PURPOSE: This rule sets forth the provisions that must be included in a plan of conversion in accordance with section 375.206, RSMo.

1. (1) The conversion of a mutual holding company shall be accomplished pursuant to a plan of conversion that complies with the following requirements.

   1. (A) Such plan of conversion shall have been duly adopted by action of not less than three-fourths (3/4) of the entire board of directors of the mutual holding company.

   2. (B) Such plan of conversion shall specify the reasons for the proposed conversion and shall be—

      1. 1. Fair and equitable to the members of

the mutual holding company; and

1. 2. Not prejudicial to the interest of the

policyholders of the reorganized insurer.

1. (C) Such plan of conversion shall provide that all membership interests shall be extinguished as of the effective date and shall require the distribution of consideration, as soon as reasonably feasible, to all eligible members upon extinguishment of such membership interests. The plan of conversion shall set forth the time frame in which such distribution of consideration will be made for each class of members. Consideration may consist of cash, securities of the converted holding company, additional life insurance or annuity benefits or any combination of such forms of consideration, or any other compensation approved by the director. The form or forms of consideration to be distributed to a class or category of eligible members may differ from the forms of consideration to be distributed to another class or category of eligible members. Such consideration shall be allocated among eligible members under fair and equitable formulas, methods, and assumptions. The plan of conversion may provide that all or any portion of the consideration distributable to all or certain eligible members may be held in a trust or other entity or entities established by the mutual holding company pursuant to, and subject to limitations set forth in, the plan of conversion. (D)1. If no closed block of participating policies and contracts was established or alternative provision was approved when the mutual holding company was established or thereafter, then the plan of conversion of a mutual holding company must provide for the reasonable dividend expectations of policyholders of the reorganized insurer. Such provision may, but is not required to, include a closed block. The sole purpose of any such dividend protection provision shall be to provide the means to meet reasonable policyholder dividend expectations, and it is not intended that such provision shall provide in any way for the distribution of consideration to eligible members in exchange for the extinguishment of membership interests as set forth in subsection (1)(C).

   1. 2. Any such provision for dividend

expectations may be limited to certain participating individual life insurance policies and/or certain participating individual annuity contracts in force on the date specified in the plan of conversion for which the reorganized insurer has an experience-based dividend scale due, paid or accrued by action of the board of directors of the reorganized insurer in the year in which the plan of conversion is adopted or such other year as may be specified in the plan of conversion.

1. (E) Such plan of conversion shall include the following:

   1. 1. A description of how the conversion

will be effected;

1. 2. A statement of the manner and

method by which membership interests will be extinguished and consideration will be provided to the eligible members;

1. 3. The proposed effective date of the

conversion or the manner in which the proposed effective date of the conversion is or will be established;

1. 4. Copies of the proposed articles of

incorporation and bylaws of the converted holding company; and

1. 5. Any other provisions that the director

determines are necessary in order to comply with paragraphs (1)(B)1. and 2. above.

AUTHORITY: section 374.045, RSMo Supp. 1998.* Original rule filed March 1, 1999, effective Aug. 30, 1999. *Original authority 374.045, RSMo 1967, amended 1993, 1995.