(a) A reorganization does not change (i) the legal form of the hospital service corporation or (ii) the hospital service corporation’s license to do business in North Carolina. Any subscribers’ contracts and certificates issued by the hospital service corporation shall remain in full force and effect.

(b) The hospital service corporation shall continue to be subject to this Article and Article 66 of this Chapter, except for the following:

(1) Neither a reorganization nor any other transaction permitted by this Part shall constitute or require a conversion of the hospital service corporation pursuant to N.C. Gen. Stat. § 58-65-131, 58-65-132, 58-65-133, or any other law of this State.

Terms Used In North Carolina General Statutes 58-65-183

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
  • state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3

(2) Neither a reorganization nor any other transaction permitted by this Part shall require the nonprofit holding corporation, hospital service corporation, or any affiliate of either to make any distribution or payment to any person or entity. This subdivision shall not apply to distributions or payments between a nonprofit holding corporation or hospital service corporation and any of its affiliates.

(3) The hospital service corporation may make and pay direct or indirect dividends or distributions to the nonprofit holding corporation, and N.C. Gen. Stat. § 58-19-10(b), 58-65-131, 58-65-132, and 58-65-133 shall not apply to such dividends or distributions, provided that such dividends or distributions satisfy the applicable standards for payment of a dividend or distribution set forth in N.C. Gen. Stat. § 55A-13-02, 58-7-130, 58-19-25(d), and 58-19-30.

(4) If the hospital service corporation undertakes a conversion pursuant to N.C. Gen. Stat. § 58-65-131, 58-65-132, and 58-65-133 at any time following a reorganization, then, for the purposes of that conversion, the references in N.C. Gen. Stat. § 58-65-131, 58-65-132, and 58-65-133 to “fair market value of the corporation” or “value of the corporation” shall mean the fair market value of the nonprofit holding corporation and its consolidated subsidiaries. (2023-33, s. 1.)

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