Give written notice of the satisfaction of the requirement, by registered or certified mail return receipt requested, to each holder of shares to which the offer relates who has not yet accepted the offer. The notice, the form of which must be approved by the commissioner, shall include, or be accompanied by, a statement that such shareholders may dissent from the offer by notification to the offeror within 120 days after the date of the mailing and be paid the fair value of their shares as determined under ss. 180.1325
, and that failure so to notify the offeror shall be deemed acceptance of the offer. For purposes of s. 180.1325
, notification to the offeror in accordance with this paragraph constitutes a demand for payment under s. 180.1323
(6) Issuance of certificates or information statements.
Upon the filing of the certificate under sub. (5) (a)
All shares in exchange for which shares of the acquiring corporation are issued shall become the property of the acquiring corporation, whether or not any certificates representing the shares have been surrendered for exchange;
If the articles of incorporation or bylaws of the acquired corporation require shares to be issued with certificates, the acquiring corporation shall be entitled to have new certificates for the shares under par. (a)
registered in its name as the holder;
The acquiring corporation shall do all of the following:
Cause certificates for its shares to be issued and delivered to the holders of shares who have already accepted, and thereafter immediately upon acceptance to those who accept or are deemed to have accepted.
If the shares are issued without certificates, cause information statements that comply with s. 180.0626 (2)
to be issued and delivered to the persons described in subd. 1.
The acquiring corporation or a corporate fiduciary designated by it and acceptable to the commissioner, shall hold in trust, for delivery or payment to the persons entitled thereto but not at once located, the certificates or information statements for its shares and cash payable under sub. (2) (e)
or (5) (b)
(7) Other exchange offers.
This section does not prevent a person from making an offer to purchase the shares of an insurance corporation conditioned upon acceptance by holders of less than 90 percent of the shares to which the offer relates. Such an offer may be joined as an alternate offer with an offer made under this section; but the acquiring corporation shall have the right to avail itself of this section only if the requirements of subs. (1)
(8) Acquisition of a small minority of shares.
If at least 90 percent of any class of shares of any domestic stock insurance corporation are held by any other domestic insurance corporation or its nominee, the owning corporation may proceed under subs. (2)
, even if the offer is accepted by less than the required number of shareholders.
Merger or other acquisition of control of a stock insurance corporation. 611.72(1)(1)
Subject to this section, ss. 180.1101
, and 180.1708 (5)
apply to the merger of a domestic stock insurance corporation or its parent insurance holding corporation, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.
(2) Approval required.
No proposed plan of merger under s. 180.1101
or other plan for acquisition of control of any domestic stock insurance corporation or its parent insurance holding corporation participating in the transaction may be executed unless it has been approved by the commissioner.
The commissioner shall approve the plan if the commissioner finds, after a hearing, unless a hearing is not required under sub. (3m)
, that it would not violate the law or be contrary to the interests of the insureds of any participating domestic corporation or of the Wisconsin insureds of any participating nondomestic corporation and that:
After the change of control, the domestic stock insurance corporation or any domestic stock insurance corporation controlled by the insurance holding corporation would be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
The effect of the merger or other acquisition of control would not be to create a monopoly or substantially to lessen competition in insurance in this state;
The financial condition of any acquiring party is not likely to jeopardize the financial stability of the domestic stock insurance corporation or its parent insurance holding corporation, or prejudice the interests of its Wisconsin policyholders;
The plans or proposals which the acquiring party has to liquidate the domestic stock insurance corporation or its parent insurance holding corporation, sell its assets, merge it with any person or make any other material change in its business or corporate structure or management, are fair and reasonable to policyholders of the domestic stock insurance corporation or in the public interest; and
The competence and integrity of those persons who would control the operation of the domestic stock insurance corporation or its parent insurance holding corporation are such that it would be in the interest of the policyholders of the corporation and of the public to permit the merger or acquisition of control.
If the proposed merger or other acquisition of control will require the approval of more than one commissioner, the hearing under par. (am)
may be held on a consolidated basis upon the request of a person filing a statement with the commissioner of insurance of this state under s. Ins 40.02 (2)
, Wis. Adm. Code, which request must be made when the statement is filed. That person shall file a copy of the statement under s. Ins 40.02 (2)
, Wis. Adm. Code, with the National Association of Insurance Commissioners within 5 days after making the request for a consolidated hearing. A hearing conducted on a consolidated basis shall be public and held within the United States before the commissioners of the states in which the insurers involved in the merger or other acquisition of control are domiciled. The commissioners may hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication.
The commissioner of insurance of this state may opt out of a consolidated hearing, and shall provide notice to the person requesting the consolidated hearing of the opt out within 10 days after the commissioner receives the statement under s. Ins 40.02 (2)
, Wis. Adm. Code.
(3m) Hearing not required.
A hearing is not required under sub. (3)
before approval of a proposed plan of merger or other plan for acquisition of control if the proposed merger is with, or the proposed acquirer is, an affiliate of the insurer and the proposed merger or other acquisition of control does not change the controlling person of the insurer.
(4) Plans of exchange.
Any domestic stock insurance corporation may adopt a plan of exchange of all the outstanding shares of its shareholders under which another stock insurance corporation, which acquires the shares, shall as consideration transfer its own shares or other securities issued by it or pay cash or other consideration, or pay or provide any combination of the foregoing types of consideration. The procedure for the adoption and approval of a plan of exchange and the rights of shareholders of the participating corporations shall be the same as for a merger under subs. (2)
Merger of mutuals. 611.73(1)(1)
Authorization, domestic corporations. 611.73(1)(a)(a)
Any 2 or more domestic mutuals may merge under the procedures of this section and ss. 181.1105
, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.
Plan of merger and board resolution.
The board of directors of each mutual shall, by resolution adopted by each such board, approve a plan of merger that includes all of the following:
The names of the mutuals proposing to merge and the name of the surviving mutual into which they propose to merge.
The respective interests and rights of the members of the merging mutuals in the surviving mutual.
Any change in the articles of incorporation of the surviving mutual to be effected by the merger.
Other provisions with respect to the proposed merger that are considered necessary and desirable.
Approval of merger.
A plan of merger may be adopted only in the following manner:
If the articles of incorporation or bylaws of a merging mutual give members the right to vote on the merger, the board of directors of the mutual shall adopt a resolution approving the proposed plan and directing that it be submitted to a vote at a meeting of members, which may be either an annual or a special meeting. Written notice setting forth the proposed plan or summary of the plan shall be given to each member entitled to vote at the meeting within the time and in the manner provided in this chapter for the giving of notice of meetings of members. The proposed plan shall be adopted by at least two-thirds of the votes entitled to be cast by the members present or represented by proxy at the meeting.
If the articles of incorporation or bylaws of any merging mutual do not give the members the right to vote on the merger, a plan of merger shall be adopted at a meeting of the board of directors of each mutual by at least a majority of the directors in office.
Abandonment of merger.
After approval under par. (c)
and prior to the filing of the articles of merger, the merger may be abandoned pursuant to the provisions for abandonment, if any, set forth in the plan of merger.
(2) Authorization, domestic and foreign corporations. 611.73(2)(a)(a)
Any 2 or more domestic and foreign mutuals may merge if the merger is permitted by the laws of the state in which the foreign mutuals are organized. Each domestic mutual shall comply with the provisions of this section with respect to the merger of domestic corporations and each foreign mutual shall comply with the applicable provisions of the laws of the state under which it is organized.
Effect of merger.
The effect of a merger under this subsection is the same as in the case of the merger of domestic mutuals, if the surviving mutual is to be governed by the laws of this state. If the surviving mutual is to be governed by the laws of a state other than this state, the effect of the merger is the same as in the case of the merger of domestic mutuals except as provided by the laws of that other state.
The plan of merger shall be submitted to the commissioner for his or her approval after any necessary action by the boards and before any necessary action by the policyholders. The commissioner shall approve the plan unless he or she finds, after a hearing, that the proposed merger would be contrary to the law or to the interests of the insureds of any participating domestic corporation or the Wisconsin insureds of any participating nondomestic corporation.
If the proposed merger of 2 or more domestic and foreign mutuals will require the approval of more than one commissioner, the hearing under par. (a)
may be held on a consolidated basis upon the request of a person filing with the commissioner of insurance of this state the plan of merger under par. (a)
and the statement under s. Ins 40.02 (2)
, Wis. Adm. Code. The person must request a consolidated hearing when the plan of merger and statement are filed. That person shall file copies of the plan of merger and the statement under s. Ins 40.02 (2)
, Wis. Adm. Code, with the National Association of Insurance Commissioners within 5 days after making the request for a consolidated hearing. A hearing conducted on a consolidated basis shall be public and held within the United States before the commissioners of the states in which the insurers involved in the merger are domiciled. The commissioners may hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication.
The commissioner of insurance of this state may opt out of a consolidated hearing, and shall provide notice to the person requesting the consolidated hearing of the opt out within 10 days after the commissioner receives the plan of merger under par. (a)
and the statement under s. Ins 40.02 (2)
, Wis. Adm. Code.
(4) Voting by policyholders.
The commissioner may order that the plan submitted to him or her under sub. (3) (a)
be amended to provide for voting by policyholders of any mutual involved.
Voluntary dissolution of domestic insurance corporations. 611.74(1)(1)
Plan of dissolution.
At least 60 days prior to the submission to shareholders or policyholders of any proposed voluntary dissolution of an insurance corporation under s. 180.1402
the plan shall be filed with the commissioner. The commissioner may require the submission of additional information to establish the financial condition of the corporation or other facts relevant to the proposed dissolution. If the shareholders or policyholders adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the corporation. The commissioner shall approve the dissolution unless, after a hearing, the commissioner finds that it is insolvent or may become insolvent in the process of dissolution. Subject to chs. 600
, upon approval, the corporation may dissolve under ss. 180.1402
, or ss. 181.1401
, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner. Upon disapproval, the commissioner shall petition the court for liquidation or for rehabilitation under ch. 645
(2) Conversion to involuntary liquidation.
The corporation may at any time during the liquidation under ss. 180.1402
or under ss. 181.1401
apply to the commissioner to have the liquidation continued under the commissioner's supervision; thereupon the commissioner shall apply to the court for liquidation under s. 645.41 (10)
(3) Revocation of voluntary dissolution.
If the corporation revokes the voluntary dissolution proceedings under ss. 180.1404
or under s. 181.1404
, a copy of the articles of revocation of dissolution prepared under s. 180.1404
shall be filed with the commissioner.
(4) Distribution of assets of a mutual.
No distribution may be made to policyholders in excess of the amounts to which they are entitled under s. 645.72 (4)
. Any excess over such amounts shall be paid into the state treasury to the credit of the common school fund.
Conversion of a domestic stock corporation into a mutual.
A domestic stock corporation may be converted into a domestic mutual as follows:
(1) Action by board.
The board shall adopt a plan of conversion. Thereafter no additional shares of capital stock shall be issued except that stock options to purchase capital stock may continue to be issued under existing contracts and outstanding options may continue to be exercised until the conversion is executed under sub. (6)
The plan of conversion shall provide for the purchase by the corporation of all of its outstanding capital stock, at a price either specified in the plan or to be determined under a formula specified in the plan, for cash, specified debt securities to be issued by the corporation, or both. All holders of capital stock of the same class shall have the same rights under the plan. Shareholders may be given an election to take all or a portion of the price in the specified debt securities. Debt securities may be of any class authorized for mutual corporations under s. 611.33 (2)
The plan shall provide a fair procedure subject to the commissioner's supervision to value contractual obligations of the corporation, such as those relating to stock options, that must be terminated on the date of conversion and are compensable under sub. (6) (b)
(3) Approval requirement.
No conversion may be effected unless the plan of conversion is approved by the commissioner. The corporation shall file with the plan so much of the information under s. 611.13 (2)
for the new mutual as the commissioner reasonably requires.
(4) Condition for approval.
The commissioner shall approve the conversion unless he or she finds, after a hearing, that:
Its terms are not fair to the shareholders or the policyholders; or
The resulting mutual would not meet the requirements for a certificate of authority under s. 611.20
(5) Approval by shareholders.
After the commissioner approves the plan of conversion, it shall be submitted to the shareholders for approval by the affirmative vote of a majority of each class of shares entitled to vote. Only shareholders of record on the date of the adoption under sub. (1)
Continuation of corporation.
If the shareholders approve the plan of conversion under sub. (5)
, the commissioner shall issue a new certificate of authority. The issuance of the certificate is the act of conversion, the corporation at once becomes a mutual and is no longer a stock corporation. The mutual shall be deemed to have been organized at the time the converted stock corporation was organized. The board shall thereupon implement the plan of conversion.
Termination of contract rights.
Any contractual obligation inconsistent with the nature of a mutual, including any obligation to issue or to redeem stock options, shall terminate upon the act of conversion under par. (a)
, without compensation unless the obligation was legally binding before April 30, 1972.
The corporation may not pay compensation of any kind to any person other than regular salaries to existing personnel, in connection with the proposed conversion, other than for clerical and mailing expenses, except that with the commissioner's approval payment may be made at reasonable rates for printing costs and for legal and other professional fees for services actually rendered. All expenses of the conversion, including the expenses incurred by the commissioner and the prorated salaries of any insurance office staff members involved, shall be borne by the corporation being converted.
History: 1971 c. 260
; 1979 c. 102
s. 236 (5)
Conversion of a domestic mutual into a stock corporation. 611.76(1)(a)(a)
Except under par. (b)
, a domestic mutual may be converted into a domestic stock corporation under subs. (2)
Conversion of related insurers.
No domestic mutual that is affiliated with other mutuals may be converted into a stock corporation, unless all such affiliated mutuals are also converted at the same time, or the commissioner finds that the interests of the policyholders of the remaining mutuals can be permanently protected by limitations on the corporate powers of the new stock corporation or on its authority to do business, or otherwise.
Conversion and merger.
A domestic mutual may adopt a plan of acquisition or merger as part of a plan of conversion under this section. The commissioner shall approve the plan of acquisition or merger as part of the plan of conversion unless grounds for disapproval exist under s. 611.72 (3) (am)
(2) Resolution by the board.
The board shall pass a resolution to the effect that such conversion is in the best interests of the policyholders. The resolution shall specify the reasons for and the purposes of the proposed conversion, and the manner in which the conversion is expected to benefit policyholders.
The board shall file with the commissioner the resolution and any additional documents and information he or she reasonably requires, whereupon the commissioner shall order examination and appraisal of the corporation, unless he or she finds that:
The reason for or the purposes of the proposed conversion are contrary to law or to the interests of the policyholders or the public.
The commissioner shall cause to be made an examination of the company under s. 601.43
to determine its financial condition and whether it is operated in accordance with the law.
The commissioner shall appoint an appraisal committee, consisting of at least 3 qualified and disinterested persons with differing kinds of training, to determine the value of the corporation as of the date of the resolution in sub. (2)
or, if sub. (4m)
applies, as of the date of conversion. Members of the committee shall receive reasonable compensation and shall be reimbursed for reasonable expenses in discharging their duties. They may, as reasonably necessary, employ consultants to advise them on technical problems of the appraisal. The appraisal committee shall consider the assets and liabilities of the corporation, adjusting liabilities to take account of the amounts of any reserves in excess of or below realistic estimates, the value of the marketing organization, the value of goodwill, the going-concern value and any other factor having an influence on the value of the corporation, including, in the case of a mutual life insurance company, the estimated amount needed to continue to maintain dividend scales on policies under s. 632.62 (4) (b)
at the same level after conversion as before conversion.
In a proceeding under this section, any report adopted by an appraisal committee under par. (c)
or examination report concerning the domestic mutual or its affiliate is admissible as evidence and the facts asserted in the reports are presumed to be true.
(4) Plan of conversion.
The board may adopt a plan of conversion, which, unless sub. (4m)
applies, shall specify:
The number of shares proposed to be authorized for the new stock corporation, their par value and the price at which they will be offered to policyholders, which price may not exceed one-half of the median equitable share of all policyholders under par. (b)
That each person who has been a policyholder and has paid premiums within 5 years prior to the resolution under sub. (2)
shall be entitled without additional payment to so much common stock of the new stock corporation as his or her equitable share of the value of the converting corporation will purchase; that the equitable share shall be determined by the ratio which the net premium (gross premium less return premium and dividends paid) he or she has paid to the corporation during the 5 years immediately preceding the resolution under sub. (2)
bears to the total net premiums received by the corporation during the same period; and that, if the equitable share is sufficient only for the purchase of a fraction of a share of stock, the policyholder shall have the option either to receive the value of the fractional share in cash or to purchase a full share by paying the balance in cash;