174 
(B) in conformance with International Fi-
nancial Reporting Standards (IFRS); 
(2) submit to the jurisdiction of Federal courts 
in the United States; and 
(3) demonstrate that all judgments of all 
United States courts would be enforceable and col-
lectible by— 
(A) being organized or incorporated in a 
jurisdiction— 
(i) with which the United States has 
entered into a treaty on the recognition 
and enforcement of judgments rendered by 
Federal, State, and local courts in the 
United States; 
(ii) which is a signatory to the United 
Nations Convention on the Recognition 
and Enforcement of Foreign Arbitral 
Awards, and agreeing to include in the re-
insurance contract a clause that is satisfac-
tory to the Commissioner requiring that all 
disputes arising out of the interpretation of 
the reinsurance contract be submitted to 
arbitration; or 
(iii) which the Commissioner deter-
mines has, by statutory, regulatory, and 
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judicial law, consistently given recognition 
and enforcement to judgments rendered by 
Federal, State and local courts in the 
United States; or 
(B) agreeing to post prejudgment security 
in the United States upon the commencement 
of any litigation or arbitration in the United 
States, subject to such regulations as the Com-
missioner may prescribe. 
(d) REVOCATION OF LICENSE.— 
(1) IN GENERAL.—The Commissioner may re-
voke, suspend, or restrict a Federal reinsurer’s li-
cense in accordance with subtitle C of title I. 
(2) STATUS OF FEDERALLY LICENSED REIN-
SURER.—For purposes of this subsection, a federally 
licensed reinsurer shall be deemed to be a National 
Insurer under subtitle C of title I. 
(e) ANNUAL REPORTS.—The Commissioner shall re-
quire each reinsurer licensed under this section to submit 
an annual report of its financial condition. 
SEC. 1222. CREDIT FOR INSURANCE CEDED BY A NATIONAL 
INSURER OR FEDERALLY LICENSED REIN-
SURER. 
(a) CREDIT FOR INSURANCE CEDED TO A NATIONAL 
INSURER OR A FEDERALLY LICENSED REINSURER.—A 
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national insurer may establish an asset or reduce its liabil-
ities, to the extent of such liabilities, for insurance ceded 
to another national insurer or federally licensed reinsurer. 
(b) OTHER ASSET OR REDUCTION FROM LIABILITY 
FOR INSURANCE CEDED.—A national insurer may estab-
lish an asset or reduce its liabilities, to the extent of such 
liabilities, for insurance— 
(1) that is ceded to— 
(A) a State insurer; 
(B) a United States branch entered 
through a State; or 
(C) a non-United States insurer; and 
(2) if such insurance is ceded consistent with 
the standards established by the Commissioner pur-
suant to subsection (c). 
(c) REGULATION.—The Commissioner shall establish, 
by regulation, security standards governing the ceding of 
insurance by a National Insurer to any of the entities list-
ed in subsection (b)(1) in order to protect the policy-
holders of a National Insurer, which standards shall not 
be applied in a discriminatory manner with respect to any 
such entity. 
(d) ANNUAL REPORTS.—As a condition of the asset 
or reduction of liabilities treatment, the Commissioner 
may require any entity listed in subsection (b)(1) to sub-
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mit an annual report on the condition of any trust fund 
required as security under this section in such form as 
may be prescribed by the Commissioner. 
SEC. 1223. RELATIONSHIP TO STATE LAW. 
(a) DOMICILIARY STATE DISCRIMINATION PROHIB-
ITED.—Except as provided in section 1224(b), no State 
may, by statute, regulation, order, interpretation, or other-
wise, prevent or interfere with a State insurer domiciled 
in such State or a United States branch entered through 
such State from establishing an asset or reducing its liabil-
ity as a result of insurance ceded to a national insurer 
or a federally licensed reinsurer, to the same extent as the 
State would allow such insurer, if the insurance were 
ceded to another State insurer domiciled in such State. 
(b) NON-DOMICILIARY ACTION PROHIBITED.—No 
State may, by statute, regulation, order, interpretation, or 
otherwise, prevent or interfere with a State insurer not 
domiciled in that State or a United States branch entered 
through another State from establishing an asset or reduc-
ing its liability as a result of insurance ceded to a national 
insurer or a federally licensed reinsurer, if the domicile 
of the ceding insurer allows such asset or reduction. 
SEC. 1224. FREEDOM OF COMMERCIAL CONTRACT. 
(a) PROHIBITION.—Except as provided in subsection 
(b), a State may not— 
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(1) deny a State insurer or a United States 
branch entered through a State all or part of any 
asset, or require any increase in liability for insur-
ance ceded to any national insurer or federally li-
censed reinsurer because its reinsurance contract 
contains, or does not contain, 1 or more specific con-
tract terms; or 
(2) otherwise require specific language or terms 
in any reinsurance contract. 
(b) CONSTRUCTION.—Notwithstanding subsection 
(a), a State may require a State insurer domiciled in such 
State or a United States branch entered through that 
State to use contract terms that are substantially equiva-
lent to those required under section 1222(c). 
SEC. 1225. REVIEW BY THE COMMISSIONER. 
(a) REVIEW.—The Commissioner shall review any 
State action taken pursuant to subsection (b) of section 
1224 to determine if the State action meets the standards 
set forth in that subsection. 
(b) STANDARDS
OF REVIEW.—Any State action 
taken pursuant to section 1224(b) shall meet the stand-
ards of this section, if— 
(1) it is closely based on standards established 
by the Commissioner pursuant to section 1222(c); 
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179 
(2) it is made in consultation with the Commis-
sioner; 
(3) it serves a legitimate State interest; and 
(4) it does not frustrate the subject reinsurance 
contract. 
(c) NOTICE OF FAILURE; EFFECT OF FAILURE.—If 
the Commissioner finds that any State action taken pursu-
ant to subsection (b) of section 1224 fails to meet any 
of the standards set forth in that subsection, the Commis-
sioner shall provide the applicable State and State insurer 
with notice of, and reasons for, such failure, and such 
State action shall be deemed to be subject to section 
1224(a), notwithstanding the terms of section 1224(b). 
(d) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority conferred under this section 
with respect to review by the Commissioner of any State 
action taken pursuant to section 1224(b). 
Subtitle D—Acquisitions of Con-
trol; Mergers; Bulk Transfers; 
Domestication 
SEC. 1231. ACQUISITION OF CONTROL OF NATIONAL INSUR-
ERS. 
(a) DEFINITIONS.—For purposes of this section— 
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(1) the term ‘‘national insurer’’ includes any 
person controlling a national insurer; and 
(2) the term ‘‘person’’ does not include any se-
curities broker holding, in the usual and customary 
functions of the broker, less than 20 percent of the 
voting securities of a national insurer or of any per-
son who controls a national insurer. 
(b) COMMISSIONER APPROVAL REQUIRED.— 
(1) IN GENERAL.—No person, other than the 
issuer, shall make a tender offer for, make a request 
or invitation for tenders of, or enter into any agree-
ment to exchange securities for, or acquire, in the 
open market or otherwise, any voting security of a 
national insurer if, after the consummation of such 
transaction, such person would, directly or indirectly 
(or by conversion or by exercise of any right to ac-
quire) be in control of the national insurer. No per-
son shall enter into an agreement to merge with or 
otherwise acquire control of a national insurer or 
any person controlling a national insurer unless, at 
the time the offer, request, or invitation is made or 
the agreement is entered into, or before the acquisi-
tion of the securities if no offer or agreement is in-
volved— 
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181 
(A) such person has filed with the Com-
missioner and has sent to the national insurer, 
a statement that complies with the regulations 
prescribed under paragraph (3); and 
(B) the offer, request, invitation, agree-
ment, or acquisition has been approved by the 
Commissioner. 
(2) SAVINGS PROVISION.—Nothing in this sub-
section shall be construed to prohibit a person from 
making an offer, request, or invitation or entering 
into an agreement to acquire control of a national 
insurer, if such transaction is conditioned upon ob-
taining the approval of the Commissioner in accord-
ance with paragraph (1). 
(3) FORM AND CONTENT OF STATEMENT.—The 
Commissioner shall, by regulation, prescribe the 
form and content of the statement to be filed under 
paragraph (1)(A). 
(4) APPROVAL BY COMMISSIONER.—The Com-
missioner shall approve any merger or other acquisi-
tion of control referred to in this subsection unless 
the Commissioner finds that— 
(A) after the acquisition of control, the na-
tional insurer would not be able to satisfy the 
requirements for the issuance of a Federal li-
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182 
cense to write the line or lines of insurance for 
which the national insurer was previously li-
censed; 
(B) the financial condition of any acquir-
ing person may jeopardize the financial stability 
of the national insurer or be hazardous to the 
policyholders of the national insurer; 
(C) the plans or proposals of the acquiring 
person to liquidate the national insurer, sell its 
assets, consolidate or merge it with any person, 
or make any other material change in its busi-
ness or corporate structure or management, are 
unfair and unreasonable to policyholders of the 
national insurer and not in the public interest; 
(D) those persons who would control the 
operation of the national insurer lack the com-
petence, experience, or integrity required to pro-
tect the interests of policyholders of the na-
tional insurer; or 
(E) the acquisition is likely to be haz-
ardous to the insurance-buying public. 
(c) HEARING.— 
(1) IN GENERAL.—The Commissioner may, in 
his sole discretion, hold a hearing on a merger or 
other acquisition of control that is subject to this 
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183 
section and for which a statement has been filed 
under subsection (b)(1)(A). 
(2) PROCEDURES.—A hearing under this sub-
section shall be subject to the procedures under sec-
tion 1148, except that the Commissioner may deter-
mine the location of such hearing. 
(d) EXEMPTIONS.—The provisions of this section 
shall not apply to— 
(1) any offer, request, invitation, agreement, or 
acquisition exempted by the Commissioner for not 
having been made or entered into for the purpose, 
and not having the effect, of changing or influencing 
the control of a national insurer, or as otherwise not 
comprehended within the purposes of this section; or 
(2) a merger, consolidation, or acquisition sub-
ject to section 1232. 
(e) VOTING OF SECURITIES.— 
(1) PROHIBITION.—No security which is the 
subject of any agreement or arrangement regarding 
acquisition, or which is acquired or to be acquired, 
in contravention of the provisions of this section may 
be voted at any shareholder meeting, or may be 
counted for quorum purposes. 
(2) EFFECT ON SHARES.—Any action of share-
holders requiring the affirmative vote of a percent-
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184 
age of shares may be taken as though the securities 
described under paragraph (1) were not issued and 
outstanding. 
(3) INVALIDATION
OF
ACTION.—No action 
taken at any meeting described under paragraph (1) 
shall be invalidated by the voting of the securities, 
unless— 
(A) the action would affect control of the 
national insurer; or 
(B) such invalidation is ordered by a court. 
(4) ACQUISITION IN CONTRAVENTION OF THIS 
ACT.—If a national insurer or the Commissioner has 
reason to believe that any security of the national in-
surer has been or is about to be acquired in con-
travention of the provisions of this section, the na-
tional insurer or the Commissioner may apply to the 
United States district court for the judicial district 
in which the main office of the national insurer is 
located or the United States District Court for the 
District of Columbia— 
(A) to enjoin any offer, request, invitation, 
agreement, or acquisition made in contravention 
of this section; 
(B) to enjoin the voting of any security so 
acquired; 
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185 
(C) to void any vote of the security already 
cast at any meeting of shareholders; and 
(D) for such other equitable relief as the 
nature of the case and the interest of the na-
tional insurer’s policyholders, the creditors and 
shareholders of the national insurer or the pub-
lic may require. 
(f) SEQUESTRATION OF VOTING SECURITIES.— 
(1) IN GENERAL.—If a person has acquired or 
is proposing to acquire any voting securities in viola-
tion of this section, the national insurer or the Com-
missioner may request the United States district 
court for the judicial district in which the main of-
fice of the national insurer is located or the United 
States District Court for the District of Columbia 
to— 
(A) seize or sequester any voting securities 
of the national insurer owned directly or indi-
rectly by the person; and 
(B) issue such order as may be appropriate 
to carry out the provisions of this section. 
(2) SITUS
OF
OWNERSHIP.—Notwithstanding 
any other provision of law, for the purposes of this 
section, the situs of ownership of the securities of a 
national insurer shall be deemed to be the State in 
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186 
which the main office of the national insurer is lo-
cated. 
(g) CONFLICT WITH OTHER FEDERAL LAWS.—This 
section shall be interpreted and applied so as not to con-
flict with or supersede the provisions of any other Federal 
law or regulation governing the regulation of holding com-
panies, including financial holding companies (as defined 
in section 2(p) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841(p))). 
(h) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority conferred under this section 
with respect to any merger or other acquisition of control 
of a national insurer. 
SEC. 1232. MERGERS, CONSOLIDATIONS, AND ACQUISI-
TIONS OF NATIONAL INSURERS. 
(a) NATIONAL INSURER AS RESULTING INSURER.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, except as provided under subsection 
(e), a national insurer may, with the approval of the 
Commissioner, merge, consolidate with, acquire all 
or substantially all the assets of, or assume all or 
substantially all the liabilities of, another national 
insurer or a State insurer in a transaction in which 
a national insurer is the resulting insurer, the ac-
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187 
quiring insurer, or the assuming insurer, regardless 
of whether the insurers involved in the transaction 
are in stock form, mutual form, or fraternal form. 
(2) MERGER, CONSOLIDATION, AND
ACQUISI-
TION PROCEDURES.—The Commissioner shall estab-
lish, by regulation, procedures for— 
(A) the merger or consolidation of a na-
tional insurer with another national insurer or 
a State insurer in a transaction in which a na-
tional insurer is the resulting insurer; and 
(B) the acquisition or assumption by a na-
tional insurer of all or substantially all the as-
sets or liabilities of another national insurer or 
a State insurer in a transaction in which the 
national insurer is the acquiring insurer or as-
suming insurer. 
(3) EFFECT OF MERGER OR CONSOLIDATION.— 
Upon the merger or consolidation of a national in-
surer with another national insurer or a State in-
surer under this section— 
(A) the corporate existence of each of the 
merging or consolidating insurers shall be 
merged or consolidated into the resulting in-
surer, and the resulting insurer shall be deemed 
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188 
to be the same corporation as each insurer par-
ticipating in the merger or consolidation; 
(B) except as provided under subpara-
graph (D), the resulting insurer shall hold and 
be subject to all rights, privileges, liabilities, 
property interests, and other interests and obli-
gations that each insurer participating in the 
merger or consolidation held or was subject to 
immediately prior to the merger or consolida-
tion; 
(C) the resulting insurer shall obtain, in 
accordance with section 1203, a Federal license 
for all lines of insurance that it sells, solicits, 
negotiates, or underwrites, except for those 
lines of insurance for which a national insurer 
participating in the merger or consolidation 
held a Federal license immediately before the 
merger or consolidation; and 
(D) the resulting insurer shall not hold any 
State license to sell, solicit, negotiate, or under-
write insurance that was held by a State in-
surer participating in the merger or consolida-
tion. 
(4) SPECIAL
AUTHORITY.—The Commissioner 
may, subject to such conditions as the Commissioner 
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189 
shall prescribe, permit a national insurer resulting 
from a merger or consolidation under this section to 
retain, hold, or exercise such assets, liabilities, pow-
ers, and authorities that do not conform to the legal 
requirements applicable to national insurers, as the 
Commissioner determines appropriate. 
(b) STATE INSURER AS RESULTING INSURER.— 
(1) IN GENERAL.—Subject to applicable State 
law and such notification procedures as the Commis-
sioner shall prescribe by regulation, a State insurer 
may merge with, consolidate with, acquire assets of, 
or assume liabilities of, a national insurer in a trans-
action in which a State insurer is the resulting in-
surer. 
(2) SAVINGS PROVISION.—Nothing in this sub-
section or in a transaction under this subsection 
shall abrogate any rights, privileges, liabilities, prop-
erty interests, or other interests or obligations that 
the national insurer held or was subject to imme-
diately before the transaction. 
(c) EFFECT OF ASSUMPTION OF LIABILITIES.—If the 
liabilities of a national insurer are assumed by another 
national insurer or a State insurer in accordance with this 
Act, the national insurer shall be released from all such 
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190 
liabilities upon their assumption by the other national in-
surer or a State insurer. 
(d) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority conferred under this section 
with respect to any merger, consolidation, acquisition of 
assets, or assumption of liabilities involving a national in-
surer. 
(e) COORDINATION.—This section shall not apply to 
any bulk transfer (as defined in section 1233(a)(2)) that 
is subject to approval of the Commissioner in accordance 
with section 1233(b). 
SEC. 1233. BULK TRANSFERS. 
(a) DEFINITIONS.—In this section, the following defi-
nitions shall apply: 
(1) ASSUMING INSURER.—The term ‘‘assuming 
insurer’’ means the insurer that purchases or other-
wise acquires existing insurance policies from an-
other insurer by bulk transfer. 
(2) BLOCK OF BUSINESS.—The term ‘‘block of 
business’’ means all those insurance policies of an 
insurer under a particular policy form. 
(3) BULK TRANSFER.—The term ‘‘bulk trans-
fer’’— 
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191 
(A) means the transfer by an insurer to 
another insurer of existing insurance policies 
constituting all or substantially all of 1 or more 
of its lines of business or blocks of business; 
and 
(B) does not include— 
(i) any sale in which the transferring 
insurer retains direct or indirect control of 
the assets supporting the transferred in-
surance policies; 
(ii) any transaction effected by an 
agreement under which the transferring in-
surer continues to remain directly liable to 
the policyholders under the insurance poli-
cies; 
(iii) the substitution of 1 insurer for 
another upon the expiration of insurance 
coverage pursuant to statutory or contrac-
tual requirements and the issuance of a 
new policy of insurance by that insurer; 
(iv) the transfer of policies of insur-
ance pursuant to merger or consolidation 
of 2 or more insurers to the extent that 
those transactions are regulated by statute; 
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192 
(v) any transaction effected by an in-
surer subject to a judicial order of receiver-
ship, liquidation, or rehabilitation; or 
(vi) any transfer of liabilities from 1 
insurer to another under a single group in-
surance policy upon the request of the 
group policyholder. 
(4) PERMITTED
NATIONAL
INSURER.—The 
term ‘‘permitted national insurer’’ means— 
(A) a State insurer that is converting to a 
national insurer under section 1206; or 
(B) a national insurer that is being newly 
chartered under section 1201 and licensed 
under section 1203. 
(5) TRANSFERRED INSURANCE POLICIES.—The 
term ‘‘transferred insurance policies’’ means the in-
surance policies that are subject to the bulk transfer. 
(6) 
TRANSFERRING
INSURER.—The 
term 
‘‘transferring insurer’’ means the insurer in privity 
of contract with the policyholders under the existing 
insurance policies that are subject to the bulk trans-
fer. 
(b) BULK TRANSFERS AUTHORIZED.—The following 
bulk transfers are authorized: 
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193 
(1) A State insurer as the transferring insurer 
and a permitted national insurer as the assuming in-
surer. 
(2) A permitted national insurer as the trans-
ferring insurer and a State insurer as the assuming 
insurer. 
(3) A national insurer as the transferring in-
surer and a national insurer as the assuming in-
surer. 
(4) A State insurer as the transferring insurer 
and a national insurer that is not a permitted na-
tional insurer as the assuming insurer. 
(5) A national insurer that is not a permitted 
national insurer as the transferring insurer and a 
State insurer as the assuming insurer. 
(c) COMMISSIONER APPROVAL.— 
(1) IN GENERAL.—A national insurer shall not 
effect a bulk transfer as either the transferring in-
surer or the assuming insurer as authorized under 
paragraph (1), (2), (3), or (5) of subsection (b) 
without the prior approval of the Commissioner, in 
accordance with such regulations as the Commis-
sioner shall prescribe. 
(2) STANDARD OF APPROVAL.—The Commis-
sioner shall approve a bulk transfer under paragraph 
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194 
(1), after notice and a hearing, unless the Commis-
sioner determines that the bulk transfer is likely to 
be hazardous to policyholders of transferred insur-
ance policies, policyholders of the transferring in-
surer, or policyholders of the assuming insurer. 
(d) POLICYHOLDER CONSENT.— 
(1) NO CONSENT REQUIRED.—Notwithstanding 
any other provision of law, a national insurer may, 
upon the approval of the Commissioner, effect a bulk 
transfer under paragraph (1) or (2) of subsection 
(b), as either the transferring insurer or the assum-
ing insurer, without obtaining policyholder consent. 
(2) BETWEEN NATIONAL INSURERS.—Notwith-
standing any other provision of law, a national in-
surer may, upon the approval of the Commissioner, 
effect a bulk transfer under subsection (b)(3) as ei-
ther the transferring insurer or the assuming in-
surer, in accordance with the requirements pre-
scribed by the Commissioner. Such requirements 
shall specify whether policyholder consent to such a 
bulk transfer is required and, if policyholder consent 
is required, the form in which such consent is re-
quired to be given. 
(3) ADDITIONAL PROVISIONS.—In addition to 
any policyholder consent required by any other appli-
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195 
cable provision of law, the Commissioner may pre-
scribe, by regulation, whether policyholder consent is 
required for a bulk transfer authorized under sub-
section (b)(5) and, if policyholder consent is re-
quired, the form in which such consent is required 
to be given. 
(e) RELEASE FROM LIABILITY.—Upon the comple-
tion of a bulk transfer under this section, the transferring 
insurer shall be released from its obligations under the 
transferred insurance policies. 
(f) STATE LAW.— 
(1) PROHIBITION.—Except as provided in para-
graph (2), a State may not, by statute, regulation, 
order, interpretation, or otherwise— 
(A) require a national insurer, a permitted 
national insurer, or a State insurer to— 
(i) obtain policyholder consent to a 
bulk transfer; or 
(ii) submit the bulk transfer to State 
review or action (including approval and 
nondisapproval); or 
(B) prevent or significantly interfere with 
a bulk transfer effected pursuant to this sec-
tion. 
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(2) CONSTRUCTION.—Paragraph (1) shall not 
be construed to prohibit any State from— 
(A) collecting, reviewing, and taking action 
(including approval or disapproval) on applica-
tions and other documents or reports con-
cerning a proposed bulk transfer permitted 
under— 
(i) paragraph (2), (4), or (5) of sub-
section (b) to which a State insurer (other 
than a permitted national insurer) domi-
ciled in that State is a party; or 
(ii) paragraph (4) or (5) of subsection 
(b) to which a State insurer (other than a 
permitted national insurer), other than a 
State insurer domiciled in that State, is a 
party, if the review or action meets the 
standards set forth in paragraph (3); or 
(B) requiring policyholder consent of a 
proposed bulk transfer permitted under para-
graph (4) or (5) of subsection (b). 
(3) STANDARDS.—A review or action meets the 
standards under this paragraph, if it— 
(A) is based on standards that are not 
more onerous than those imposed by the Com-
missioner; 
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(B) occurs within a reasonable time frame 
that advances the purposes of this section; 
(C) is made in close consultation and co-
operation with the Commissioner; 
(D) is without bias or discrimination to-
ward either the transferring insurer or the as-
suming insurer; 
(E) serves a legitimate State interest; and 
(F) does not frustrate the proposed bulk 
transfer. 
(4) NOTICE OF FAILURE.—If the Commissioner 
finds that any State review or action under para-
graph (2)(A) fails to meet any of the standards set 
forth in paragraph (3), the Commissioner may pro-
vide the applicable State with notice of such failure 
and the reasons for such failure. 
(g) DIFFERENTIAL TREATMENT PROHIBITED.—A 
State may not, by statute, regulation, order, interpreta-
tion, or otherwise, treat a national insurer, a permitted 
national insurer, or a State insurer entering into a bulk 
transfer agreement with a national insurer, a permitted 
national insurer, a State insurer, or any affiliate or sub-
sidiary of such insurer, differently than any other insurer 
operating in that State. 
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198 
(h) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority conferred under this section 
with respect to any bulk transfer involving a national in-
surer. 
SEC. 1234. DOMESTICATION OF UNITED STATES BRANCH 
OF A NON-UNITED STATES INSURER. 
(a) DOMESTICATION PERMITTED.—Notwithstanding 
any other provision of law, any non-United States insurer 
having its United States branch entered through a State 
or established pursuant to section 1202, and owning bene-
ficially, directly or indirectly, all outstanding shares of a 
national insurer may, upon the written approval by the 
Commissioner, domesticate its United States branch by 
agreeing in writing with such national insurer to the ac-
quisition of the business and assets, and the assumption 
of all liabilities, of the United States branch, by the na-
tional insurer for no consideration except such assump-
tion. 
(b) APPROVAL BY COMMISSIONER.—If the Commis-
sioner determines that the domestication of a United 
States branch of a non-United States insurer complies 
with the provisions of this section and that the interests 
of policyholders and creditors of the United States branch 
are not materially affected in an adverse manner by such 
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199 
domestication, the Commissioner may approve the domes-
tication in accordance with this section. 
(c) EFFECTIVE DATE OF DOMESTICATION.— 
(1) IN
GENERAL.—The domestication of the 
United States branch shall be effective on the date 
on which a certified copy of the instrument of trans-
fer and assumption is filed with the Commissioner. 
(2) EFFECT OF DOMESTICATION.—On the date 
described in paragraph (1)— 
(A) all rights, franchises, and interests of 
such United States branch in and to every spe-
cies of property, real, personal, and mixed, and 
things in action belonging to such branch, shall 
be deemed transferred to and vested in the ac-
quiring national insurer; 
(B) the acquiring national insurer shall be 
deemed to have assumed all liabilities of the 
United States branch; 
(C) all deposits of the United States 
branch held by State officers or other State 
regulatory agencies under State law shall be re-
leased; and 
(D) the non-United States insurer and the 
United States branch shall be released from all 
liabilities so assumed. 
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200 
(d) RELEASE OF DEPOSITS.—At the time of the do-
mestication of a United States branch under this section, 
the Commissioner shall— 
(1) transfer to the account of the acquiring na-
tional insurer the securities deposited by such 
United States branch in compliance with the provi-
sions of this Act; and 
(2) consent that the trustee of the trusteed as-
sets deposited by such United States branch in com-
pliance with the provisions of this Act shall with-
draw from the trust and transfer and deliver to the 
acquiring national insurer all assets held by such 
trustee. 
(e) WITHDRAWAL AND TRANSFER OF TRUSTEED AS-
SETS.— 
(1) IN GENERAL.—At the time of the domes-
tication of a United States branch established under 
State law, the trustee of any trusteed assets depos-
ited by such United States branch in compliance 
with applicable State law shall, with the consent of 
the Commissioner— 
(A) withdraw the trusteed assets from the 
trust; and 
(B) transfer and deliver to the acquiring 
national insurer all assets held by such trustee. 
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201 
(2) LIMITATION.—No State may, by statute, 
regulation, order, interpretation, or otherwise, pre-
vent, significantly interfere with, review, approve, or 
disapprove the withdrawal of trusteed assets or other 
deposits of a United States branch established under 
State law that is domesticated pursuant to this sec-
tion, if such withdrawal is made contemporaneously 
with or subsequent to the consummation of a domes-
tication of the United States branch under this sec-
tion. 
(f) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority under this section with respect 
to the domestication of a United States branch of a non- 
United States insurer. 
SEC. 1235. MERGERS, CONSOLIDATIONS, AND ACQUISI-
TIONS OF NATIONAL AGENCIES. 
(a) NATIONAL AGENCY RESULTING.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, a national agency may, with the ap-
proval of the Commissioner, merge, consolidate with, 
acquire all or substantially all the assets of, or as-
sume all or substantially all the liabilities of, another 
national agency or a State insurance agency in a 
transaction in which a national agency is the result-
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202 
ing agency, the acquiring agency, or the assuming 
agency. 
(2) MERGER, CONSOLIDATION, AND
ACQUISI-
TION PROCEDURES.—The Commissioner is author-
ized, under such regulations as the Commissioner 
may prescribe, to provide for— 
(A) the merger or consolidation of a na-
tional agency with another national agency or a 
State insurance agency in a transaction in 
which a national agency is the resulting agency; 
and 
(B) the acquisition or assumption by a na-
tional agency of all or substantially all the as-
sets or all or substantially all the liabilities of 
another national agency or a State insurance 
agency in a transaction in which the national 
agency is the acquiring or assuming agency. 
(3) EFFECT OF MERGER OR CONSOLIDATION.— 
Upon the merger or consolidation of a national 
agency with another national agency or a State in-
surance agency under this section— 
(A) the corporate existence of each of the 
merging or consolidating agencies shall be 
merged or consolidated into the resulting agen-
cy, and the resulting agency shall be deemed to 
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203 
be the same corporation as each agency partici-
pating in the merger or consolidation; and 
(B) except as provided under paragraph 
(4), the resulting agency shall have all the 
rights, privileges, liabilities, property interests, 
and other interests and obligations that each 
agency participating in the merger or consolida-
tion had immediately before the merger or con-
solidation. 
(4) LIMITATION.—Upon a merger or consolida-
tion under this subsection, the resulting agency— 
(A) shall not hold any State license to sell, 
solicit, or negotiate insurance that was held by 
a State agency participating in the merger or 
consolidation; and 
(B) shall obtain, in accordance with section 
1301, appropriate licenses for all lines of insur-
ance that it sells, solicits, or negotiates except 
for those lines of insurance for which a national 
agency participating in the merger or consolida-
tion held a Federal producer’s license imme-
diately before the merger or consolidation. 
(5) SPECIAL
AUTHORITY.—The Commissioner 
may, subject to such regulations as the Commis-
sioner may prescribe, permit a national agency re-
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204 
sulting from a merger or consolidation under this 
subsection to retain, hold, or exercise such assets, li-
abilities, powers, and authorities that do not con-
form to the legal requirements applicable to national 
agencies as the Commissioner determines to be ap-
propriate. 
(b) STATE INSURANCE AGENCY RESULTING.— 
(1) IN GENERAL.—Subject to such notification 
procedures as the Commissioner may prescribe by 
regulation, a State insurance agency may merge, 
consolidate with, acquire assets of, or assume liabil-
ities of, a national agency in a transaction in which 
a State insurance agency is the resulting agency, in 
accordance with applicable State law. 
(2) SAVINGS PROVISION.—Nothing in this sub-
section or in a transaction pursuant to this sub-
section shall abrogate any rights, privileges, liabil-
ities, property interests, other interests, or obliga-
tions that the national agency had immediately be-
fore the transaction. 
(c) EFFECT OF ASSUMPTION OF LIABILITIES.—If the 
liabilities of a national agency are assumed by another na-
tional agency or a State insurance agency in accordance 
with the provisions of this Act, such national agency from 
whom the liabilities are assumed shall be released from 
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205 
all liabilities so assumed upon their assumption by the 
other national agency or a State insurance agency. 
(d) NO DELEGATION PERMITTED.—The Commis-
sioner may not delegate to any insurance self-regulatory 
organization any authority conferred under this section 
with respect to any merger, consolidation, or acquisition 
of assets or assumption of liabilities involving a national 
agency. 
Subtitle E—Conversions 
SEC. 1241. DEFINITIONS. 
In this subtitle, the following definitions shall apply: 
(1) ADOPTION
DATE.—The term ‘‘adoption 
date’’ means the date on which the board of direc-
tors of the converting mutual insurer or converting 
stock insurer adopts the plan of conversion. 
(2) CONVERTED MUTUAL INSURER.—The term 
‘‘converted mutual insurer’’ means the national life 
insurer in mutual form into which a stock life in-
surer has been converted in accordance with the pro-
visions of section 1242. 
(3) CONVERTED
STOCK
INSURER.—The term 
‘‘converted stock insurer’’ means the national in-
surer in stock form into which a mutual insurer has 
been converted in accordance with the provisions of 
section 1243. 
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206 
(4) CONVERTING MUTUAL INSURER.—The term 
‘‘converting mutual insurer’’ means the mutual in-
surer that is converting under a plan of conversion 
under section 1243. 
(5) CONVERTING STOCK INSURER.—The term 
‘‘converting stock insurer’’ means the stock life in-
surer that is converting under a plan of conversion 
under section 1242. 
(6) 
MEMBERSHIP
INTERESTS.—The 
term 
‘‘membership interests’’— 
(A) means the interests of members and 
policyholders of the mutual insurer arising 
under the charter and bylaws of the mutual in-
surer or otherwise by applicable law; 
(B) includes the right to vote for directors 
of the mutual insurer and the right to vote on 
any plan of merger or consolidation of the mu-
tual insurer; and 
(C) does not include rights in surplus, if 
any. 
(7) MUTUAL INSURER.—The term ‘‘mutual in-
surer’’ means the State insurer in mutual form or 
national insurer in mutual form that is converting to 
a national insurer in stock form pursuant to a plan 
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207 
of conversion adopted in accordance with section 
1243. 
(8) PLAN
OF
CONVERSION
OR
PLAN.—The 
terms ‘‘plan of conversion’’ and ‘‘plan’’ mean a plan 
of conversion adopted by a stock life insurer or a 
mutual insurer in accordance with this subtitle. 
(9) RIGHTS IN SURPLUS.—The term ‘‘rights in 
surplus’’— 
(A) means rights, if any, of members or 
policyholders of the mutual insurer to a return 
of that portion of the surplus that has not been 
apportioned or declared by the board of direc-
tors for policyholder dividends; 
(B) includes rights of members or policy-
holders of the mutual insurer to a distribution 
of surplus in liquidation or conservation of the 
insurer under applicable law, or in a dissolution 
or winding up; and 
(C) does not include any right expressly 
conferred solely by the terms of an insurance 
policy. 
(10) STOCK LIFE INSURER.—The term ‘‘stock 
life insurer’’ means the State life insurer in stock 
form or national life insurer in stock form that is 
converting to a national life insurer in mutual form 
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208 
pursuant to a plan of conversion adopted in accord-
ance with section 1242. 
SEC. 1242. CONVERSION OF STOCK LIFE INSURER TO NA-
TIONAL LIFE INSURER IN MUTUAL FORM. 
(a) AUTHORITY TO CONVERT.—Notwithstanding any 
other provision of law, a stock life insurer may convert 
to a national insurer in mutual form in accordance with 
a plan of conversion approved by the Commissioner under 
this section that meets the requirements of this section, 
and by complying with the requirements of this section 
and rules issued by the Commissioner under this Act. 
(b) PLAN OF CONVERSION.— 
(1) IN GENERAL.—The plan of conversion re-
quired by this section— 
(A) shall be adopted by the board of direc-
tors of the converting stock insurer; and 
(B) shall provide for the conversion of the 
converting stock insurer into a national life in-
surer in mutual form. 
(2) ISSUANCE
OF
STOCK
AFTER
ADOPTION 
DATE.—No additional shares of capital stock shall 
be issued after the adoption date, except that— 
(A) stock options to purchase capital stock 
may continue to be issued under existing con-
tracts; and 
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209 
(B) outstanding options may continue to 
be exercised until the effective date of the plan 
of conversion. 
(3) CONTENTS.—The plan of conversion shall 
provide for— 
(A) the purchase by the converting stock 
insurer of all of its outstanding capital stock, at 
a price either specified in the plan or to be de-
termined under a formula specified in the plan, 
for cash or other consideration as set forth in 
the plan; and 
(B) the termination, upon terms specified 
in the plan, of any contractual obligation incon-
sistent with the nature of a mutual insurer, in-
cluding any obligation to issue stock options or 
issue capital stock upon exercise of options. 
(c) APPROVAL OF PLAN BY COMMISSIONER.—The 
Commissioner shall approve the plan of conversion re-
quired by this section, if the Commissioner finds, after a 
hearing, that— 
(1) the plan is fair and equitable to the policy-
holders, shareholders, and holders of options to ac-
quire capital stock of the converting stock insurer; 
(2) the plan does not violate the law; and 
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210 
(3) the converted mutual insurer will, after the 
conversion, satisfy the requirements for the issuance 
of a license to write the lines of insurance for which 
it is licensed. 
(d) VOTE ON APPROVAL OF PLAN.— 
(1) STOCKHOLDERS.—The plan of conversion 
shall be submitted to the holders of record on the 
adoption date of the converting stock insurer’s 
shares entitled to vote thereon and shall be subject 
to approval of the holders of a majority of such 
shares. 
(2) POLICYHOLDERS.— 
(A) SUBMISSION.—The plan of conversion 
shall be submitted to policyholders of the con-
verting stock insurer— 
(i) who are insured for at least 
$1,000; and 
(ii) whose policy of insurance is in 
force— 
(I) for a period of at least 1 year 
before the adoption date; 
(II) on the adoption date; and 
(III) on the date of the meeting 
of policyholders called for the purpose 
of approving the plan of conversion. 
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211 
(B) APPROVAL.—The plan of conversion 
shall be subject to the approval of a majority of 
the votes cast by the policyholders described in 
subparagraph (A). 
(e) EFFECT OF CONVERSION ON CONVERTED MU-
TUAL INSURERS.— 
(1) IN GENERAL.—On the effective date of the 
plan of conversion, the stock insurer shall become a 
national life insurer in mutual form and share-
holders eligible to receive consideration under the 
plan of conversion are entitled to receive the consid-
eration specified in the plan in exchange for their 
shares of capital stock of the converting stock in-
surer. 
(2) NO EFFECT ON EXISTING RIGHTS AND LI-
ABILITIES.—The converted mutual insurer is a con-
tinuation of the original stock life insurer, and the 
conversion shall not annul, modify, or change any of 
the original stock life 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 mutual insurer shall— 
(A) exercise all the rights and powers and 
perform all the duties conferred or imposed by 
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212 
law upon insurers writing the classes of insur-
ance written by the converted mutual insurer; 
and 
(B) retain the rights and contracts existing 
prior to conversion, subject to the effect of the 
plan. 
(f) 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 described in para-
graph (1) shall be commenced not later than 30 
days after the date on which the board of directors 
approves a resolution to withdraw the plan. 
(g) EFFECT ON STATE LAW.—No State may, by stat-
ute, regulation, order, interpretation, or otherwise, 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 stock life insurer 
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213 
because the stock life insurer plans to convert, or has con-
verted, to a national life insurer in mutual form under this 
section. 
(h) 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 stock life insurer. 
SEC. 1243. CONVERSION OF MUTUAL INSURER TO NA-
TIONAL INSURER IN STOCK FORM. 
(a) AUTHORITY TO CONVERT.—Notwithstanding any 
other provision of law, a mutual insurer may convert to 
a national insurer in stock form in accordance with a plan 
of conversion approved by the Commissioner under this 
section that meets the requirements of this section, and 
by complying with the requirements of this section and 
the rules issued by the Commissioner under this Act. 
(b) PLAN OF CONVERSION.— 
(1) IN GENERAL.—The plan of conversion— 
(A) shall be adopted by the board of direc-
tors of the converting mutual insurer; 
(B) shall provide for the conversion of the 
converting mutual insurer into a national in-
surer in stock form; and 
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214 
(C) may provide for effecting the conver-
sion by merger of the mutual insurer with an-
other company. 
(2) CONTENTS.—The plan of conversion shall 
provide that— 
(A) all membership interests and rights in 
surplus are extinguished; 
(B) each eligible person will receive, with-
out payment by the person, consideration that 
is allocated among the eligible persons using a 
fair and equitable formula; and 
(C) eligible persons may receive 1 or more 
kinds of consideration, including— 
(i) cash; 
(ii) shares of capital stock of the con-
verting mutual insurer; 
(iii) shares of capital stock (or inter-
ests in shares of capital stock) of a cor-
poration that, after the conversion, directly 
or indirectly, controls the converted stock 
insurer; 
(iv) premium credits; 
(v) enhanced insurance benefits; or 
(vi) in the case of a converting mutual 
insurer that is a life insurer, credits to in-
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215 
surance policy account values, as set forth 
in the plan. 
(c) APPROVAL OF PLAN BY COMMISSIONER.—The 
Commissioner shall approve the plan of conversion re-
quired by this section, if the Commissioner finds, after a 
hearing, that— 
(1) the plan is fair and equitable to the insurer 
and its policyholders; 
(2) the plan does not violate the law; and 
(3) the converted stock insurer will, after the 
conversion, satisfy the requirements for the issuance 
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. 
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