The act states that a domestic stock insurer (dividing insurer) may divide into 2 or more resulting insurers pursuant to a plan of division. A plan of division must include:
- The name of the dividing insurer;
- The name of each resulting insurer created by the proposed division and, for each resulting insurer, a copy of proposed articles of incorporation and proposed bylaws;
- The manner of allocating assets and liabilities, including policy liabilities, between or among all resulting insurers;
- The manner of distributing shares in the resulting insurers to the dividing insurer or the dividing insurer's shareholders;
- A reasonable description of all liabilities and all assets that the dividing insurer proposes to allocate to each resulting insurer, including the manner by which the dividing insurer proposes to allocate all reinsurance contracts;
- All terms and conditions required by the laws of this state and the articles of incorporation and bylaws of the dividing insurer; and
- All other terms and conditions required by the division.
A plan of division must include additional provisions, the nature of which depends on whether the dividing insurer will survive the division.
A dividing insurer shall file a plan of division with the commissioner of insurance (commissioner) only after the plan of division has been approved in accordance with all provisions of the dividing insurer's articles of incorporation and bylaws. The commissioner shall approve the plan of division if, after considering certain criteria, the commissioner finds that certain requirements are met. If the commissioner approves a plan of division, an officer or duly authorized representative of the dividing insurer shall sign a certificate of division that sets forth certain information concerning the division.
The act establishes procedures for amending and abandoning plans of division.
The act provides for the protection of confidential information, documents, and materials that are submitted to, obtained by, or disclosed to the commissioner in connection with a plan of division or in contemplation of a plan of division.
For the 2021-22 state fiscal year, the act appropriates $10,729 from the division of insurance cash fund to the department of regulatory agencies for use by the division of insurance to implement the act.
(Note: This summary applies to this bill as enacted.)