California Insurance Code 4097.07 – The meeting of members prescribed by subdivision (c) of Section …
The meeting of members prescribed by subdivision (c) of Section 4097.02 shall be called by the board of directors, the chairperson of the board, or the president of the mutual company. Notice of the meeting shall be given to eligible members by mail at least 45 days prior to the date set for the meeting to members of the mutual company of record on the date the plan of conversion was adopted by the board of directors. In the event that a plan of reorganization provides for the establishment of a mutual holding company under Section 4097.05, the notice shall be accompanied by an information statement describing the proposed reorganization. The information statement shall include, at a minimum, the following items:
(a) A full copy and a summary of the plan of reorganization.
Terms Used In California Insurance Code 4097.07
- Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
- Demutualization: means the conversion of a medical malpractice mutual insurer into a stock insurer without the establishment of a mutual holding company or the conversion of a mutual holding company into a stock corporation. See California Insurance Code 4097.01
- Eligible members: means , for the conversion of a mutual insurer, members of the mutual insurer who are of record, fully paid-up and otherwise in good standing on the mutual insurer's adoption date and on its effective date, but shall not include those persons covered solely under a reporting endorsement to a claims made policy on either date. See California Insurance Code 4097.01
- Mutual company: means , in the case of a plan of conversion, the medical malpractice mutual insurer or mutual holding company that is converting pursuant to the plan. See California Insurance Code 4097.01
- Mutual holding company: means a corporation organized under the laws of this state subject to the general corporation law as set forth in the Corporations Code. See California Insurance Code 4097.01
- Mutual insurer: means , in the case of a plan of conversion under this article, the medical malpractice mutual insurer that is converting pursuant to the plan. See California Insurance Code 4097.01
- Person: means an individual, partnership, firm, association, corporation, joint-stock company, limited liability company, trust, government or governmental agency, state or political subdivision of a state, public or private corporation, board, association, estate, trustee, or fiduciary, or any similar entity. See California Insurance Code 4097.01
- plan: means a plan adopted by a mutual company in compliance with this article. See California Insurance Code 4097.01
- Policyholder: means the holder of a policy other than a reinsurance contract. See California Insurance Code 4097.01
- Quorum: The number of legislators that must be present to do business.
- subscription: includes mark when the signer or subscriber can not write, such signer's or subscriber's name being written near the mark by a witness who writes his own name near the signer's or subscriber's name. See California Insurance Code 18
(b) A discussion addressing the reasons and purposes of the proposed restructuring, which shall include a comparison to a demutualization.
(c) An analysis of the benefits and risks associated with the proposed reorganization to the mutual company and its policyholders.
(d) An explanation of how the restructuring will benefit policyholders, as well as a description of any potential risks to policyholder interests and a description of how the policyholders’ rights differ at the mutual holding company level from those in the existing company.
(e) A description of any stock issuance, including any shares or options to be issued to directors, officers, agents, employees, or employee benefit plans, for their benefit, that will be made in conjunction with the plan of conversion, if any, and the guidelines and parameters which shall apply in the event stock is to be issued, including a detailed discussion of subscription rights that are to be granted to policyholders.
(f) Any proposed amendments to the mutual insurer‘s articles of incorporation to address the restructuring from a mutual to a stock insurer.
(g) Any proposed articles and bylaws of the mutual holding company and any other entities to be created in the reorganization.
(h) Financial information.
(i) Any other information that the commissioner determines is necessary to make a complete and adequate disclosure to policyholders.
Voting shall be by ballot, in person or by proxy. A quorum shall consist of 10 percent of the members of the mutual company entitled to vote at the meeting.
(Added by Stats. 1998, Ch. 421, Sec. 4. Effective January 1, 1999.)