A. A stock insurer other than title insurer may become a mutual insurer under such plan and procedure as may be approved by the superintendent after a hearing thereon.
B. The superintendent shall not approve any such plan, procedure or mutualization unless he finds that:
(1) it is equitable to stockholders and policyholders;
(2) it is subject to approval by holders of not less than two-thirds of the insurer's outstanding capital stock having voting rights, and by not less than two-thirds of those of the insurer's policyholders who vote on such plan in person or by proxy or by mail pursuant to such notice, information and procedure as approved by the superintendent;
(3) if a life insurer, right to vote thereon is limited to holders of policies other than term or group policies, and whose policies have been in force for more than one (1) year;
(4) the plan provides for purchase of the shares of any nonconsenting stockholders in the same manner and subject to the same applicable conditions as provided by the general business corporation laws of this state as to rights of nonconsenting stockholders with respect to merger or consolidation of business corporations;
(5) mutualization will result in retirement of the insurer's outstanding capital stock at a price not in excess of the fair market value thereof as determined by competent disinterested appraiser;
(6) the plan provides for definite conditions to be fulfilled by a designated reasonable date upon which such mutualization shall become effective; and
(7) mutualization would leave the insurer with competent and trustworthy management and surplus funds reasonably adequate for the security of its policyholders and to enable the insurer, in the states in which it is then authorized to transact insurance, to continue in business for the same kinds of insurance included in its certificates of authority in such states.
C. No director, officer, agent or employee of the insurer, nor any other person, shall receive any fee, commission or other valuable consideration whatsoever, other than customary salary or other regular compensation, for in any manner aiding, promoting or assisting in the mutualization, except as set forth in the plan of mutualization as approved by the superintendent.
D. This section does not apply to mutualization under order of court pursuant to Article 41 [Chapter 59A, Article 41 NMSA 1978] (conservation, rehabilitation, liquidation) of the Insurance Code.
History: Laws 1984, ch. 127, ยง 580.
Structure New Mexico Statutes
Article 34 - Domestic Stock and Mutual Insurers
Section 59A-34-1 - Scope of article.
Section 59A-34-2 - Application of general corporation statutes.
Section 59A-34-3 - Insurance business exclusive; exceptions.
Section 59A-34-4 - Incorporation.
Section 59A-34-6 - Amendment of articles of incorporation.
Section 59A-34-7 - Nonuser of corporate charter.
Section 59A-34-8 - Prohibited interest of officers, directors and employees in certain transactions.
Section 59A-34-9 - Salaries of officers, directors.
Section 59A-34-10 - Records and accounts.
Section 59A-34-11 - Vouchers for expenditures.
Section 59A-34-12 - Assets to be kept in state; exceptions.
Section 59A-34-13 - Removal, concealment of records, assets.
Section 59A-34-14 - Information to stockholders and proxy regulations.
Section 59A-34-15 - Information in advance of stockholder meetings.
Section 59A-34-16 - Solicitation of proxies.
Section 59A-34-17 - Management, compensation and agency contracts.
Section 59A-34-18 - Dividends to stockholders.
Section 59A-34-19 - Participating policies.
Section 59A-34-20 - Dividends to policyholders.
Section 59A-34-21 - Illegal dividends; penalty.
Section 59A-34-22 - Purchase of own shares by stock insurer.
Section 59A-34-23 - Borrowed capital funds.
Section 59A-34-24 - Mutual membership.
Section 59A-34-25 - Mutual members, corporate rights.
Section 59A-34-26 - Mutual insurer bylaws.
Section 59A-34-27 - Mutual members, quorum.
Section 59A-34-28 - Mutual members, contingent liability.
Section 59A-34-29 - Mutual members, levy of contingent liability.
Section 59A-34-30 - Mutual members, enforcement of contingent liability.
Section 59A-34-31 - Mutual insurers; nonassessable policies.
Section 59A-34-32 - Prohibited transactions.
Section 59A-34-33 - Unauthorized business in other states.
Section 59A-34-34 - Mutualization of stock insurer.
Section 59A-34-35 - Conversion to ordinary business corporation.
Section 59A-34-36 - Merger, consolidation of stock insurers.
Section 59A-34-37 - Preservation of old charter in merger, consolidation.
Section 59A-34-38 - Merger, consolidation of mutual insurers.
Section 59A-34-39 - Conversion of mutual to stock insurer.
Section 59A-34-40 - Bulk reinsurance.
Section 59A-34-41 - Bulk reinsurance; fees and commissions.
Section 59A-34-42 - Expense to be borne by parties.
Section 59A-34-43 - Mutual member's share of assets on liquidation.