215 ILCS 5/35
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article II - Domestic Stock Companies

 (from Ch. 73, par. 647)(Section scheduled to be repealed on January 1, 2027)Sec. 35.     Stock companies may become mutuals.(1) Any domestic stock company may become a mutual company by  complying with the provisions of this Section.(2) The board of directors shall adopt a mutualization plan and  amended articles of incorporation, which articles shall conform to the  articles required by this Code of a mutual company authorized to  transact the kind or kinds of insurance stated in the articles. The  mutualization plan and amended articles of incorporation shall be  executed in duplicate by the company by its president or vice-president  and its secretary or assistant secretary, or officers corresponding  thereto, and shall be delivered to the Director. The plan and amended  articles of incorporation delivered to the Director may be approved or  disapproved by him in the same manner as original articles of  incorporation. If the Director does not approve the plan and amended  articles, he or she shall notify the company in writing of the reasons for such  disapproval and if requested so to do, shall grant the company a  hearing.(3) If the plan and amended articles of incorporation be approved  by the Director he or she shall place on file in his or her office one of the  duplicate copies of each of the documents, shall endorse upon the other  duplicate copies his approval thereof, and the month, day and year of  such approval, and deliver the same to the company.(4) The plan and amended articles of incorporation shall thereupon  be submitted to and be approved by the shareholders in the same manner  as is required for the submission and approval of amendments to articles  of incorporation.(5) After approval by the shareholders, a written or printed notice  setting forth a copy of the plan and amended articles of  incorporation, or a summary of the same, and stating the time and place  of the special meeting at which they will be considered, and the manner  of voting, shall be mailed to each policyholder of the company at least  thirty days before the date set for such meeting. In a life insurance  company each policyholder shall have one vote for each $1,000 of insurance  which on the day of the meeting has been in force  for one year or longer. In a company other than life, each policyholder  shall be entitled to one vote for each policy in force on the day of the  meeting, and upon which the premium has been paid at the time of the  meeting. A policyholder may vote in person, by proxy or by mail. The  election shall be under the supervision of not less than 3 nor more  than 5 inspectors who shall be appointed by the Director. Such  inspectors shall pass upon the qualifications of the voters, the  validity of the ballots, shall canvass the vote and certify the result  of such vote to the Director and to the company. If 2/3 of the  votes cast at the meeting are in favor of the adoption of the plan, the  said plan shall become effective. All necessary expenses incurred by the  Director or by the inspectors in connection with the vote shall be  certified to by the Director and paid by the company.(6) The plan may provide for the acquisition by the company of  its own shares, by purchase, by gift or otherwise in the manner provided  therein. Any shares so acquired shall be held in trust for the company  and shall be assigned and transferred on the books of the company to  three individual trustees or to any trust company authorized under the  laws of this State to do a trust business, to be chosen or approved by a  majority vote of those policyholders who vote at the meeting referred to  in subsection (5) of this Section, and such trustee or trustees shall  vote the shares held by them or by it at any company meeting. Each such  trustee shall file with the company a verified acceptance of his, hers or its  appointment and a declaration that he or it will faithfully discharge  his, hers or its duties as such trustee. Any dividends or other sums acquired  or accruing to the trustees upon shares coming within their trusteeship  shall upon the termination of the trust be delivered to the company.(7) If a shareholder of the company shall file with such company,  prior to or at the meeting of shareholders at which the plan of  mutualization is submitted to a vote, a written objection to such plan  and shall not vote in favor thereof, and such shareholder within 20  days after the plan is approved by such meeting shall make written  demand on the company for payment of the fair value of his shares as of  the day prior to the date on which such plan is approved by the  shareholders, such shareholder shall be entitled to receive prior to the  completion of the plan, upon surrender of his certificate or  certificates representing said shares, such fair value thereof. Any  shareholder who fails to make such objection or having objected fails to  make demand within the 20 day period shall be conclusively presumed  to have consented to the said plan and shall be bound by the terms  thereof.(8) If within 30 days after the date of the written demand  mentioned in subsection (7), the value of such shares is agreed upon  between the dissenting shareholder, the company and the Director,  payment therefor shall be made within 90 days after the date of such  agreement upon the surrender of his or her certificate or certificates  representing the shares. Upon payment of the agreed value the  dissenting shareholder shall cease to have any interest in such shares  and cease to be a shareholder in the company.(9) If, within such period of 30 days, the shareholder and the  company do not so agree, then the dissenting shareholder may within 60  days after the expiration of the 30 day period, petition the  Circuit Court of the county in which the principal office of  the company is located, to appraise the value of such shares as of the  date of the day prior to the date on which such vote was taken approving  such plan. A copy of the petition shall be delivered or mailed by  registered mail to the Director within 5 days after the filing  thereof and proof of such delivery or mailing shall be filed with the  court. The Director shall have the right to appear through the Attorney  General and be heard upon all questions and issues in the proceeding.  The practice, procedure, and judgment shall be, so far as practicable,  the same as that under the eminent domain laws of this State.(10) The judgment shall be payable only upon and simultaneously with  the surrender to the company of the certificate or certificates  representing the shares. Upon the payment of the judgment the  dissenting shareholder shall cease to have any interest in such shares,  and cease to be a shareholder in the company. Unless the dissenting  shareholder shall file such petition within the time herein limited,  such shareholder and all persons claiming under him or her shall be  conclusively presumed to have approved and ratified the mutualization  plan, and shall be bound by the terms thereof. The right of a dissenting  shareholder to be paid the fair value of his shares as herein provided  shall cease if and when the company shall abandon the mutualization  plan.(11) When all the shares of the Company have been acquired and  cancelled in conformity with the plan and this Section, the Director  shall issue a certificate to that effect, and the amended articles of  incorporation shall thereupon become effective and the company shall  thenceforth be a mutual company.(12) The certificate mentioned in subsection (11) together with the  duplicate original of the amended articles of incorporation theretofore  approved by the Director shall be filed for record in the office of the  recorder where the principal office of the company is located,  within 15 days from the date of such certificate.    (Source: P.A. 83-358.)