NY Ins L § 7311 (2021)
2021 New York Laws ISC - Insurance Article 73 - Conversion to Different Type of Insurer 7311 - Conversion of Domestic Mutual Property/casualty Insurance Companies or Advance Premium Corporations Into Domestic Stock Property/casualty Insurance Companies; Insurers in Rehabilitation.

§  7311.  Conversion  of  domestic  mutual property/casualty insurance companies  or  advance  premium   corporations   into   domestic   stock property/casualty insurance companies; insurers in rehabilitation. (a) A domestic  mutual  insurer organized under article twelve of this chapter and licensed pursuant to article forty-one of this chapter and operating pursuant to an order of rehabilitation, or a  domestic  advance  premium corporation  organized  and  licensed  under  article  sixty-six of this chapter and operating pursuant to an order of rehabilitation, may,  upon application  of  the  superintendent and pursuant to an order granted by the court in which the rehabilitation is pending, be  converted  by  the superintendent  into  a  domestic  stock insurer in rehabilitation to be organized under article twelve and licensed under article  forty-one  of this  chapter,  in  accordance  with the provisions of subsection (b) of this section.  (b) Before making such application to the  court,  the  superintendent shall  hold  a  public  hearing,  notice  of  which  shall  be  given by publication in a newspaper of general circulation in the county in which the insurer has its principal office and in the two  largest  cities  in each  state  in  which the insurer has underwritten insurance within one year preceding the date of the order of rehabilitation.  (c) If, after such hearing, the  superintendent  concludes  that  such conversion   is   appropriate   and   is   necessary  for  a  successful rehabilitation or is likely to materially enhance the probability  of  a successful  rehabilitation,  he  may  apply  to  the  court in which the rehabilitation is pending for an order directing  him  to  convert  such insurer into a domestic stock insurer in rehabilitation, pursuant to the plan  of  conversion  that  the superintendent shall propose, subject to court  approval.  The  primary  objective  of  the  plan  shall  be  the successful  rehabilitation  of  the  insurer. In the development of such plan the superintendent  shall  take  into  account  the  policyholders' equity,  if  any,  at  the  time of conversion and may in his discretion provide for a distribution of such equity  to  each  person  who  had  a policy  in  effect  at  any  time  during the three year period (or such shorter  period  that  the  superintendent  determines  is  practicable) preceding   the   date   of   the  filing  of  the  application  by  the superintendent.  The  plan  shall  provide  for  appropriate  procedures necessary  for the implementation of the proposed conversion. Such stock insurer in rehabilitation shall be subject  to  all  of  the  applicable provisions   of  this  chapter,  except  those  provisions  relating  to licensing and financial requirements from which it is  exempted  by  the superintendent. Upon the termination of the order of rehabilitation, the exemptions  granted  by  the  superintendent shall cease and the insurer shall become subject to all applicable provisions of this chapter.  (d) The authorized capital stock of the  new  domestic  stock  insurer shall be held for the benefit of the qualifying prospective shareholders or  purchasers  by an escrow agent appointed by the superintendent. Such stock shall be released to the owners of record after the court approves the conversion and the order of rehabilitation is terminated.  (e) All expenses of the conversion, including the expenses incurred by the department of financial services, shall  be  borne  by  the  company being converted.