-47 or 83-31-101 through 83-31-181 to the contrary, no officer, director or employee of any insurer reorganizing under any provision of Sections 83-31-47 or 83-31-101 through 83-31-181 shall be eligible to receive subscription rights to, purchase or acquire any stock in the reorganized stock insurance company under any plan except in accordance with his rights as an eligible member, and then he shall receive only such rights as are received by other similarly situated eligible members.

Miss. Code Ann. § 83-31-121 Capital stock sales and restrictions.

The conversion plan must provide that any shares of capital stock not sold or distributed to holders of surplus notes, or subscribed to by eligible members exercising subscription rights under Section 83-31-119, may be sold in a private placement, public offering or other alternative method approved by the commissioner. The conversion plan must set the total price of the capital stock in an amount equal to the estimated pro forma market value of the converted stock company based on an independent valuation by a qualified expert, giving consideration to the amount of capital deemed necessary by the board of directors to be raised by the company. The pro forma market value may be the value estimated to be necessary to attract full subscription for the shares, as indicated by the independent valuation, and may be stated as a range of values. The conversion plan shall set the purchase price per share of capital stock at any reasonable amount approved by the commissioner. The purchase price per share need not be the same for each class of purchaser; however, eligible members purchasing stock in accordance with subscription rights received under Section 83-31-119 shall have the right to purchase shares at the lowest available purchase price under the plan. The conversion plan must provide that a person or group of persons acting in concert may not acquire, in the public offering or private placement or through the exercise of subscription rights, more than ten percent (10%) of the capital stock of the converted stock company except with the approval of the commissioner. This limitation does not apply to an entity that purchases one hundred percent (100%) of the capital stock of the converted company as part of the conversion plan approved by the commissioner.

Miss. Code Ann. § 83-31-125 Liquidation account to be created.

The conversion plan may provide for the creation of a liquidation account for the benefit of members in the event of voluntary liquidation after conversion in an amount equal to the surplus of the mutual insurance company, exclusive of the principal amount of any surplus note, on the last day of the quarter immediately preceding the date of adoption of the conversion plan.

Miss. Code Ann. § 83-31-127 Alternative conversion plans that do not rely on nontransferable subscription rights.

The board of directors may adopt a conversion plan that does not rely wholly or partially on issuing nontransferable subscription rights to members to purchase stock of the converted stock company if the commissioner finds that the alternative conversion plan complies with Section 83-31-107(3). An alternative conversion plan may: Include the merger of a domestic mutual insurance company into a domestic or foreign stock insurance company; Provide for issuing stock, cash, or other consideration to members instead of subscription rights; Provide for the formation of a mutual holding company under Section 83-31-145 et seq.; or Set forth another plan containing any other provisions approved by the commissioner. The commissioner may retain, at the mutual insurance company’s expense, a qualified expert or experts, including but not limited to appraisers, actuaries, accountants and attorneys, not otherwise a part of the commissioner’s staff to assist in reviewing whether the alternative conversion plan may be approved by the commissioner.

Miss. Code Ann. § 83-31-129 Requirements for conversion plan to take effect; member rights.

For a conversion plan to take effect: The commissioner must approve the conversion plan; and The eligible members must approve the conversion plan and adopt the amended or restated articles of association. A conversion plan takes effect when the amended or restated articles of association are filed with and approved by the commissioner and also filed with the Mississippi Secretary of State or at such other delayed effective time and date as specified in the amended or restated articles of association as filed. On issuance of a policy after a conversion plan has been adopted by the board of directors but before the effective date of the conversion plan, the mutual insurance company shall send to the member to whom the policy is issued a written notice regarding the conversion plan. Except as provided by paragraph (d) of this subsection, a member of an accident and health insurance company entitled to receive the notice described by paragraph (a) of this subsection is entitled to rescind the member’s policy and receive a full refund of any amount paid for the policy not later than the ten (10) days after the date on which the member receives the notice. Except as provided by paragraph (d) of this subsection, each member who is insured under a property or casualty insurance policy is entitled to receive the notice provided by paragraph (a) of this subsection and shall be advised of the member’s right to cancel the policy and receive a pro rata refund of unearned premiums. A member who has made or filed a claim under the insurance policy is not entitled to a right to receive a refund under paragraph (b) or (c) of this subsection. A person who has exercised the rights provided by paragraph (b) or (c) of this subsection is not entitled to make or file a claim under the insurance policy.

Miss. Code Ann. § 83-31-131 Results on plan effective date.

On the effective date of the conversion: The corporate existence of the mutual insurance company continues in the converted stock company; and All assets, rights, franchises and interests of the mutual insurance company in and to property, real, personal or mixed, and any accompanying things in action, are vested in the converted stock company, without a deed or transfer, and the converted stock company assumes all the obligations and liabilities of the mutual insurance company. Unless otherwise specified in the conversion plan, the directors and officers of the mutual insurance company serving on the effective date of the conversion serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are elected under the articles of association and bylaws of the converted stock company.

Miss. Code Ann. § 83-31-133 Fees, costs and expenses.

A director, officer, agent or employee of the mutual insurance company may not receive a fee, commission or other consideration, other than that person’s usual salary or compensation, for aiding, promoting or assisting in a conversion under Sections 83-31-101 through 83-31-143, except as provided by the conversion plan approved by the commissioner. All the costs and expenses connected with a conversion plan shall be paid for or reimbursed by the mutual insurance company or the converted stock company.

Miss. Code Ann. § 83-31-135 Good faith failure to provide notice.

If the mutual insurance company complies substantially and in good faith with the notice requirements of Sections 83-31-47 or 83-31-101 through 83-31-181, the mutual insurance company’s failure to send a member the required notice under Section 83-31-109(2)(a) or Section 83-31-111(1) does not impair the validity of any action taken under Sections 83-31-47 or 83-31-101 through 83-31-181.

Miss. Code Ann. § 83-31-137 Actions challenging validity.

An action challenging the validity of or arising out of acts taken or proposed to be taken regarding a conversion plan under Sections 83-31-101 through 83-31-143 must begin in the Chancery Court of the First Judicial District of Hinds County, Mississippi, not later than the thirtieth day after the effective date of the conversion plan.

Miss. Code Ann. § 83-31-139 Insolvent companies or companies in financially hazardous condition; waiver.

If a mutual insurance company is insolvent or, in the judgment of the commissioner, is in hazardous financial condition, its board of directors, by a majority vote, may petition the commissioner to waive the provisions of Sections 83-31-101 through 83-31-143 requiring notice to and policyholder approval of the planned conversion. The petition must specify the method and basis for the issuance of the converted stock company’s shares of its capital stock to an independent party in connection with an investment by the independent party in an amount sufficient to restore the converted stock company to a sound financial condition. The conversion may be accomplished without payment of consideration to past, present or future policyholders, but only if the petition makes such a specific request and the commissioner finds that the value of the mutual insurance company is insufficient to warrant that consideration.

Miss. Code Ann. § 83-31-141 Requirements for acquiring control; converted company rights, privileges and compliance.

A mutual insurance company may not be permitted to convert under Sections 83-31-101 through 83-31-143 if, as a direct result of the conversion, any person or any affiliate acquires control of the converted stock company, unless that person or the affiliate complies with the requirements of Section 83-6-1 et seq. Except as otherwise specified in Sections 83-31-47 or 83-31-101 through 83-31-181, a converted stock company has all of the rights and privileges and is subject to all of the requirements and regulations imposed on stock companies formed under the laws of this state but may not exercise rights or privileges that other stock companies may not exercise.

Miss. Code Ann. § 83-31-143 Endorsement or rider extinguishing policy rights.

A mutual insurance company, by endorsement or rider approved by the commissioner and delivered to the policyholder, may simultaneously with or at any time after the adoption of a conversion plan amend any outstanding insurance policy to evidence the extinguishment of the rights, if any, of the holder of the policy as described in the plan of conversion approved by the commissioner. However, such an amendment is void if the conversion plan does not take effect.

Miss. Code Ann. § 83-31-145 Definitions applicable to mutual insurance holding company provisions.

As used in Sections 83-31-145 through 83-31-181, the following items shall have the meaning ascribed herein unless the context indicates otherwise: “Mutual insurance holding company” means an incorporated entity without permanent capital stock that is organized under Section 83-31-145 et seq. and whose members are determined in accordance with such provisions. “Subsidiary insurance company” means a stock insurance company, the majority of the voting shares of the capital stock of which are at all times owned by a mutual insurance holding company. For these purposes, “majority of the voting shares of the capital stock” means shares of the capital stock of a company which carry the right to cast a majority of the votes entitled to be cast by all of the outstanding shares of the capital stock for the election of directors, other than securities having voting power only because of the occurrence of a contingency. The ownership of a majority of the voting shares of the capital stock of a former mutual insurance company reorganized under Sections 83-31-145 through 83-31-181 which voting shares are required by Sections 83-31-145 through 83-31-181 to be at all times owned by a mutual insurance holding company includes indirect ownership through one or more intermediate holding companies. However, indirect ownership through one or more intermediate holding companies shall not result in a mutual insurance holding company owning less than the equivalent of a majority of the voting shares of the capital stock of the former mutual reorganized insurance company. “Intermediate holding company” means a holding company which is a subsidiary of a mutual insurance holding company and which directly or through a subsidiary intermediate holding company owns a majority of the voting shares of the capital stock of one or more subsidiary insurance companies. “Plan of reorganization” means a plan adopted under Sections 83-31-145 through 83-31-181 by the board of directors of a domestic mutual insurance company to reorganize as provided in Section 83-31-151. “Mutual insurance company” means a domestic mutual insurance company formed pursuant to Section 83-31-1 et seq. except for domestic mutual insurance companies that have active life insurance or annuities products in force.

Miss. Code Ann. § 83-31-147 Holding company voting share ownership; securities issuance.

The voting shares of the capital stock of a subsidiary insurance company, which are required by Sections 83-31-145 through 83-31-181 in order to maintain a majority of the voting shares, are to be at all times owned by a mutual insurance holding company or one or more intermediate holding companies and the voting shares of the capital stock of any intermediate holding company, which are necessary to satisfy such ownership requirement through indirect ownership, shall not be conveyed, transferred, assigned, pledged, subjected to a security interest or lien, encumbered or otherwise hypothecated or alienated by the mutual insurance holding company or any intermediate holding company, except with the prior approval of the commissioner. Any conveyance, transfer, assignment, pledge, security interest, lien, encumbrance or hypothecation or alienation of, in or on such voting shares of capital stock is in violation of this section and shall be void in inverse chronological order of the date of such conveyance, transfer, assignment, pledge, security interest, lien, encumbrance or hypothecation or alienation as to such shares of capital stock. The shares of the capital stock of the surviving or new company resulting from a merger or consolidation of two (2) or more subsidiary insurance companies or two (2) or more intermediate holding companies which were subsidiaries of the same mutual insurance holding company are subject to the same requirements, restrictions, and limitations as provided in this section to which the shares of the merging or consolidating former mutual reorganized insurance companies or intermediate holding companies were subject by this section before the merger or consolidation. Upon approval of the commissioner and compliance with applicable law, an intermediate holding company or a subsidiary insurance company may issue to the mutual insurance holding company and to other persons securities, including voting stock, nonvoting stock and securities convertible into voting or nonvoting stock, if, after giving effect to such issuance, in the aggregate, the issued and outstanding voting stock of the intermediate holding company or the subsidiary insurance company held directly or indirectly by the mutual insurance holding company is not less than a majority of the voting shares of capital stock of such intermediate holding company or subsidiary insurance company. For purposes of this limitation, any issued and outstanding securities of an intermediate holding company or subsidiary insurance company that are convertible into voting stock shall be considered issued and outstanding voting stock. Upon approval of the commissioner and compliance with applicable law, an intermediate holding company or a subsidiary insurance company may issue any such securities: (a) to policyholders of a subsidiary insurance company in accordance with a subscription offering containing such terms, conditions and limitations as are approved by the board of directors of such intermediate holding company or subsidiary insurance company and the mutual insurance holding company; (b) in a public offering; or (c) in a private placement, including, without limitation, to one or more purchasers who are holders of surplus notes or other securities of a subsidiary insurance company, have or will have a lending, pooling or reinsurance arrangement with a subsidiary insurance company, have or will have an insurance, marketing, investment, support or other cooperative arrangement or affiliation with the subsidiary insurance company or are an affiliate of any entity which has such a relationship.

Miss. Code Ann. § 83-31-149 Domestic mutual insurance holding company powers and compliance with nonprofit private corporation provisions.

Domestic mutual insurance holding companies shall have all the powers and authority and shall be subject to the requirements applicable to Mississippi nonprofit private corporations under Section 79-11-101 et seq., except: A mutual insurance holding company shall be organized exclusively under Sections 83-31-145 through 83-31-181 and shall be a mutual company without capital stock. The articles of association of the mutual insurance holding company and any amendment to such articles or restatement of such articles shall be subject to the approval of the commissioner for compliance with the provisions of Sections 83-31-145 through 83-31-181 before filing with the Mississippi Secretary of State and shall contain the name of the mutual insurance holding company, which shall include the word “mutual.” To the extent that the provisions of Section 79-11-101 et seq. conflict with the provisions of Sections 83-31-47 or 83-31-101 through 83-31-181, the insurance laws of the State of Mississippi or the regulations of the commissioner, then such provisions of Sections 83-31-47 or 83-31-101 through 83-31-181, the insurance laws of the State of Mississippi or the regulations of the commissioner shall control.

Miss. Code Ann. § 83-31-151 Reorganization and subsidiaries.

A domestic mutual insurance company, by itself or together with one or more other mutual insurance companies, under a plan of reorganization, may reorganize as a mutual insurance holding company system that must consist of a mutual insurance holding company and one or more controlled subsidiaries and which may consist of one or more intermediate stock holding companies and other subsidiaries as permitted by Section 83-6-1 et seq. The reorganization may be effected by the organization of one or more companies, amendment or restatement of the articles of association and bylaws of one or more companies, transfer of assets and liabilities among two (2) or more companies, issuance, acquisition or transfer of capital stock of one or more companies or merger or consolidation of two (2) or more companies. On and after the effective date of a plan of reorganization, the mutual insurance holding company shall at all times own, directly or indirectly, a majority of the voting shares of each controlled subsidiary and any intermediate stock holding company. All of the initial shares of the capital stock of the insurance company which reorganized as a subsidiary insurance company shall be issued either to the mutual insurance holding company or to an intermediate holding company which is wholly owned by the mutual insurance holding company. This restriction does not preclude the subsequent issuance of additional shares of stock by an intermediate holding company or the subsidiary insurance company, subject to the approval of the commissioner and compliance with applicable law, so long as the mutual insurance holding company at all times owns directly or through one or more intermediate holding companies, a majority of the voting shares of the capital stock of the subsidiary insurance company. The membership interests of the policyholders of the subsidiary insurance company shall become membership interests in the mutual insurance holding company in accordance with the plan of reorganization. Policyholders of the subsidiary insurance company which was formerly the mutual insurer shall be members of the mutual insurance holding company in accordance with the plan of reorganization and the articles of association and bylaws of the mutual insurance holding company.

Miss. Code Ann. § 83-31-153 Reorganization plan requirements; adoption and approval.

A plan of reorganization shall include the following provisions: A description of the structure of the proposed mutual insurance holding company system consistent with the requirements therefor set forth in Sections 83-31-145 through 83-31-181. A description of the qualifications for membership in and the rights of members of the mutual insurance holding company consistent with the requirements therefor set forth in Sections 83-31-145 through 83-31-181, provisions for the extinguishment of membership interests in the mutual insurance company and provisions for the conversion of such membership interests in the mutual insurance company into membership interests in the mutual insurance holding company. A description of the transactions, and parties to such transactions, that will effect the reorganization, including, but not limited to, transfer and assumption of policies, contracts, assets and liabilities. A description of corporate restructuring and other corporate transactions that will effect the reorganization, including, but not limited to, formation or organization of companies, amendment or restatement of articles of association or bylaws or those proposed in connection with the formation or organization of companies in connection with the plan and mergers and consolidations. A description of those persons who shall serve as directors and officers of the mutual insurance holding company, its intermediate stock holding companies, if any, its controlled subsidiaries and other subsidiaries as of the effective date of the reorganization. The initial directors of each such company shall be the directors of the mutual insurance company who shall have terms concurrent with the terms as directors of the reorganized mutual insurance company unless otherwise specified in the plan. Provisions requiring that, following the reorganization, the material terms and conditions of indemnification or coverage of policyholders of the mutual insurance company shall remain in full force and effect under policies transferred to and assumed by one or more subsidiaries of the mutual insurance holding company. Provisions requiring that, following the reorganization, the material terms and conditions of subordinated surplus notes and other contractual obligations, other than those arising under policies described in paragraph (f) of this section, of the mutual insurance company, subject to the rights of the mutual insurance company under applicable law, and to the extent such obligations are not otherwise satisfied or terminated in accordance with their terms or retained by a mutual insurance holding company or controlled subsidiary, shall remain in full force and effect upon the transfer of such obligations to, and assumption of such obligations by, one or more subsidiaries of the mutual insurance holding company. A plan of reorganization must be adopted by two-thirds (2/3) of the members of the board of directors of the mutual insurance company or, in the case of the formation of any intermediate stock insurance holding company that is not concurrent with the formation of the mutual insurance holding company, by two-thirds (2/3) of the members of the board of directors of the mutual insurance holding company. Not later than the ninetieth day following the adoption of a plan of reorganization by the board of directors, and before the meeting of the mutual insurance company members to approve the plan, the mutual insurance company shall submit to the commissioner the following: The plan of reorganization, as adopted. The form of notice to be sent to the mutual insurance company members, informing them of their right to vote on the plan of reorganization. The form of proxy statement to be sent to the mutual insurance company members informing them of their right to vote by proxy on the plan of reorganization and describing the plan. The form of proxy to be sent to the mutual insurance company members to solicit their vote on the plan of reorganization. Proposed articles of association, merger or consolidation, bylaws, restatements of or amendments to articles of association and bylaws and plans of merger or consolidation with respect to each entity to be organized, reorganized or otherwise subject to such action under the plan of reorganization. An audited financial statement prepared on a statutory basis in accordance with the insurance laws of the State of Mississippi, including an actuarial opinion for the most recent calendar year ended, or a copy thereof, if the statement was previously filed with the commissioner. Such other information as required under rules or regulations or as requested by the commissioner. The commissioner may hold a public hearing to allow public comment on the plan of reorganization after giving written notice to the mutual insurance company and other interested persons, all of whom have the right to appear at the hearing. Notice to interested persons who have not filed an appearance in the matter may be made in any reasonable manner deemed appropriate by the commissioner with the costs thereof assessed to the mutual insurance company. Within twenty (20) business days after filing with the commissioner the documents required in connection with a plan of reorganization, the mutual insurance company shall send to each eligible member a notice advising the eligible member of the adoption and filing of the plan of reorganization and of the member’s right to provide to the commissioner and the mutual insurance company comments on the plan. As an alternative to the notice required under paragraph (a) of this subsection, the mutual insurance company may use any other means which is reasonably designed to provide notice to eligible members and which alternative means of providing notice is approved by the commissioner. The notice required under paragraph (a) or (b) of this subsection shall include a description of the procedure to be used in making comments. An eligible member who elects to make comments must make the comments in writing (i) if notice is sent to each eligible member, not later than the thirtieth day after the date on which the notice is sent, or (ii) if an alternative means of providing notice is approved by the commissioner, not later than such date for receipt of comments approved by the commissioner. Except as otherwise provided by this subsection, the commissioner shall approve or disapprove a plan of reorganization not later than the ninetieth day after the first day on which all the documents and other information required are filed with the commissioner. The commissioner may not extend the time for approval or disapproval beyond the ninety-day time period unless he finds it necessary to retain a qualified expert in accordance with subsection (7) of this section, in which case he may extend the time for review for an additional sixty (60) days beyond the initial ninety-day period. Notwithstanding the stated time limits herein, the commissioner may extend the time for approval or disapproval for an additional thirty (30) days beyond the date on which any amendment to such plan is filed with the commissioner. The commissioner shall, within five (5) days of approving or disapproving a plan of reorganization, give written notice to the mutual insurance company of the commissioner’s decision and, in the event of disapproval, a detailed statement of the reasons for the adverse decision. If a plan is disapproved, then the plan of reorganization may be amended and resubmitted to the commissioner for his approval or disapproval as provided in Sections 83-31-145 through 83-31-181. If the commissioner disapproves the plan then the mutual insurance company may appeal the commissioner’s decision as provided by the laws of this state to the Chancery Court of the First Judicial District of Hinds County, Mississippi. The commissioner may retain, at the mutual insurance company’s expense, a qualified expert or experts, including but not limited to appraisers, actuaries, accountants and attorneys, not otherwise a part of the commissioner’s staff to assist the commissioner in reviewing the plan of reorganization. The commissioner shall approve a plan of reorganization if the commissioner finds that the plan of reorganization complies with Sections 83-31-145 through 83-31-181 and the plan of reorganization is fair and equitable to members and policyholders; however, the commissioner may not approve such a plan of reorganization and shall disapprove such a plan if the commissioner finds that (a) the effect of the plan of reorganization would be substantially to lessen competition in insurance in this state or tend to create a monopoly therein; (b) the financial condition of any party to the plan of reorganization is such as might jeopardize the financial stability of the insurers which are parties to the plan, or prejudice the interests of their policyholders; (c) the plan of reorganization or the plans for operation of the parties to the plan of reorganization following implementation of the plan of reorganization are not in the public interest; (d) the competence, experience and integrity of those persons who would control the operations of the parties to the plan of reorganization are such that it would not be in the interest of policyholders of the parties to the plan of reorganization or of the public to permit the plan of reorganization; (e) the plan of reorganization’s method of allocating value is not fair and equitable; (f) the plan of reorganization is not fair and equitable to the members and policyholders; (g) implementation of the plan of reorganization is likely to be hazardous or prejudicial to the insurance buying public; or (h) the plan of reorganization unfairly enriches the officers and directors of the reorganizing insurer. A plan of reorganization adopted by the board of directors of the mutual insurance company may be: Amended by the board of directors of the mutual insurance company in response to the comments or recommendations of the commissioner or any other state or federal agency or governmental entity before any solicitation of proxies from members of the mutual insurance company to vote on the plan of reorganization or at any time with the consent of the commissioner, except that any material amendment after the members’ approval shall require the members’ approval; or Terminated by the board of directors of the applicant at any time before members of the mutual insurance company vote on the plan of reorganization and, otherwise, at any time with the consent of the commissioner. The plan of reorganization is approved upon the affirmative vote of at least two-thirds (2/3) of the votes cast by members of the mutual insurance company, notwithstanding quorum or voting action requirements otherwise applicable to the mutual insurance company to the contrary. Within thirty (30) days after members have approved the plan of reorganization, the applicant must file with the commissioner the minutes of the meeting at which the plan of reorganization was approved.

Miss. Code Ann. § 83-31-155 Dividends and distributions to members.

A mutual insurance holding company shall not be authorized to pay dividends or make distributions to mutual insurance holding company members except as may be expressly approved by the commissioner. Neither the adoption nor the implementation of a plan of reorganization leading to the formation of a mutual holding company shall be deemed to give rise to any obligation by or on behalf of a mutual insurance company to make any distribution or payment to any member or policyholder or to any other person, fund or entity of any nature whatsoever in connection with the ownership, control, benefits, policies, purpose, or nature of the mutual insurance company or otherwise.

Miss. Code Ann. § 83-31-157 Holding company merger or consolidation.

Subject to applicable requirements of Sections 83-31-47 and 83-31-101 through 83-31-181 and Section 83-6-1 et seq., a mutual insurance holding company may: Merge or consolidate with, or acquire the assets of, a mutual insurance holding company formed under Sections 83-31-47 or 83-31-101 through 83-31-181 or any similar entity or organization formed under the laws of any other state; Either alone or together with one or more intermediate stock holding companies, or other subsidiaries, directly or indirectly acquire the stock of a stock insurance company or a mutual insurance company that reorganizes under Sections 83-31-47 or 83-31-101 through 83-31-181 or the law of its state of organization; Together with one or more of its stock insurance company subsidiaries, acquire the assets of a stock insurance company or a mutual insurance company; Acquire a stock insurance company through the merger of such stock insurance subsidiary with a stock insurance company or intermediate stock insurance company subsidiary of the mutual insurance holding company; or Acquire the stock or assets of any other person to the same extent as would be permitted for a mutual insurance company. A plan and agreement for merger or consolidation in accordance with subsection (1) of this section shall be submitted to and approved by two-thirds (2/3) of the members of each domestic mutual insurance holding company or mutual insurance company involved in the merger or consolidation who vote either in person or by proxy thereon at meetings called for the purposes pursuant to such reasonable notice and procedure as has been approved by the commissioner; however, no vote of a domestic mutual insurance holding company shall be required to approve the merger of a mutual insurance holding company which has resulted from the reorganization of a domestic or foreign mutual insurance company and which has surplus equal to not more than twenty-five percent (25%) of the surplus of the combined companies. No such merger or consolidation shall be effectuated unless in advance thereof the plan and agreement therefor have been filed with the commissioner and approved by the commissioner in accordance with Section 83-6-1 et seq. All of the initial shares of the capital stock of the reorganized subsidiary insurance company shall be issued either to the mutual insurance holding company, or to an intermediate holding company which is a subsidiary of the mutual insurance holding company. The membership interests of the policyholders of the reorganized insurance company shall become membership interests in the mutual insurance holding company in accordance with the plan and agreement of merger or consolidation. Policyholders of the reorganized insurance company shall be members of the mutual insurance holding company in accordance with the plan and agreement of merger or consolidation and the articles of association and bylaws of the mutual insurance holding company. The mutual insurance holding company shall at all times directly or indirectly own a majority of the voting shares of the capital stock of any reorganized subsidiary insurance company.

Miss. Code Ann. § 83-31-159 Filing and approval of articles of association.

No mutual insurance holding company shall be formed unless its articles of association are approved by the commissioner before filing the articles of association with the Mississippi Secretary of State as provided by law. The articles of association shall be effective when filed with and approved by the commissioner and also filed with the Mississippi Secretary of State or at such other delayed effective time and date as specified in the articles of association as filed.

Miss. Code Ann. § 83-31-161 Amending articles of association.

A domestic mutual insurance holding company may amend its articles of association by vote of a majority of those members present or represented by proxy at a lawful meeting of its members if the notice given members included due notice of the proposal to amend. Upon adoption of an amendment, the articles of amendment shall be effective when filed with and approved by the commissioner and also filed with the Mississippi Secretary of State or at such other delayed effective time and date as specified in the articles of amendment.

Miss. Code Ann. § 83-31-163 Bylaws.

The initial board of directors of a mutual insurance holding company shall adopt bylaws. The bylaws shall provide: That each member is entitled to one (1) vote upon each matter coming to a vote at meetings of members or to more votes in accordance with a reasonable classification of members as set forth in the bylaws and based upon the amount of insurance in force with the mutual insurance holding company’s subsidiaries or upon the amount of the premiums paid to the mutual insurance holding company’s subsidiaries by such member or upon other reasonable factors. The bylaws shall provide that a member has the right to vote in person or by his written proxy. The bylaws may specify the mode of voting by proxy and other requirements relating to voting by proxy consistent with procedures used by mutual insurance companies in accordance with Section 83-31-9 et seq. For the election of directors by the members and the number, qualifications, terms of office, subject to the requirements of Section 83-31-165. For the time, notice and conduct of annual and special meetings of members and voting thereat. For the number, designation, election, terms and powers and duties of the respective corporate officers. For deposit, custody and disbursement of and accounting for corporate funds. That a quorum at all annual and special meetings of members shall consist of all members present and voting in person or by proxy, after due notice of such meeting. For any other reasonable provisions customary, necessary or convenient for the management or regulation of the company’s corporate affairs not inconsistent with law. Within thirty (30) days of adoption of any bylaws or any modification thereof or addition thereto, a mutual insurance holding company shall file with the commissioner a copy, certified by the mutual insurance holding company’s secretary, of such bylaws and of every modification thereof or addition thereto, which shall be subject to the approval of the commissioner. The insurer shall not, after receiving written notice of such disapproval and during the existence thereof, effectuate any bylaw provision disapproved by the commissioner.

Miss. Code Ann. § 83-31-165 Directors.

The affairs of every mutual insurance holding company shall be managed by not less than five (5) directors. Directors shall be elected by the members of the mutual insurance holding company at the annual meeting of members. Directors may be elected for terms of not more than three (3) years each and until their successors are elected and have qualified, and, if to be elected for terms of more than one (1) year, the mutual insurance holding company’s bylaws may provide for a classified board under which the terms of a proportionate part of the members of the board of directors shall expire on the date of each annual meeting of members. If so provided in a mutual insurance holding company’s bylaws, a director of such mutual insurance holding company must be a policyholder of a subsidiary insurance company of the mutual insurance holding company.

Miss. Code Ann. § 83-31-167 Dissolution, liquidation, commissioner jurisdiction and investments.

A mutual insurance holding company and, if applicable, an intermediate holding company shall not be dissolved or liquidated without the approval of the commissioner. The commissioner shall retain jurisdiction over a mutual insurance holding company incorporated in this state and, if applicable, an intermediate holding company, to assure that policyholder interests are protected, including, but not limited to, regulation of the solvency of such companies. Subject to the limitations of Section 83-6-2, a mutual insurance holding company formed under Sections 83-31-47 or 83-31-101 through 83-31-181 may (a) invest in the stock or debt securities of one or more intermediate holding companies; (b) invest in the stock or debt securities of one or more domestic or foreign insurance companies; (c) exercise any power or engage in any transaction or activity permitted by Section 83-31-157 or other provision applicable to mutual insurance holding companies; and (d) invest in any corporation, partnership, limited liability company, business trust or other entity permitted for a mutual insurance company under the laws of this state.

Miss. Code Ann. § 83-31-169 Membership requirements.

Membership in a mutual insurance holding company shall be determined in accordance with the mutual insurance holding company’s articles of association and bylaws and, subject to such exceptions as are set forth in the articles of association or bylaws, shall be based upon each member’s holding a policy of insurance with a subsidiary insurance company. Any person, public or private corporation, board, association, firm, estate, trustee or fiduciary may be a member of a mutual insurance holding company. No member of a mutual insurance holding company may transfer membership or any right arising therefrom. A member of a mutual insurance holding company is not, as such, personally liable for the acts, debts, liabilities or obligations of the company and may not be assessed by the directors of such company. A membership interest in a mutual insurance holding company shall not constitute a security as defined by Section 75-71-105 and shall not be subject to any requirements of the Mississippi Securities Act, Section 75-71-101 et seq.

Miss. Code Ann. § 83-31-171 Voluntary dissolution.

Upon any voluntary dissolution of a domestic mutual insurance holding company, its assets remaining after discharge of its indebtedness, if any, and expenses of administration shall be distributed to existing persons who were its members at any time within the three-year period preceding the date such liquidation was authorized or ordered or date of last termination of the insurer’s certificate of authority, whichever date is earlier; except, if the commissioner has reason to believe that those in charge of the management of the mutual insurance holding company have caused or encouraged the reduction of the number of members of the insurer in anticipation of liquidation and for the purpose of reducing thereby the number of persons who may be entitled to share in distribution of the insurer’s assets, the commissioner may enlarge the three-year qualification period by such additional time as the commissioner may deem to be reasonable. The distributive share of each such member shall be determined by a formula based upon such reasonable classifications of members as the commissioner may approve.

Miss. Code Ann. § 83-31-173 Provisions applicable to mutual insurance holding companies; exemptions from certain provisions.

Each mutual insurance holding company shall be subject to the applicable laws and rules of this state relating to insurance holding company systems. A mutual insurance holding company shall not be subject to provisions of Title 83 of the Mississippi Code or rules adopted thereunder with respect to the writing of insurance or required capital or surplus. A mutual insurance holding company system shall be considered an insurance holding company system but shall not require separate approval under Section 83-31-1 et seq. for an acquisition of controlling stock, ownership interest, assets or control or for a merger or consolidation, share exchange, organization, or reorganization of insurance companies or other transaction with respect to any action approved under the provisions of Sections 83-31-47 or 83-31-101 through 83-31-181.

Miss. Code Ann. § 83-31-175 Actions challenging validity.

An action challenging the validity of or arising out of acts taken or proposed to be taken regarding a plan of reorganization under Sections 83-31-47 or 83-31-101 through 83-31-181 must begin in the Chancery Court of the First Judicial District of Hinds County, Mississippi, not later than the thirtieth day after the effective date of the plan of reorganization.

Miss. Code Ann. § 83-31-177 Mutual insurance holding company conversion to stock holding company.

A mutual insurance holding company may become a stock holding company under such plan and procedure as may be approved by the commissioner and as provided in Section 83-31-101 et seq.

Miss. Code Ann. § 83-31-179 Fees, costs and expenses.

A director, officer, agent or employee of the mutual insurance company may not receive a fee, commission or other consideration other than that person’s usual salary or compensation for aiding, promoting or assisting in a plan of reorganization under Sections 83-31-47 or 83-31-101 through 83-31-181, except as provided by the plan of reorganization approved by the commissioner. All the costs and expenses connected with a plan of reorganization shall be paid for or reimbursed by the mutual insurance company or the mutual insurance holding company.

Miss. Code Ann. § 83-31-181 Rules and regulations.

The commissioner may adopt rules and regulations implementing the provisions of Sections 83-31-101 through 83-31-179, including, but not limited to, the regulation of the solvency of mutual insurance holding companies and intermediate holding companies.

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