199 
of a license to write the line or lines of insurance for 
which it is licensed. 
(d) VOTE ON APPROVAL OF PLAN.—The plan of con-
version shall be submitted to those persons who are eligible 
to vote on the plan and shall be subject to approval of 
a majority of the votes cast by such persons. 
(e) EMPLOYEE
STOCK
PURCHASES; STOCK
OP-
TIONS.—Subject to regulations prescribed by the Commis-
sioner, the converted insurer or a corporation that, after 
the conversion, directly or indirectly, controls the con-
verted insurer, may establish stock option, incentive, and 
share ownership plans customary for publicly traded com-
panies in the same and similar industries. 
(f) EFFECT OF CONVERSION ON CONVERTED STOCK 
INSURERS.— 
(1) IN GENERAL.—On the effective date of the 
plan of conversion— 
(A) the mutual insurer shall become a Na-
tional Insurer in stock form; 
(B) all membership interests and rights in 
surplus shall be extinguished; and 
(C) persons eligible to receive consideration 
under the plan of conversion shall be entitled to 
receive the consideration specified in the plan in 
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200 
exchange for membership interests and liquida-
tion of rights in surplus. 
(2) NO EFFECT ON EXISTING RIGHTS AND LI-
ABILITIES.—The converted stock insurer is a con-
tinuation of the original mutual insurer, and the 
conversion shall not annul, modify, or change any of 
the original mutual insurer’s existing suits, rights, 
contracts, or liabilities, except as provided in the 
plan of conversion. 
(3) RIGHTS
AFTER
CONVERSION.—After con-
version, the converted stock insurer shall— 
(A) exercise all the rights and powers and 
perform all the duties conferred or imposed by 
law upon insurers writing the classes of insur-
ance written by the converted stock insurer; 
and 
(B) retain the rights and contracts existing 
prior to conversion, subject to the effect of the 
plan. 
(g) LIMITATIONS ON ACQUIRING CONVERTED STOCK 
INSURER.— 
(1) IN GENERAL.—Beginning on the date of en-
actment of this Act and continuing for a period of 
5 years following the effective date of the plan of 
conversion, no person or group of persons acting in 
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201 
concert shall directly or indirectly offer to acquire, 
or acquire in any manner the beneficial ownership 
of, 5 percent or more of any class of voting securi-
ties of a converted insurer or of a person that con-
trols the converted insurer, without the prior consent 
of the Commissioner. 
(2) EFFECT OF VIOLATION.—Upon the viola-
tion of paragraph (1), or any action that, if con-
summated, would constitute such a violation, all vot-
ing securities of the converted insurer or of the per-
son acquired by any person in excess of the max-
imum amount permitted to be acquired by the per-
son under paragraph (1) shall be deemed to be non-
voting securities of the converted stock insurer or of 
that person. 
(3) ENFORCEMENT.— 
(A) COMMENCEMENT.—A violation or ac-
tion described in paragraph (1) may be en-
forced or enjoined by appropriate proceeding 
commenced by the converted stock insurer or 
the Commissioner in— 
(i) the United States district court for 
the judicial district in which the main of-
fice of the converted stock insurer is lo-
cated; 
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202 
(ii) the United States District Court 
for the District of Columbia; or 
(iii) any other court having jurisdic-
tion. 
(B) ORDER.—The court may issue any 
order it finds necessary to cure the violation or 
to prevent the proposed action. 
(h) TIME LIMITS FOR PLAN ACTIONS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, actions concerning any plan of con-
version or proposed plan of conversion under this 
section or any acts taken or proposed to be taken 
under this section shall be commenced not later than 
30 days after the date on which the plan of conver-
sion is approved by the Commissioner under sub-
section (c). 
(2) PLAN WITHDRAWN.—If the plan of conver-
sion is withdrawn, the actions shall be commenced 
not later than 30 days after the date on which the 
board of directors approves a resolution to withdraw 
the plan. 
(i) EFFECT ON STATE LAW.—No State may prevent 
or interfere with a conversion under this section or impede 
the activities of, take any action against, or apply any pro-
vision of law or regulation to, any such mutual insurer 
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203 
because that mutual insurer plans to convert, or has con-
verted, to a National Insurer in stock form under this sec-
tion. 
(j) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority under this section with respect 
to the conversion of a mutual insurer. 
Subtitle F—State Taxation 
SEC. 251. STATE TAXATION OF NATIONAL INSURERS. 
(a) STATE TAXATION RULE.—Except as provided in 
subsection (b), a National Insurer doing business in any 
State shall be subject to all State and local taxes, includ-
ing insurance retaliatory taxes or other similar taxes, and 
shall be entitled to all tax credits, deductions, and offsets 
provided under State law to the same extent and in the 
same manner as an insurer licensed to do business in such 
State and chartered in the State where the National In-
surer is considered domiciled under subsection (c) or (d), 
but shall not be subject to any additional taxes imposed 
by such State by reason of the National Insurer’s failure 
to be licensed or otherwise authorized to conduct business 
or write or sell insurance policies, by such State. 
(b) EXCEPTION.—No State shall have power to im-
pose an insurance retaliatory tax on any National Insurer 
unless— 
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(1) for any tax purpose for which State of 
domicile is relevant, every National Insurer is treat-
ed by such State as domiciled in the State des-
ignated by each National Insurer under subsection 
(c); and 
(2) the insurance retaliatory tax is imposed by 
such State on every National Insurer to the same 
extent and in the same manner as it is imposed on 
every insurer chartered in the State where the Na-
tional Insurer is considered domiciled under sub-
section (c). 
(c) DESIGNATION OF DOMICILE.— 
(1) IN GENERAL.—A National Insurer may des-
ignate, as its State of domicile, by filing such des-
ignation in writing with the Commissioner— 
(A) the State in which the National Insur-
er’s principal place of business in the United 
States is located; or 
(B) in the case of an insurer that has con-
verted from a State insurer to a National In-
surer under this Act, the State in which such 
insurer was domiciled immediately before such 
conversion. 
(2) NO DESIGNATION BY NATIONAL INSURER.— 
If a National Insurer does not make a designation 
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