PURPOSE: This rule sets forth the procedures to be used by the director in examining and reviewing a plan of conversion, including, in accordance with section 375.206, RSMo, a standard for the director of insurance in reviewing the amendment or restatement of the articles of incorporation of the mutual holding company.

1. (1) The mutual holding company shall file with the director an application for examination of its plan of conversion and approval of such plan. Such application shall include the following:

   1. (A) A certified copy of the plan of conversion;
   2. (B) A certification that the plan of conversion has been duly adopted by action of not less than three-fourths (3/4) of the entire board of directors of the mutual holding company;
   3. (C) A form of the proposed notice of the meeting of members required by rule 20 CSR 200-16.050;
   4. (D) Copies of the proposed articles of incorporation and bylaws of each constituent corporation;
   5. (E) A list of the officers and directors, together with their biographies, of each constituent corporation;
   6. (F) Financial statements, which may be prepared on a pro forma basis, in the form required by the director;
   7. (G) A summary of the plan of conversion and drafts of written materials to be mailed to members seeking their approval of the plan of conversion; and
   8. (H) Any other additional information that the director may request.

2. (2) The plan of conversion may be approved by the director only if he or she finds that the plan—

   1. (A) Conforms to the requirements of this regulation and section 375.206, RSMo;
   2. (B) Is fair and equitable to the members of the mutual holding company; and
   3. (C) Is not prejudicial to the interest of the policyholders of the reorganized insurer.
3. (3) As part of the director’s examination and review of the plan of conversion, the director shall order a public hearing on the plan. The mutual holding company shall provide members with at least thirty (30) days notice of any such hearing. Such notice shall be provided in the form and manner that the director, in his or her discretion, shall require. The purpose of the hearing shall be to receive comments and information from persons with an interest in the conversion of the mutual holding company for the purpose of aiding the director in making a decision on the plan. The notice of the hearing shall state the purpose, date, time, and location of the hearing and may provide a brief statement of the dates and procedures for submission by any person with an interest in the conversion of the mutual holding company of a) a written statement concerning the plan of conversion, or b) a written notice of intent to make an oral statement at the hearing.
4. (4) The public hearing described in section
5. (3) shall be held within sixty (60) days after the application for examination and approval of a plan of conversion is deemed informationally complete by the director, and at least forty-five (45) days notice of the director’s intent to hold such a hearing shall be provided by the director to the mutual holding company filing such application. The hearing shall be conducted by the director or, at the director’s discretion, his or her designee who shall report to and advise the director on the matter, and the order or determination issued by the director shall have the same force and effect as if the director had conducted the hearing personally. The director’s order or determination shall be issued after the director has received certification of the approval of the plan by the mutual holding company’s members pursuant to rule 20 CSR 200- 16.050 and within thirty (30) days after the conclusion of the hearing. If the application for approval is denied, the director shall issue a written notice to the mutual holding company setting forth the reasons for such denial.
6. (5) For the purpose of examining and reviewing a plan of conversion to determine whether it meets the requirements of this rule 20 CSR 200-16.040, or in connection with any other matters relating to the development of such a plan, the director may engage the services of advisors and consultants. All reasonable costs related to the development, examination and review of a plan and other related matters, including those reasonable costs attributable to the use by the director of such advisors and consultants, shall be paid by the mutual holding company that files a plan of conversion that becomes the subject of an examination and review by the director or, if otherwise legally permissible, by an affiliated company designated by the mutual holding company.

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.