611.71(6)(am)
(am) 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;
611.71(6)(b)
(b) The acquiring corporation shall do all of the following:
611.71(6)(b)1.
1. 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.
611.71(6)(b)2.
2. 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.
611.71(6)(c)
(c) 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).
611.71(7)
(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% 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) to
(6) are satisfied.
611.71(8)
(8) Acquisition of a small minority of shares. If at least 90% 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) and
(5), even if the offer is accepted by less than the required number of shareholders.
611.72
611.72
Merger or other acquisition of control of a stock insurance corporation. 611.72(1)
(1)
General. Subject to this section,
ss. 180.1101,
180.1103 to
180.1107 [
s. 180.1106],
180.1706,
180.1707 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.
611.72 Note
NOTE: The bracketed language indicates the correct cross-reference.
2001 Wis. Act 44 repealed s. 180.1107. Corrective legislation is pending.
611.72(2)
(2) Approval required. No proposed plan of merger under
s. 180.1101 or
180.1104 or other plan for acquisition of control may be submitted to the shareholders of any domestic stock insurance corporation or its parent insurance holding corporation participating in the transaction or executed unless it has been approved by the commissioner.
611.72(3)
(3) Grounds for disapproval. 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:
611.72(3)(a)
(a) 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;
611.72(3)(b)
(b) 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;
611.72(3)(c)
(c) 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;
611.72(3)(d)
(d) 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
611.72(3)(e)
(e) 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.
611.72(3m)
(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.
611.72(4)
(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) and
(3).
611.73
611.73
Merger of mutuals. 611.73(1)(1)
Authorization, domestic corporations. 611.73(1)(a)(a)
In general. Any 2 or more domestic mutuals may merge under the procedures of this section and
ss. 181.1105 and
181.1106, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.
611.73(1)(b)
(b)
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:
611.73(1)(b)1.
1. The names of the mutuals proposing to merge and the name of the surviving mutual into which they propose to merge.
611.73(1)(b)3.
3. The respective interests and rights of the members of the merging mutuals in the surviving mutual.
611.73(1)(b)4.
4. Any change in the articles of incorporation of the surviving mutual to be effected by the merger.
611.73(1)(b)5.
5. Other provisions with respect to the proposed merger that are considered necessary and desirable.
611.73(1)(c)
(c)
Approval of merger. A plan of merger may be adopted only in the following manner:
611.73(1)(c)1.
1. 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.
611.73(1)(c)2.
2. 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.
611.73(1)(d)
(d)
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.
611.73(2)
(2) Authorization, domestic and foreign corporations. 611.73(2)(a)(a)
In general. 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.
611.73(2)(b)
(b)
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.
611.73(3)
(3) Approval by the commissioner. 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.
611.73(4)
(4) Voting by policyholders. The commissioner may order that the plan submitted to him or her under
sub. (3) be amended to provide for voting by policyholders of any mutual involved.
611.74
611.74
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 or
181.1401 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 to
645, upon approval, the corporation may dissolve under
ss. 180.1402 to
180.1408 and
180.1706, or
ss. 181.1401 to
181.1407, 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.
611.74(2)
(2) Conversion to involuntary liquidation. The corporation may at any time during the liquidation under
ss. 180.1402 to
180.1408 or under
ss. 181.1401 to
181.1407 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).
611.74(3)
(3) Revocation of voluntary dissolution. If the corporation revokes the voluntary dissolution proceedings under
ss. 180.1404 and
180.1706 or under
s. 181.1404, a copy of the articles of revocation of dissolution prepared under
s. 180.1404 or
181.1404 shall be filed with the commissioner.
611.74(4)
(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.
611.75
611.75
Conversion of a domestic stock corporation into a mutual. A domestic stock corporation may be converted into a domestic mutual as follows:
611.75(1)
(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).
611.75(2)(a)(a) 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).
611.75(2)(b)
(b) 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).
611.75(3)
(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.
611.75(4)
(4) Condition for approval. The commissioner shall approve the conversion unless he or she finds, after a hearing, that:
611.75(4)(b)
(b) Its terms are not fair to the shareholders or the policyholders; or
611.75(4)(c)
(c) The resulting mutual would not meet the requirements for a certificate of authority under
s. 611.20.
611.75(5)
(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) may vote.
611.75(6)(a)(a)
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.
611.75(6)(b)
(b)
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.
611.75(7)
(7) Expenses. 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.
611.75 History
History: 1971 c. 260;
1979 c. 102 s.
236 (5).
611.76
611.76
Conversion of a domestic mutual into a stock corporation. 611.76(1)(a)(a)
General. Except under
par. (b), a domestic mutual may be converted into a domestic stock corporation under
subs. (2) to
(11).
611.76(1)(b)
(b)
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.
611.76(1)(c)
(c)
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).
611.76(2)
(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.
611.76(3)(a)(a)
Application. 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:
611.76(3)(a)2.
2. The reason for or the purposes of the proposed conversion are contrary to law or to the interests of the policyholders or the public.
611.76(3)(b)
(b)
Examination. 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.
611.76(3)(c)
(c)
Appraisal. 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.
611.76(3)(d)
(d)
Presumption. 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.
611.76(4)
(4) Plan of conversion. The board may adopt a plan of conversion, which, unless
sub. (4m) applies, shall specify:
611.76(4)(a)
(a) 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);
611.76(4)(b)
(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;
611.76(4)(bm)
(bm) Notwithstanding
par. (b), that each person who was a policyholder of a mutual life insurance company on the date of the resolution under
sub. (2) or within 5 years prior to that date shall be entitled to an equitable share based on a formula which fairly reflects the policyholder's interest in the company and the policies and contracts issued by the company to the policyholder, and which takes into account premiums paid, cash surrender values, policy loans, reserves, surplus, benefits payable and other relevant factors; and that the equitable share shall be provided to the policyholders on a uniform basis approved by the commissioner in the form of common stock, cash, increased benefits, lower premiums or a combination of those forms;
611.76(4)(c)
(c) The procedure for stock subscriptions which shall include a written offer to each such policyholder indicating his or her individual equitable share and the terms of subscription;
611.76(4)(d)
(d) That no common stock under
par. (b) or
(dm) may be issued to persons other than the policyholders under
par. (b) or the corporation under
par. (dm) until all subscriptions by the policyholders and corporation, respectively, have been filled and that thereafter any new issue of stock for 5 years after the conversion shall first be offered to the persons who have become shareholders under
par. (b) or
(dm) in proportion to their interests under
par. (b) or
(dm);
611.76(4)(dm)
(dm) Notwithstanding
par. (b), whether the shares of common stock representing the equitable shares of the policyholders of a mutual life insurance company may, with the approval of the commissioner, be issued to a corporation organized under
ch. 180 with the policyholders to be stockholders of the corporation and, if so issued, that each policyholder is entitled to his or her equitable share calculated under
par. (bm) in shares of common stock of the corporation;
611.76(4)(e)
(e) That no policyholder, other than a policyholder of a mutual life insurance company, may receive a distribution of shares valued in excess of the amount to which he or she is entitled under
s. 645.72 (4). Any excess over that amount shall be distributed in shares to the state treasury for the benefit of the common school fund. After 5 years the shares may be sold by the treasurer at his or her discretion and the proceeds credited to the common school fund; and
611.76(4)(f)
(f) Except with the approval of the commissioner, that during the first 5 years after the conversion the directors and officers of a mutual life insurance company and persons acting in concert with them may not, in the aggregate, acquire control over more than 5% of the common stock of the converted stock life insurance company, the corporation formed under
par. (dm) or any other corporation which acquires control of more than 5% of the common stock of either the converted stock life insurance company or the corporation formed under
par. (dm).
611.76(4m)
(4m) Insurers in financially hazardous condition; plan of conversion. If grounds exist under
s. 645.41 (2) or
(4) for rehabilitation or liquidation of a domestic mutual or are reasonably expected to exist within one year, the board may adopt a plan of conversion which shall specify all of the following:
611.76(4m)(a)
(a) That each person who has been a policyholder and has paid premiums within 5 years prior to the date the resolution is adopted under
sub. (2) is entitled to receive his or her equitable share of the value of the domestic mutual, adjusted to reflect the condition of the domestic mutual immediately prior to the date of conversion; that the equitable share shall be determined by the ratio that the net premium paid by the policyholder during the 5 years immediately preceding the date of the adoption of the resolution under
sub. (2) bears to the total net premium received by the domestic mutual during that period, unless the commissioner approves another method of determining equitable shares with the net premium to be calculated as gross premium less premium returned and dividends paid to policyholders; that each policyholder's equitable share may be distributed in any form including securities of the insurer or another person, debt instruments, property or cash; and that the value of the domestic mutual will be finally determined immediately prior to the date of conversion and with the approval of the commissioner.
611.76(4m)(b)
(b) Any person who will, under the plan of conversion, acquire control of the domestic stock corporation and the manner in which this will occur.
611.76(4m)(c)
(c) That sufficient capital will be contributed or other measures taken to remove any grounds for liquidation under
s. 645.41 (2) or
(4) and to reasonably assure that those grounds will not exist within the 5 years immediately following the date of conversion.
