1. A. An association captive insurance company or industrial insured group formed as a stock or mutual corporation may be converted to or merged with and into a reciprocal insurer in accordance with a plan and the provisions of this section.

2. B. A plan for this conversion or merger:

   1. 1. Must be fair and equitable to the shareholders, in the case of a stock insurer, or the policyholders, in the case of a mutual insurer; and
   2. 2. Shall provide for the purchase of the shares of any nonconsenting shareholder of a stock insurer or the policyholder interest of any nonconsenting policyholder of a mutual insurer in substantially the same manner and subject to the same rights and conditions as are accorded a dissenting shareholder or a dissenting policyholder.

3. C. In the case of a conversion authorized under subsection A of this section:

   1. 1. The conversion must be accomplished under a reasonable plan and procedure as may be approved by the Insurance Commissioner; however, the Insurance Commissioner may not approve the plan of conversion unless the plan:

      1. a. satisfies the provisions of subsection B of this section,
      2. b. provides for a hearing, of which notice has been given to the insurer, its directors, officers and stockholders, in the case of a stock insurer, or policyholders, in the case of a mutual insurer, all of whom have the right to appear at the hearing, except that the Insurance Commissioner may waive or modify the requirements for the hearing; however, if a notice of hearing is required, but no hearing is requested, the Insurance Commissioner may cancel the hearing,
      3. c. provides for the conversion of existing stockholder or policyholder interests into subscriber interests in the resulting reciprocal insurer, proportionate to stockholder or policyholder interests in the stock or mutual insurer, and

      4. d. is approved:

         1. (1) in the case of a stock insurer, by a majority of the shares entitled to vote represented in person or by proxy at a duly called regular or special meeting at which a quorum is present, or
         2. (2) in the case of a mutual insurer, by a majority of the voting interests of policyholders represented in person or by proxy at a duly called regular or special meeting at which a quorum is present;
   2. 2. The Insurance Commissioner shall approve the plan of conversion if the Insurance Commissioner finds that the conversion will promote the general good of the state in conformity with those standards set forth in Section 17 of this act;
   3. 3. If the Insurance Commissioner approves the plan the Insurance Commissioner shall amend the certificate of authority of the converting insurer to reflect conversion to a reciprocal insurer and issue the amended certificate of authority to the attorney-in-fact of the company;
   4. 4. Upon issuance of an amended certificate of authority of a reciprocal insurer by the Insurance Commissioner, the conversion is effective; and
   5. 5. Upon the effectiveness of the conversion the corporate existence of the converting insurer shall cease and the resulting reciprocal insurer shall notify the Secretary of State of the conversion.

4. D. A merger authorized under subsection A of this section must be accomplished substantially in accordance with the procedures set forth in the Oklahoma Insurance Code except that, solely for purposes of the merger:

   1. 1. The plan or merger shall satisfy subsection B of this section;
   2. 2. The advisory committee of subscribers of a reciprocal insurer must be equivalent to the board of directors of a stock or mutual insurance company;
   3. 3. The subscribers of a reciprocal insurer must be the equivalent of the policyholders of a mutual insurance company;
   4. 4. If an advisory committee of subscribers does not have a president or secretary, the officers of the committee having substantially equivalent duties are deemed the president and secretary of the committee;
   5. 5. The Insurance Commissioner shall approve the articles of merger if the Insurance Commissioner finds that the merger will promote the general good of the state in conformity with those standards set forth in Section 17 of this act. If the Insurance Commissioner approves the articles of merger, the Insurance Commissioner shall endorse his or her approval on the articles and the surviving insurer shall present the name to the Secretary of State at the office of the Secretary of State;
   6. 6. Notwithstanding Section 13 of this act, the Insurance Commissioner may permit the formation, without surplus, of a captive insurance company organized as a reciprocal insurer, into which an existing captive insurance company may be merged for the purpose of facilitating a transaction under this section; however, there may be no more than one authorized insurance company surviving the merger; and
   7. 7. An alien insurer may be a party to a merger authorized under subsection A of this section if the requirements for the merger between a domestic and a foreign insurer apply to a merger between a domestic and an alien insurer under this subsection. The alien insurer must be treated as a foreign insurer and other jurisdictions must be the equivalent of a state.

Added by Laws 2004, HB 2141, c. 334, § 35, emerg. eff. May 25, 2004.