AN ACT RELATIVE TO THE REORGANIZATION OF CERTAIN INSURANCE COMPANIES.
Whereas, The deferred operation of this act would tend to defeat its purpose, which is to provide forthwith for the reorganization of domestic mutual insurance companies, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Paragraph 1 of section 30 of chapter 63 of the General Laws, as appearing in the 1996 Official Edition, is hereby amended by inserting after the word "sixty-seven H", in line 36, the following words:- or sections 19F to 19W, inclusive, of chapter 175.
SECTION 2. Paragraph 2 of said section 30 of said chapter 63, as so appearing, is hereby amended by inserting after the word "fifty-six B", in line 45, the following words:- or sections 19F to 19W, inclusive, of chapter 175.
SECTION 2A. Section 32 of said chapter 63, as so appearing, is hereby amended by inserting after the word "greater", in line 6, the following words:- , except that an insurance mutual holding company established pursuant to section 19 of chapter 175 shall pay on account of each taxable year, only the excise provided by clause (2) of subsection (a) or subsection (b), whichever is greater.
SECTION 2B. Section 39 of said chapter 63, as so appearing, is hereby amended by inserting after the word "greater", in line 6, the following words:- , except that a foreign insurance mutual holding company organized pursuant to the laws of the state in which it is established shall pay, on account of each taxable year, only the excise provided by clause (2) of subsection (a) or subsection (b), whichever is greater.
SECTION 3. Chapter 175 of the General Laws is hereby amended by inserting after section 19E the following 18 sections:-
Section 19F. Upon compliance with the requirements and completion of the proceedings prescribed by sections 19G to 19W, inclusive, a domestic mutual insurance company may be reorganized as a domestic stock insurer owned, directly or indirectly, by a mutual holding company.
Section 19G. As used in sections 19F to 19W, inclusive, the following words shall, unless the context requires otherwise, have the following meanings:-
"Adoption date", the date the board of directors approves the plan of reorganization.
"Articles of organization" or "charter", a corporation's articles of organization, including any special act of incorporation, as from time to time amended.
"Commissioner", the commissioner of insurance.
"Converted holding company", the stock corporation into which a mutual holding company has been converted in accordance with the provisions of section 19U.
"Effective date", the date upon which the reorganization of the mutual insurer is effective, as provided in subsection (a) of section 19K.
"Equity rights", rights in the equity of a mutual holding company conferred by law or such company's articles of organization, including rights to participate in any distribution of equity or assets whether or not incident to a liquidation of the mutual holding company. Equity rights shall not include any right expressly conferred solely by the terms of a policy.
"Institution", a corporation, joint stock company, limited liability company, association, voluntary association of the type commonly known as a business trust, partnership or any similar entity.
"Intermediate stock holding company", an institution at least 51 per cent of the voting stock of which is owned, directly or through another intermediate stock holding company, by a mutual holding company and which owns, directly or indirectly, not less than 51 per cent of the voting stock of at least one reorganized insurer.
"Member", a person entitled to vote at meetings of a mutual company under such company's charter or by-laws or any general or special law.
"Membership interests", all interests of members of a mutual holding company arising under any special or general law and the charter and by-laws of the mutual holding company or otherwise by law.
"Mutual company", a mutual life insurer, mutual insurer other than life, or mutual holding company.
"Mutual holding company", a corporation organized under sections 19F to 19W, inclusive, the articles of organization of which contain provisions to the following effect:
(i) It is a mutual holding company organized under sections 19F to 19W, inclusive.
(ii) One purpose of such mutual holding company is to own, directly or through one or more intermediate stock holding companies, not less than 51 per cent of the voting stock of one or more reorganized insurers.
(iii) It is not authorized to issue voting stock.
(iv) Its members have the rights specified in subsections (a) to (n), inclusive, of section 19K and in its articles of organization and by-laws.
(v) Its assets and liabilities are, to the extent provided in sections 19F to 19W, inclusive, subject to inclusion in the estate of the reorganized insurer in any proceedings successfully prosecuted against the reorganized insurer under section 6 or sections 180A to 180L, inclusive.
"Mutual insurer", in the case of a plan of reorganization under sections 19F to 19W, inclusive, the mutual life insurer or mutual insurer other than life that is reorganizing pursuant to such plan.
"Person", an individual, partnership, firm, association, corporation, joint-stock company, limited liability company, limited liability partnership, 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.
"Plan of conversion", a plan adopted by a mutual holding company in compliance with section 19U.
"Plan of reorganization", a plan adopted by a mutual insurer in compliance with subsection (a) of section 19H.
"Policy", an individual or group policy of insurance, annuity contract or fidelity or surety bond issued by an insurer.
"Policyholder", the holder of a policy other than a reinsurance contract.
"Reorganized insurer", the domestic stock insurer into which a mutual insurer has been reorganized in accordance with the provisions of sections 19F to 19W, inclusive.
"Reorganizing insurer", for a plan of reorganization under sections 19F to 19W, inclusive, the mutual insurer that is reorganizing under such a plan.
"Stock purchase rights", a nontransferable right granted to each policyholder of the reorganized insurer, subject to any exclusions or limitations authorized by law applicable to particular classes of policyholders, who has been a policyholder for at least one year prior to the effective date, to acquire stock in the reorganized insurer if it conducts an initial public offering of voting stock or in any intermediate stock holding company that conducts an initial public offering of voting stock. No stock purchase right shall provide for a purchase of less than 50 shares of the common stock being offered in the public offering. The price per share shall be equal to the public offering price. In the event that the exercise of such rights exceeds 50 per cent of the number of shares being offered to the public, or such lesser percentage as may be approved by the commissioner, exercise of such stock purchase rights shall be subject to proration, subject to a minimum of 50 shares.
"Voting stock", securities of any class or any ownership interest having voting power for the election of directors, trustees, or management of a person, other than securities having voting power only because of the occurrence of a contingency. All references to a specified percentage of voting stock of any person shall mean securities having the specified percentage of the voting power in that person for the election of directors, trustees, or management of that person, other than securities having voting power only because of the occurrence of a contingency.
Section 19H. (a) The plan of reorganization shall include appropriate proceedings for amending the mutual insurer's articles of organization to give effect to the reorganization from a mutual insurer into a stock corporation. The plan of reorganization shall be:
(1) approved by vote of a three-fourths majority of the board of directors;
(2) submitted to the commissioner for consent in writing, subject to the provisions of subsection (d), by an application executed by an authorized officer of the reorganizing insurer and accompanied by the following documents, or true and correct copies of the documents:
(i) the proposed plan of reorganization;
(ii) the proposed articles of organization of each corporation that is a constituent corporation of the reorganization;
(iii) the proposed by-laws of each corporation that is a constituent corporation of the reorganization;
(iv) a list of the officers and directors, together with their biographies in the form customarily required by the commissioner, of each corporation that is a constituent corporation of the reorganization;
(v) the resolution of the board of directors of the mutual insurer, certified by the secretary of the mutual insurer, authorizing the reorganization under sections 19F to 19W, inclusive;
(vi) financial statements in a form acceptable to the commissioner giving effect to the reorganization for the mutual holding company and any entities which will be subsidiaries of the mutual holding company after the reorganization and which will experience a change in capitalization due to the reorganization;
(vii) a draft of materials to be mailed to members seeking their approval of the plan, including a summary of the plan of reorganization; and
(viii) other relevant information that the commissioner may require.
(3) approved by a vote of not less than two-thirds of the members of the mutual insurer voting at a meeting of the members called for that purpose, subject to the provisions of subsection (e);
(4) filed with the commissioner after receipt of the commissioner's consent, and after having been approved as provided in subsection (d).
(b) A plan of reorganization adopted pursuant to sections 19F to 19W, inclusive, shall demonstrate a purpose and specify reasons for the proposed reorganization, and shall provide that the mutual insurer will become a stock insurer, that the members of the mutual insurer will become members of a mutual holding company, that the owners of policies issued by the reorganizing insurer and in force on the effective date shall as of the effective date have equity rights in the mutual holding company, and that the mutual holding company will acquire, directly or through one or more intermediate stock holding companies, at least 51 per cent of the voting stock of the reorganized insurer.
(c) The commissioner shall hold a public hearing upon the fairness of the terms and conditions of the plan of reorganization, the reasons and purposes for the reorganization of the mutual insurer, and whether the reorganization is in the best interest of said mutual insurer and is fair and equitable to its policyholders, and not detrimental to the insuring public. Notice stating the time, place and purpose of the hearing shall be mailed by the reorganizing insurer to each eligible policyholder, at his last known address as shown on the records of the reorganizing insurer, except in instances where mailing of notice is not feasible as determined by the commissioner. Such notice shall be mailed at least 60 days prior to the date of the hearing. Such notice shall be preceded or accompanied by a true and complete copy of the plan, or by a summary thereof approved by the commissioner, and such other explanatory information as the commissioner shall approve or require. In addition, the reorganizing insurer shall give notice of the time, place and purpose of the hearing by publication in three newspapers of general circulation, one in the county in which the reorganizing insurer has its principal office and two in other cities within or without the state approved by the commissioner. Such newspaper publications shall be made not less than 15 days nor more than 60 days prior to the hearing, and shall be in a form approved by the commissioner. The directors, officers, employees and policyholders of the reorganizing insurer shall have the right to appear and be heard at the hearing.
(d) The commissioner shall, after the public hearing required by subsection (c), approve the plan of reorganization if he finds that: the proposed reorganization is in the best interests of the reorganizing insurer; the plan is fair and equitable to the reorganized insurer's policyholders; the plan provides for the enhancement of the operations of the reorganizing insurer; the plan will not substantially lessen competition in any line of insurance business and, when completed, provides for the reorganized insurer's paid in capital stock to be in an amount at least equal to the minimum paid in capital stock and the net surplus required of a new domestic stock insurer upon its initial authorization to transact like kinds of insurance; and, the plan complies with the requirements of sections 19F to 19W, inclusive. The commissioner shall approve or disapprove the plan in writing on or before 60 days after the conclusion of the public hearing required by subsection (c). The commissioner, if he determines that the plan of reorganization is not fair and equitable to the policyholders, may request that the reorganizing insurer modify said plan prior to his approval or disapproval of said plan; provided, however, that such request does not prevent the reorganizing insurer from withdrawing said plan pursuant to subsections (a) to (n), inclusive, of section 19K. If approval is denied, the denial shall be in writing setting forth a statement of the reasons therefor and the reorganizing insurer shall have the right to a hearing before the commissioner within 30 days of the date of such denial.
(e) The meeting of members prescribed by clause (3) of subsection (a) shall be called by the board of directors, the chairperson of the board or the president of the reorganizing insurer. Notice stating the date, time and place of the meeting shall be mailed by the reorganizing insurer to its policyholders at their last known addresses as shown on the records of the reorganizing insurer, except in instances where mailing of notice is not feasible as determined by the commissioner, and notice given to the holder of a policy shall constitute notice to the member whose membership arises from the policy. Said meeting shall be held no sooner than 30 days after the date of the public hearing pursuant to this subsection. Said notice shall be mailed at least 60 days prior to the date of said meeting. Such notice may be combined with the notice of public hearing mailed to policyholders pursuant to subsection (c). Such notice shall be preceded or accompanied by a true and complete copy of the plan, or by a summary thereof approved by the commissioner, and such other explanatory information as the commissioner shall approve or require including financial statements as described in subclause (vi) of clause (2) of subsection (a), a description of material risks and benefits to policyholders' interests, and any information pertaining to an offering of stock to the public included in the provisions of the plan of reorganization submitted to the commissioner as described in section 19P. Each member entitled to vote on the plan of reorganization shall vote by written ballot cast in person or by mail or by a proxy agent duly appointed by the member. Persons entitled to vote on the plan of reorganization shall be those persons whose names appear on the reorganizing insurer's records as members on the adoption date.
The commissioner shall have the power to supervise and direct and prescribe the rules governing the procedure for the conduct of voting on the proposal to such extent, consistent with the provisions of sections 19F to 19W, inclusive, as he deems necessary to insure a fair and accurate vote. Such powers shall include, but not be limited to, power to supervise and regulate: (a) the determination of policyholders entitled to notice of and to vote on the proposal; (b) the giving of notice of the proposal; (c) the receipt, custody, safeguarding, verification and tabulation of proxy forms and ballots; and (d) the resolution of disputes.
For the purposes of determining whether a reorganization plan meets the requirements of sections 19F to 19W, inclusive, the commissioner may employ staff personnel and private consultants. All reasonable costs related to the review of a plan of reorganization, including costs attributable to the use of staff personnel, shall be borne by the insurer submitting the plan.
Section 19I. No director, officer, agent or employee of the reorganizing insurer, or any other person, shall receive any fee, commission or other valuable consideration whatsoever, other than his usual regular salary and compensation, for in any manner aiding, promoting or assisting in such reorganization, except as set forth in the plan of reorganization approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants and actuaries for services performed in the independent practice of their professions, even though they may be directors of the insurer.
Section 19J. At any time before the plan of reorganization becomes effective as provided in subsections (a) to (n), inclusive, of section 19K, the mutual insurer may, by vote of a three-fourths majority of the board of directors, withdraw or amend the plan of reorganization. Any such plan amendment shall require the written consent of the commissioner. For a plan amendment, all references in sections 19F to 19W, inclusive, to the plan of reorganization shall be deemed to refer to the plan as amended, but no amendment shall be deemed to change the adoption date of the plan of reorganization. No amendment may change the plan of reorganization in a manner that the commissioner determines is prejudicial to the policyholders of the reorganizing insurer, unless a further hearing is held on the plan as amended, if the amendment is made after the initial public hearing, or unless the plan as amended is submitted for reconsideration by the members, if the amendment is made after the plan has been approved by the members.
Section 19K. Upon consent by the commissioner to the plan of reorganization of a mutual insurer and filing of the plan of reorganization in accordance with the provisions of clause (4) of subsection (a) of section 19H, the commissioner shall issue a new certificate of authority to the reorganized insurer and approve the articles of organization of the mutual holding company and amended articles of organization of the reorganized insurer for filing with the state secretary by attaching thereto a certificate of approval in such form as the commissioner may prescribe. The commissioner instead of the state secretary shall have the power to perform the duties relative thereto specified in section 6 of chapter 156B. The plan of reorganization shall be effective upon the filing of the articles of organization of the mutual holding company and amended articles of organization of the reorganized insurer with the state secretary or upon such later date as is specified in the plan of reorganization and amended articles of organization of the reorganized insurer; provided, however, that such later date shall not be more than 30 days after the filing of the articles of organization of the mutual holding company with the state secretary.
(b) Upon the effective date of a plan of reorganization:
(i) the reorganizing insurer immediately shall become a domestic stock insurer and shall be a continuation of the corporate existence of the reorganizing insurer, and for all purposes of this chapter, its articles of organization shall be the amended articles of organization filed in accordance with subsection (a), as they may thereafter be amended in accordance with this chapter;
(ii) all rights of any person to vote, including the right to vote in the election of directors or at annual or special meetings of the reorganizing insurer, or to share in any distribution of, or to receive consideration based upon, the surplus of the reorganizing insurer in liquidation or winding up, in dissolution or conservation or otherwise under the General Laws or the charter or by-laws of the mutual company or otherwise by law, shall be extinguished; provided, however, that rights expressly conferred solely by the terms of a policy, except the right to vote, shall not be extinguished;
(iii) the members of the reorganizing insurer on such effective date shall immediately become members of the mutual holding company; provided, however, that, the rights of a person as a member shall continue only so long as the related policy remains in force;
(iv) owners of policies that make provision for the right to vote issued by the reorganizing insurer and in force on the effective date shall as of the effective date have equity rights in the mutual holding company; provided, however, that, the rights of a person as a holder of equity rights shall continue only so long as the related policy remains in force; and
(v) all of the voting stock initially issued by the reorganized insurer shall be owned, directly or through one or more intermediate stock holding companies, by the mutual holding company.
Owners of policies that make provision for the right to vote that are issued after the effective date by the reorganized insurer shall be members of the mutual holding company and holders of equity rights in the mutual holding company. The rights of a person as a member of a mutual holding company or as holder of equity rights shall continue only so long as the related policy remains in force. Any person may be a member of a mutual holding company.
(c) From the effective date of a plan of reorganization, at least 51 per cent of the issued and outstanding voting stock of the reorganized insurer shall be owned by the mutual holding company or an intermediate stock holding company, and at least 51 per cent of the issued and outstanding voting stock of any intermediate stock holding company shall be owned by the mutual holding company or another intermediate stock holding company. For purposes of these calculations, any issued and outstanding securities of the reorganized insurer or any intermediate stock holding company that are convertible into voting stock are considered issued and outstanding voting stock.
(d) So far as pertinent and not in conflict with the express provisions of this chapter, with other provisions of law relative to mutual holding companies or with their charters:
(i) the mutual holding company shall not engage in the insurance business;
(ii) the mutual holding company shall be a "holding company" within the meaning of sections 206 to 206D, inclusive;
(iii) the general principles of law relative to the powers, duties and liabilities of corporations shall apply to all mutual holding companies;
(iv) sections 46B, 50A, 50B and 60 and the provisions of the third paragraph of section 77 shall be applicable to mutual holding companies;
(v) sections 2 and 7, sections 9 to 13, inclusive, sections 16, 49 and 52, sections 54 to 59, inclusive, and section 67 of chapter 156B, shall be applicable to mutual holding companies;
(vi) the term "stockholders" and other terms of similar meaning where they appear in applicable sections of chapter 156B shall, in the case of a mutual holding company, mean the members thereof; and
(vii) the mutual holding company shall not make any payment of income, dividends contingent upon an apportionment of profits, or any other distribution of profits, except to the limited extent provided in the mutual holding company articles of organization or as otherwise directed or approved by the commissioner. The commissioner shall, subject to the specific authority granted by this chapter, retain jurisdiction at all times over a mutual holding company to assure that the reorganizing insurer's policyholders' interests are protected.
(e) Members of the mutual holding company shall be notified of the annual meetings of the mutual holding company by written notice to all policyholders of the reorganized insurer by first class mail at least 60 days in advance of an annual meeting.
(f) Every member of the mutual holding company shall be entitled to one vote; provided, however, that, except in the circumstances described in sections 36, 132D and 137, every member of the mutual holding company under a policy of life or endowment insurance issued by reorganized insurer shall be entitled to one vote and, except in the case of a policy of life or endowment insurance which is a contract on a variable basis, one vote additional for each $5,000 of insurance in excess of the first $5,000, every member of the mutual holding company holding an annuity or pure endowment contract issued by such insurer shall be entitled to one vote and, except in the case of an annuity contract which is a contract on a variable basis, one vote additional for each $150 of annual annuity income in excess of the first $150, and, except as provided in section 110, every member of the mutual holding company insured under any policy issued by any such insurer under clause Sixth of section 47 shall be entitled to one vote; but no member of a mutual holding company shall, in person or by proxy, cast more than 20 votes.
(g) Members of the mutual holding company may vote by proxies dated and executed within three months of, and returned and recorded on the books of the company seven days or more before, the meeting at which they are to be used.
(h) Any required member approval shall be by the affirmative vote of a majority of the members of the mutual holding company who vote, or a higher percentage of the members as may be required by law or the articles of organization.
(i) The articles of organization or the by-laws of the mutual holding company may provide that the directors may be divided into two or more classes whose terms of office shall expire at different times. No term shall continue longer than six years. In the absence of such provisions, each director shall be elected for a term of one year. All directors shall hold office for the term for which they are elected and until their successors are elected and qualified. Vacancies in the board of directors may be filled by a majority of the remaining directors, though less than a quorum. Each director so elected shall hold office until the next annual meeting.
(j) For a period of ten years from the effective date of a plan of reorganization, if any proceedings under section 6 or sections 180A to 180L, inclusive, are brought naming as a party a stock insurer created as a result of proceedings authorized by sections 19F to 19W, inclusive, the mutual holding company formed as part of the reorganization shall become a party to the proceedings. The assets of the mutual holding company, including, but not limited to, its interest in any intermediate stock holding company formed pursuant to this section, shall be deemed assets of the estate of the reorganized insurer to the extent necessary to satisfy claims of persons against the reorganized insurer who have claims falling within the priorities established in subparagraphs (1) to (4), inclusive, of the fifth paragraph of section 180F; provided, however, that in no event shall a mutual holding company's contribution to the estate of a reorganized insurer pursuant to this sentence exceed the value of assets, net of liabilities, which such reorganized insurer transferred to the mutual holding company or to one or more persons owned or controlled by the mutual holding company pursuant to section 19 O. Claims of persons in their capacity as members of the mutual holding company shall have the same priority as members of a mutual insurer authorized to do the same kinds of business as the reorganized insurer would have upon the liquidation of such an insurer under said section 180F. A mutual holding company may not dissolve, liquidate, or wind up and dissolve without the prior written approval of the commissioner or the court pursuant to proceedings brought pursuant to sections 180A to 180L, inclusive.
(k) Membership interests in a mutual holding company shall not be considered a security as that term is defined by section 401 of chapter 110A. A description of the membership interests and related factual disclosure shall not be considered to be an inducement to buy insurance in violation of section 181 or 182 of this chapter or section 3 of chapter 176D, and receiving such description and related factual disclosure shall not subject the receiver to the provisions of section 183.
(l) A mutual holding company organized under this section may hold, directly or indirectly, multiple subsidiaries, including multiple intermediate stock holding companies, and an intermediate stock holding company may hold multiple subsidiaries; directly or indirectly, including multiple reorganized insurers.
(m) Notwithstanding any general or special law to the contrary, a mutual holding company shall not be permitted to transfer its domicile to any other state without the approval of the commissioner for a period of five years after the effective date.
(n) If the total adjusted capital, as such term is defined in the risk based capital regulations promulgated by the commissioner, effective as of June 30, 1997, and published in 211 CMR 20, of the reorganized insurer is less than 300 per cent of its authorized control level risk based capital, as such term is defined in the risk based capital regulations, as of any calendar year-end after the reorganization effective date, then for so long as such deficiency continues, the reorganized insurer shall not, without prior notice to and review by the commissioner, make any acquisitions of subsidiaries. The restrictions set forth above shall be for the purpose of protecting the solvency of the reorganized insurer and shall be in addition to any other restrictions imposed on such insurer by the risk based capital regulations.
(o) The plan of reorganization or any plan of conversion adopted pursuant to section 19U may also include provisions restricting the ability of any person or persons acting in concert from directly or indirectly offering to acquire or acquiring the beneficial ownership of 10 per cent or more of any class of voting stock of the reorganized insurer or converted holding company, as the case may be, or any entity that, directly or indirectly, controls either.
Section 19L. (a) Notwithstanding any general or special law to the contrary and except as otherwise provided in subsections (c) and (d), actions concerning any plan of reorganization, proposed plan of reorganization, or any plan amendment or proposed plan amendment under section 19J or any acts taken or proposed to be taken under this section, shall be commenced within one year after the plan of reorganization or plan amendment is filed with the commissioner pursuant to clause (4) of subsection (a) of section 19H, or, if the plan of reorganization becomes effective, six months from the effective date of the plan of reorganization, whichever is later. If the plan of reorganization is withdrawn, such actions shall be commenced within six months from the date the board of directors approves a resolution to withdraw the plan. Actions concerning a plan amendment or proposed plan amendment made under section 19M shall be commenced within one year after the plan amendment or proposed plan amendment is filed with the commissioner pursuant to clause (iv) of subsection (b) of said section 19M, or if the amendment becomes effective, six months from the effective date thereof, whichever is later. If a plan amendment or proposed plan amendment made under said section 19M is withdrawn, such actions shall be commenced within six months from the date the board of directors approves a resolution to withdraw the plan. Actions arising out of either a transfer of assets or liabilities pursuant to section 19 O or an offering of voting stock pursuant to section 19P, which transfer or offering is not contemplated by the plan must be commenced within one year from such transfer or offering. Actions concerning any plan of conversion or proposed plan of conversion under section 19U or any acts taken or proposed to be taken under said section 19U shall be commenced within one year after the plan of conversion is filed with the commissioner pursuant to said section 19U or six months from the effective date of the plan of conversion, whichever is later.
(b) In any action referred to in subsection (a), any party adverse to the mutual holding company shall be required, upon motion of the mutual holding company, reorganizing insurer, reorganized insurer or an intermediate stock holding company which establishes to the satisfaction of the court that a substantial likelihood exists that such action is brought without merit and with an intention to delay or harass, at any stage of the proceedings before final judgment, to give adequate security for the damages and reasonable expenses, including attorneys' fees, which may be incurred as a result of, or in connection with, such action by such company and by any other defendants in such action or for which such company may become liable, to which security the mutual holding company, reorganizing insurer, reorganized insurer or an intermediate stock holding company shall have recourse in such amount as the court determines upon the termination of such action. The amount of security may from time to time be increased or decreased in the discretion of the court upon a showing that the security provided has or may become inadequate or excessive.
(c) Notwithstanding any general or special law to the contrary, any action seeking a stay, restraining order, injunction or similar remedy to prevent or delay the closing of any transaction pursuant to sections 19F to 19W, inclusive, or of any transaction described in a plan of reorganization or plan of conversion shall be commenced within 30 days after, as applicable, the approval of the plan of reorganization by the commissioner pursuant to subsection (d) of section 19H, the approval of the commissioner pursuant to section 19 O or 19P or approval of the plan of conversion by the commissioner pursuant to section 19U.
(d) Any action or proceeding against the commissioner or any other governmental body or officer in connection with any act taken or order issued pursuant to sections 19F to 19W, inclusive, shall be commenced within 30 days from the date of such act or signing of such order.
Section 19M. (a) The amended articles of organization of a reorganized insurer that have been adopted pursuant to a plan of reorganization and filed with the state secretary in accordance with subsections (a) to (n), inclusive, of section 19K may be further amended after the effective date pursuant to section 50.
(b) The plan of reorganization may be amended in other respects after the effective date of such plan as specified in this section. Such an amendment shall take effect upon filing with the state secretary after compliance with the following:
(i) approval by a vote of a majority of the board of directors of the reorganized insurer;
(ii) submission to the commissioner for consent in writing, subject to the provisions of subsection (a) of section 19H;
(iii) approval by a majority of those who vote at a meeting of members of the mutual holding company eligible to vote thereon called for the purpose of considering the amendment to the plan. Members eligible to vote thereon shall be members of the mutual holding company who were members of the former mutual insurer and were entitled to vote on the original plan of reorganization; and
(iv) filed with the commissioner after having been consented to and approved as contemplated by clauses (ii) and (iii).
(c) If an amendment proposed under subsection (b) would adversely affect the rights of one or more classes of members, but not all such members, then only the members of each class whose rights would be adversely affected by the proposed amendment are entitled to vote on the proposed plan amendment.
(d) A member meeting prescribed by clause (iii) of subsection (b) shall be called by the board of directors, the chairperson of the board, or the president of the reorganized company. Voting shall be in person, by proxy or by mail at a meeting of members called for that purpose pursuant to the mutual holding company's articles of organization and by-laws.
(e) At any time before the plan amendment becomes effective, the reorganized company may, by vote of a majority of the board of directors, amend the plan amendment or withdraw its plan amendment. For an amendment to a plan amendment, all references in sections 19F to 19W, inclusive, to the plan amendment shall be deemed to refer to the plan amendment as amended. Any amendment of the plan amendment shall require the written consent of the commissioner. No amendment shall be deemed to change the date of adoption of the plan amendment. No amendment made after approval by the members as provided in clause (iii) of subsection (b) may change the plan amendment in a manner that the commissioner determines is prejudicial to any of the affected members unless the plan amendment as amended is submitted for reconsideration under the procedures prescribed in this section for the original plan amendment.
Section 19N. If the name of a mutual insurer reorganizing to a stock insurer pursuant to sections 19F to 19W, inclusive, includes the word mutual, the new stock insurer may continue to use the word mutual in its name unless the commissioner finds that the continued use of the word mutual in its name is likely to mislead or deceive the public.
Section 19 O. In addition to any dividend in compliance with section 72, a reorganized insurer may, either pursuant to the plan of reorganization or upon the prior approval of the commissioner, on any one or more occasions on or after the effective date, transfer assets or liabilities, including any one or more of its subsidiaries, to the mutual holding company or to one or more persons owned or controlled by the mutual holding company; provided, however, that in any such transfer, in either a single instance or in the aggregate, the liabilities so transferred may not be greater than the assets so transferred. The commissioner shall approve such a proposed transfer unless the commissioner finds that the transfer would materially adversely affect the ability of the reorganized insurer to meet its obligations under its policies. If such a transfer is to be made upon the prior approval of the commissioner rather than under a plan of reorganization, the other provisions of sections 19F to 19W, inclusive, including, without limitation, the requirement of filing a plan of reorganization, shall not apply. The provisions of section 206C shall not apply to any transfer effected pursuant to this section.
Section 19P. (a) The offering of voting stock by the reorganized insurer or intermediate stock holding company to any person other than the mutual holding company or a wholly owned subsidiary thereof, which offering is the first to occur after the effective date of the plan of reorganization, shall be made only in accordance with such provisions as the plan of reorganization may contain governing such a first offering, or with the prior approval of the commissioner after submission of an application by the proposed issuer. The commissioner shall approve any such application unless he finds, in the case of a public offering, that the offering would not be conducted in a manner generally consistent with customary practices for initial public offerings, to the extent reasonably comparable, or, in the case of any other offering, that the offering would be prejudicial to the members of the mutual holding company. None of the foregoing shall be deemed to prohibit the filing of a registration statement with the Securities and Exchange Commission and the state secretary prior to such approval.
For the purposes of determining whether an application meets the requirements of this section, the commissioner may employ staff personnel and outside consultants. All reasonable costs related to the review of such an application, including those costs attributable to the use of staff personnel, shall be borne by the issuer submitting the application.
For purposes of this section, any securities of the reorganized insurer or any intermediate stock holding company that are convertible into voting stock shall be considered voting stock.
Section 19Q. In the case of a reorganizing insurer that is a mutual life insurer, upon the effective date the reorganizing insurer shall, at its option, either:
(1) (i) establish a closed block, for policyholder dividend purposes only, consisting of all of the participating individual policies of the reorganizing insurer in force on the effective date and for which the insurer had an experience based dividend scale payable in the year in which the plan of reorganization was adopted, to which, on or before the effective date, shall be allocated assets of the insurer in an amount that produces cash flows, together with anticipated revenues from the closed block business, expected to be sufficient to support the closed block business including provision for payment of claims and those expenses and taxes specified in the plan of reorganization and to provide for continuation of dividend scales in effect on the adoption date, if the experience underlying such scales continues, provided that no policies entering into force after the effective date will be included in the closed block; and
(ii) the terms for the establishment of the closed block may provide for conditions under which, with the approval of the commissioner, the reorganized insurer may cease to maintain the closed block and allocation of assets thereto, but regardless of such a cessation the policies constituting closed block business shall remain obligations of the reorganized insurer and dividends on such policies shall be apportioned by the board of directors of the reorganized insurer in accordance with the terms of such policies and contracts and applicable provisions of any general or special law; or
(2) provide as to participating individual policies of the reorganizing insurer in such manner as the commissioner may approve if he determines that such alternative is substantially as protective of the interests of individual participating policyholders as the establishment of a closed block pursuant to clause (1);
(3) the purpose of the closed block or of the alternate method so approved by the commissioner pursuant to paragraph (2) shall be to protect the contractual rights of the policyholders who own policies as of the effective date. The equity interest of the policyholders of the reorganized insurer shall be equal, in the aggregate, to the value of the entire capital and surplus of the mutual holding company, excluding any funds required to be held in segregated accounts by federal statute, and shall be the basis for consideration to policyholders in the event the mutual holding company converts into a domestic stock corporation as set forth in paragraph (5) of subsection (b) of section 19U;
(4) as of the end of the third year following the year of conversion and as of the end of each third year thereafter, or more frequently as determined by the commissioner, an independent accounting or actuarial firm shall attest to the commissioner, the board of directors of the mutual holding company and the board of directors of the reorganized insurer on whether or not the closed block and related assets, or practice provided for in paragraph (2), has been administered in accordance with the plan of conversion approved by the commissioner. Such firm shall take into consideration the dividend payments to policyholders resulting from the closed block and any other relevant factors. The expenses incurred in retaining the independent accounting or actuarial firm shall be paid by the reorganized insurer. The work of the independent accounting or actuarial firm shall be completed and delivered to the commissioner, the board of directors of the mutual holding company and the board of directors of the reorganized insurer by the close of business on the first day of April following the end of the period for which a report is being provided.
Section 19R. Other requirements applicable to a reorganizing insurer, an intermediate stock holding company and a mutual holding company shall be as follows:
(1) Notwithstanding any other provision of the General Laws, nothing in this section shall be deemed to prohibit provisions under which the officers, directors, employees, agents, and employee benefit plans of the mutual holding company, reorganizing insurer or an intermediate stock holding company, for their benefit, may be entitled, in accordance with reasonable classifications of those individuals and employee benefit plans, to purchase for cash, at the same price as offered to the public in any public offering, voting stock issued by the reorganized insurer or any intermediate stock holding company. Subject to limitations set forth in this section, nothing in sections 19F to 19W, inclusive, shall be deemed to prohibit the establishment of stock option, incentive, and share ownership plans customary for publicly traded companies.
(2) Until six months after the completion of either an initial public offering, private equity placement or the first issuance of public or private stock or securities convertible into voting stock of the reorganized insurer or the intermediate stock holding company to any person other than the mutual holding company or an intermediate stock holding company, neither an intermediate stock holding company nor the reorganized insurer shall award any stock options or stock grants to persons who are officers or directors of the mutual holding company, an intermediate stock holding company or the reorganized insurer; provided, however, that, if a reorganized insurer or its intermediate stock holding company distributes stock purchase rights to the policyholders of a reorganized insurer in connection with a public offering of stock, then directors and officers who are policyholders of such reorganized insurer shall receive and may exercise such stock purchase rights on the same basis as all other such policyholders.
(3) Until two years after the six month period referred to in paragraph (2), the officers, directors and outside directors of the mutual holding company, an intermediate stock holding company and of the reorganized insurer may not own beneficially, in the aggregate, more than 5 per cent of the voting stock of the intermediate stock holding company or the reorganized insurer.
(4) The officers and directors of the mutual holding company, an intermediate stock holding company or the reorganized insurer shall not own beneficially, in the aggregate, more than 18 per cent of the voting stock of the intermediate stock holding company or the reorganized insurer; provided, however, that the commissioner may, in the event of a distress situation find that beneficial ownership of more than 18 per cent is necessary and appropriate.
(5) In no event shall any person, directly or indirectly, offer to acquire or acquire in any manner beneficial ownership of more than 10 per cent of any class of voting securities of the reorganized insurer, any intermediate stock holding company or any other institution which owns, directly or indirectly, a majority of the voting securities of the reorganized insurer without the prior approval of the commissioner.
(6) If the mutual holding company elects to cause an intermediate stock holding company or the reorganized insurer to conduct an initial public offering or initial private equity placement or the initial issuance of voting stock or securities convertible into voting stock of the reorganized insurer or the intermediate stock holding company, it shall, subject to any limitations necessary or appropriate under law applicable to particular classes of policyholders, cause each eligible person to receive stock purchase rights in connection with such initial offering unless a committee of its board of directors consisting of its outside directors determines, by vote of at least two-thirds of the members of such committee, that a stock purchase rights offering would not be in the best interests of its policyholders. Such determination shall be approved by the commissioner.
(7) Any voting stock or securities convertible into voting stock held by officers and directors of the mutual holding company, the intermediate stock holding company and the reorganized insurer shall not be sold for a period of at least one year following the date of the initial offering of such securities, except in the event of death or disability of such officer or director.
(8) Nothing in sections 19F to 19W, inclusive, shall prevent the mutual holding company, the intermediate stock holding company or the reorganized insurer from issuing stock of the intermediate stock holding company or the reorganized insurer to a trust established in connection with an employee stock ownership plan or other employee benefit plan established for the benefit of the employees of the mutual holding company, the intermediate stock holding company or the reorganized insurer and qualified under the Internal Revenue Code. No individual may receive more than 12.5 per cent of any such plan and directors who are not employees shall not receive more than 2.5 per cent of the stock individually or 15 per cent in the aggregate of any plan but in no event shall any individual exceed the limitation on ownership contained in paragraph (4). The voting shares initially issued to employee stock ownership plans or other employee benefit plans, in the aggregate, shall not exceed 5 per cent of the voting shares initially issued.
(9) For purposes of this section, an officer shall mean a person elected as an officer by the board of directors of the mutual holding company, an intermediate stock holding company or the reorganized insurer.
(10) For purposes of this section, an outside director is a director of the mutual holding company, the intermediate stock holding company or the reorganized insurer who is not an officer or employee of either the mutual holding company, the intermediate stock holding company or the reorganized insurer.
Section 19S. (a) Two or more mutual holding companies, at least one of which is a domestic company, may merge or consolidate under the laws of any state of the United States, into a mutual holding company incorporated under the laws of such state. The resulting corporation may be a continuing corporation under the name of one or more of the merged or consolidated corporations or a new corporation. If the continuing or new corporation is to be a domestic corporation: (i) it shall be subject to the provisions of sections 19F to 19W, inclusive, (ii) its name shall be subject to approval by the commissioner and the provisions of section 11 of chapter 156B, (iii) the members of any mutual holding company whose existence will cease upon the effectiveness of such merger or consolidation shall become members of the continuing mutual holding company, and (iv) all persons with equity rights in any mutual holding company whose existence will cease upon the effectiveness of such merger or consolidation shall have equity rights in the continuing mutual holding company.
(b) Companies merging or consolidating under this section shall enter into a written agreement for such merger or consolidation prescribing its terms and conditions. Such agreement shall be assented to by a vote of the majority of the board of directors of each domestic company participating in such merger or consolidation and approved by the votes of at least two-thirds of the members of such company as are present and voting at a special meeting called for the purpose, notice of which meeting shall be given to such persons and in such manner as provided by the commissioner. Such agreement shall be subject to the written approval of the commissioner, who may consider the fairness of the terms and conditions of the agreement, whether the interests of the members of each domestic mutual holding company that is a party to the agreement are protected, and whether the proposed merger or consolidation is in the public interest.
(i) If the continuing or new mutual holding company is to be a domestic company, such agreement shall be executed in duplicate by the president and secretary and by a majority of the board of directors of each company under its corporate seal, shall be accompanied by copies of the resolutions authorizing the merger or consolidation and the execution of the agreement attested by the recording officer of each company and shall, with the records of the companies pertaining thereto, be submitted to the commissioner. If it appears that the requirements of this section have been complied with, the commissioner may so certify and approve the agreement by the commissioner's endorsement thereon. One of the duplicates of such agreement shall thereupon be filed with the state secretary, who shall cause the same to be recorded and shall issue a certificate of reincorporation to the continuing company or the new company with the powers retained and specified in the agreement, and the other duplicate shall be retained by the commissioner. No such agreement shall take effect until it has been filed with the state secretary.
(ii) If the continuing or new company is to be a foreign company, such agreement, and such other information as the commissioner may require, shall be filed with the commissioner and shall not be executed until approved by the commissioner. Upon the execution of such agreement, the new or continuing company shall file with the commissioner, in such form as the commissioner may require, documentary evidence thereof, showing the date when the merger or the consolidation shall become effective. If the commissioner finds that such agreement has been executed in accordance with the commissioner's authorization, the commissioner shall file forthwith with the state secretary a certificate setting forth the fact, including said effective date, and the corporate existence of such company shall cease and determine on said effective date.
(c) No action or proceeding pending in any court of the commonwealth at the time of the merger or consolidation in which any such domestic company may be a party shall abate or be discontinued by reason of the merger or the consolidation, but may be prosecuted to final judgment in the same manner as if the merger or the consolidation had not taken place, or the continuing, surviving or resulting company may be substituted in place of any such domestic company by order of the court in which the action or proceeding is pending.
(d) If the new or continuing company is a domestic company, upon such merger or consolidation all rights and properties of the several companies shall accrue to and become the property of the continuing corporation or the new company which shall succeed to all the obligations and liabilities of the merged or consolidated companies, in the same manner as if they had been incurred or contracted by it.
(e) Nothing in this subsection shall authorize the merger or consolidation of stock companies with mutual holding companies.
Section 19T. (a) By complying with the provisions of sections 19F to 19W, inclusive, a domestic mutual insurance company may reorganize with an existing domestic or foreign mutual holding company, in which case the plan of reorganization of the domestic mutual insurer shall provide that the domestic mutual insurer will become a domestic stock insurer, that the members of the domestic mutual insurer will become members of the mutual holding company, that the owners of policies issued by the domestic mutual insurer and in force on the effective date shall as of the effective date have equity rights in the mutual holding company, and that the mutual holding company will acquire, directly or through one or more intermediate stock holding companies, at least 51 per cent of the voting stock of the reorganized insurer.
(b) An existing domestic mutual holding company may, with the approval of the commissioner:
(i) acquire direct or indirect ownership of a converting foreign mutual insurer that becomes a stock insurer in compliance with the law of its state of domicile;
(ii) grant membership interests and equity rights to the members or policyholders of a foreign mutual insurer that merges with a direct or indirect domestic or foreign subsidiary of the domestic mutual holding company and such a subsidiary, if it is a domestic insurer, may merge with such a foreign mutual insurer pursuant to section 19A or 19B notwithstanding the provisions in said sections to the effect that they do not authorize mergers between mutual insurers and stock insurers.
The commissioner may consider the fairness of the terms and conditions of the transaction, whether the interests of the members of each domestic mutual holding company that is a party to the transaction are protected, and whether the proposed transaction is in the public interest.
Section 19U. (a) A domestic mutual holding company may convert into a domestic stock corporation pursuant to a plan of conversion which complies with subsection (b).
(b) (1) The commissioner shall hold a public hearing upon the fairness of the terms and conditions of the plan of conversion, the reasons and purposes for the conversion of the mutual holding company, and whether the conversion is in the best interest of said mutual holding company and is fair and equitable to its members, and not detrimental to the insuring public. Notice stating the time, place and purpose of the hearing shall be mailed by the converting mutual holding company to each policyholder, at his last known address as shown on the records of the converting mutual holding company; except in instances where mailing of notice is not feasible as determined by the commissioner. Such notice shall be mailed at least 60 days prior to the date of the hearing. Such notice shall be preceded or accompanied by a true and complete copy of the plan, or by a summary thereof approved by the commissioner, and such other explanatory information as the commissioner shall approve or require. In addition, the converting mutual holding company shall give notice of the time, place and purpose of the hearing by publication in three newspapers of general circulation, one in the county in which the converting mutual holding company has its principal office and two in other cities within or without the state approved by the commissioner; such newspaper publications shall be made not less than 15 days nor more than 60 days prior to the hearing, and shall be in a form approved by the commissioner. The directors, officers, employees and policyholders of the reorganized insurer shall have the right to appear and be heard at such hearing.
(2) The commissioner shall, after the public hearing required by paragraph (1), approve the plan of conversion if he finds that: the proposed conversion is in the best interests of the converting mutual holding company; the plan is fair and equitable to the policyholders of the reorganized insurer; the plan provides for the enhancement of the operations of the converting mutual holding company; the plan will not substantially lessen competition in any line of insurance business and, when completed, complies with the requirements of sections 19F to 19W, inclusive. The commissioner shall approve or disapprove the plan in writing on or before 60 days after the conclusion of the public hearing required by paragraph (1). If approval is denied, the denial shall be in writing setting forth a statement of the reasons therefor and the converting mutual holding company shall have the right to a hearing before the commissioner within 30 days of the date of such denial.
(3) A proposal to approve the plan of conversion shall be submitted to the members of the mutual holding company. Such plan shall be approved by vote of not less than two-thirds of the votes of the members of the converting mutual holding company voting thereon in person, by proxy or by mail at a meeting of members called for that purpose. Notice stating the date, time and place of the meeting shall be mailed by the mutual holding company to the policyholders of the reorganized insurer at their last known addresses as shown on the records of the reorganizing insurer, except in instances where mailing of notice is not feasible as determined by the commissioner, and notice given to the holder of a policy shall constitute notice to the member of the mutual holding company whose membership arises from the policy. Such notice shall be mailed at least 30 days prior to the meeting. Such notice may be combined with the notice of public hearing as mailed to policyholders pursuant to paragraph (1). Such notice shall be preceded or accompanied by a true and complete copy of the plan, or by a summary thereof approved by the commissioner, and such other explanatory information as the commissioner shall approve or require. Each member entitled to vote on the plan of conversion shall vote by written ballot cast in person or by mail or by proxy agent or agents duly appointed by the member.
The commissioner shall have the power to supervise and direct and prescribe the rules governing the procedure for the conduct of voting on the proposal to such extent, consistent with the provisions of sections 19F to 19W, inclusive, as he deems necessary to insure a fair and accurate vote; such powers shall include, but not be limited to, power to supervise and regulate (i) the determination of members entitled to notice of and to vote on the proposal; (ii) the giving of notice of the proposal; (iii) the receipt, custody, safeguarding, verification and tabulation of proxy forms and ballots; and (iv) the resolution of disputes.
(4) Upon approval pursuant to this section, the conversion shall be effective as of the date specified in the plan. Upon the effective date of the plan of conversion, all membership interests and equity rights in the mutual holding company shall be extinguished. On and after such date, all the rights, franchises and interests of the mutual holding company in and to every species of property shall be vested in the converted holding company without any deed or transfer and the converted holding company shall succeed to all the obligations and liabilities of the mutual holding company.
(5) In exchange for equity rights in the mutual holding company, such plan shall provide for appropriate consideration. Said consideration shall be equal, in the aggregate, to the value of the entire capital and surplus of the mutual holding company excluding any funds required to be held in segregated accounts by federal statute and shall be determinable under a fair and reasonable formula approved by the commissioner. If the plan of conversion provides for the mutual holding company to continue as a surviving corporation after the conversion, then consideration to the policyholders shall be in the form of stock, cash or other such form of compensation as is approved by the commissioner. Distribution of all of the stock of the former mutual holding company to eligible policyholders, or in the case of certain eligible policyholders other consideration of equivalent value, shall constitute appropriate consideration under sections 19F to 19W, inclusive. If the plan of conversion does not provide for the mutual holding company to continue as a surviving corporation after the conversion, then consideration payable shall be in such form as is otherwise permitted in this section shall be distributed to eligible policyholders.
(6) Such plan shall give each person holding equity rights a preemptive right to acquire his proportionate part of all of the proposed capital stock of the converted holding company, and to apply upon the purchase thereof the amount of their consideration, as determined under paragraph (5), except that the plan may provide that such person may not purchase or receive stock pursuant to this section if it has an aggregate subscription price of $2,000 or less and that such preemptive right will not apply to such persons who reside in jurisdictions in which the issuance of stock is impossible, would involve unreasonable delay or would require the converting company to incur unreasonable costs; provided, however, that any such person shall receive their consideration in cash; and, provided further, in the instance of a plan of conversion in which the appropriate consideration received by persons under paragraph (5) is stock of a corporation in a transaction authorized under this section, or other consideration as approved by the commissioner or, without limiting the generality of the foregoing, as permitted under this paragraph, the plan of conversion shall provide either (i) that no member or person holding equity rights shall have any preemptive right to acquire any of the proposed capital stock of the converted holding company or of the proposed parent or other corporation, or (ii) for preemptive rights on such other terms as approved by the commissioner.
Notwithstanding the foregoing, the commissioner shall have the authority to disapprove such plan in accordance with the provisions of paragraph (2).
(7) The person eligible to participate in the distribution of consideration and to purchase stock shall be the person whose name appears on the conversion date on the mutual holding company's records as a person holding equity rights on both December 31 immediately preceding the conversion date and the date the mutual holding company's board of directors first voted to convert to stock form.
(8) Shares are to be offered to persons holding equity rights at a price not greater than to be thereafter offered under the plan of conversion to others.
(9) Such plan shall provide for payment to each person holding equity rights of consideration which may consist of cash, securities, a certificate of contribution, additional insurance under policies issued by a reorganized insurer or other consideration or any combination of such forms of consideration.
(10) The commissioner shall find that the mutual holding company's management has not, through reduction in volume of new business written or cancellation by a reorganized insurer, or through any other means, sought to reduce, limit or affect the number or identity of the mutual holding company's members or persons holding equity rights to be entitled to participate in such plan or to otherwise secure for the individuals comprising management any unfair advantage through such plan.
(11) Nothing in this section shall be deemed to prohibit the inclusion in the plan of conversion of provisions under which the individuals comprising the management and employee group of the mutual holding company, reorganized insurer or an intermediate stock holding company shall be entitled to purchase for cash at the same price as offered to persons holding equity rights, shares of stock not taken by persons holding equity rights on the preemptive offering to persons holding equity rights, in accordance with such reasonable classification of such individuals as may be included in the plan of conversion and approved by the commissioner.
(12) The plan of conversion may also include provisions restricting the ability of any person or persons acting in concert from directly or indirectly offering to acquire or acquiring the beneficial ownership of 10 per cent or more of any class of voting stock of the converted holding company or the parent corporation or other corporation.
(13) No director, officer, agent or employee of the mutual holding company, or any other person, shall receive any fee, commission or other valuable consideration whatsoever, other than his usual regular salary and compensation, for in any manner aiding, promoting or assisting in such conversion, except as set forth in the plan of conversion approved by the commissioner. This provision shall not be deemed to prohibit the payment of reasonable fees and compensation to attorneys at law, accountants and actuaries for services performed in the independent practice of their professions, even though they may be directors of the mutual holding company.
(14) For the purposes of determining whether a plan of conversion meets the requirements of this section and any other relevant provisions of any general or special law, the commissioner may employ staff personnel and private consultants. All reasonable costs related to the review of a plan of conversion, including costs attributable to the use of staff personnel, shall be borne by the mutual holding company making the filing.
Section 19V. Any transaction entered into by a mutual insurer, either during or after the reorganization process authorized by sections 19F to 19W, inclusive, a principal purpose of which is to avoid the total gross investment income earned excise imposed by section 22A of chapter 63 or the investment privilege excise imposed by section 22B of said chapter 63 shall be disregarded by the department of revenue for purposes of computing said excise for the reorganized insurer. The department of revenue, in consultation with the division of insurance, shall promulgate rules and regulations necessary to implement the provisions of this section, and may consult with representatives of the insurance industry and practitioners.
Section 19W. The commissioner shall promulgate regulations necessary to implement the provisions of sections 19F to 19U, inclusive.