A. A domestic mutual insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct unless such reinsurance is prohibited by its articles of incorporation.

B. A domestic mutual insurer may reinsure all or substantially all its business in force, or all or substantially all of a major class thereof, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section.

C. In advance of such reinsurance the agreement therefor shall be filed with and be subject to the approval of the director within a reasonable time after filing. The director shall not approve the agreement unless he finds it to be fair and equitable to each domestic insurer involved, and that such reinsurance if effectuated would not substantially reduce the protection or service to its policyholders. If the director does not so approve, he shall so notify each insurer involved in writing specifying his reasons therefor.

D. The plan and agreement for such reinsurance shall be approved by vote of not less than two thirds of each domestic mutual insurer’s members voting thereon at meetings of members called for the purpose, pursuant to such reasonable notice and procedure as the director may approve. If a life insurer, the right to vote may be limited to members whose policies have face amounts of not less than one thousand dollars and have been in force one year or more.

E. If for reinsurance of a mutual insurer in a stock insurer, the agreement shall provide for payment in cash to each member of the insurer entitled thereto as upon a conversion of such insurer pursuant to paragraph 4 of subsection B of section 20-730, of his equity in the business reinsured as determined under a fair formula approved by the director, which equity shall be based upon the member’s equity in the reserves, assets, whether or not admitted assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer.