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2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4931. Affiliation of stock insurers.

§ 4931. Affiliation of stock insurers.
(a) A domestic stock insurer shall not acquire a controlling interest in the shares of another stock insurer by an exchange of securities or partly in exchange for securities and partly for cash or property, unless the insurer has first submitted the plan for such acquisition and exchange to the Commissioner and the Commissioner has approved the same.
(b) The Commissioner shall not so approve unless the Commissioner finds the plan for such acquisition and the terms and conditions thereof to be fair and equitable to all parties concerned therein after a hearing to which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear.
(c) Notice and conduct of such hearing shall be as provided in Chapter 3 of this title.
18 Del. C. 1953, §  4931;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4934. Merger, consolidation — Allowable circumstances; “surviving insurer” defined.

§ 4934. Merger, consolidation — Allowable circumstances; “surviving insurer” defined.
(a) A domestic mutual insurer shall not merge or consolidate with a stock insurer.
(b) A domestic mutual insurer may merge or consolidate with another domestic or foreign mutual insurer under the procedures provided for in this and §§ 4935-4942 of this title.
(c) If for a consolidation and the new corporation is to be domiciled in this State, the new corporation shall be formed under the applicable provisions of the general corporation laws of this State.
(d) For the purposes of this chapter the “surviving insurer” is that which survives and continues as a result of a merger of 2 or more corporations into 1 corporation.
18 Del. C. 1953, §  4934;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4935. Merger, consolidation of mutual insurers — Approval of merger; consolidation agreement by boards of directors.

§ 4935. Merger, consolidation of mutual insurers — Approval of merger; consolidation agreement by boards of directors.
(a) The board of directors of each of the mutual insurers proposing to merge or consolidate shall, by resolution adopted by at least a majority of all the members of each board, approve a joint agreement of merger or consolidation, as the case may be, between the insurer parties, setting forth the terms and conditions of the merger or consolidation, the mode of carrying the same into effect and such other provisions as are deemed advisable.
(b) Upon approving such agreement, each such board shall by resolution direct that the same be submitted to the Commissioner and be subject to the Commissioner's disapproval as provided in § 4936 of this title and to approval of the members of the respective insurers as provided in § 4937 of this title.
18 Del. C. 1953, §  4935;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4936. Merger, consolidation of mutual insurers — Effectuation; disapproval by Commissioner.

§ 4936. Merger, consolidation of mutual insurers — Effectuation; disapproval by Commissioner.
(a) No such merger or consolidation of a domestic mutual insurer shall be effectuated unless in advance thereof the agreement therefor has been filed with the Commissioner and has not been disapproved by the Commissioner in writing. If the insurer is not then impaired, the Commissioner shall not act with respect to such agreement until after a hearing thereon. The agreement shall be effectuated in accordance with its terms unless the Commissioner disapproves the same within 10 days after the date of such filing or the conclusion of such hearing, if any, whichever is the later date, subject to the Commissioner's right to have a reasonable extension of time not to exceed 10 days upon written notice to the insurers involved. The Commissioner may disapprove the agreement upon one or more of the following grounds—that the agreement:
(1) Is inequitable to the policyholders of any domestic insurers involved; or
(2) Would materially reduce the security of and service to be rendered to policyholders of the domestic insurer in this State and elsewhere; or
(3) Would materially tend to lessen competition in this State or elsewhere as to the kinds of insurance involved or would materially tend to create a monopoly therein; or
(4) Is subject to other reasonable objections.
(b) If the Commissioner disapproves the agreement the Commissioner shall so notify the insurers in writing specifying the reasons therefor.
(c) No director, officer, agent or employee of any insurer involved or any other person shall receive any fee, commission or other valuable consideration whatsoever, other than their usual regular salaries and compensation, for in any manner aiding, promoting or assisting in such merger or consolidation except as set forth in the agreement approved by the Commissioner. This provision shall not be deemed to prohibit payment of reasonable fees and compensation to attorneys-at-law, accountants and actuaries for services performed in the independent practice of their professions even though also directors of the insurer.
18 Del. C. 1953, §  4936;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4937. Merger, consolidation of mutual insurers — Approval by members.

§ 4937. Merger, consolidation of mutual insurers — Approval by members.
(a) After the Commissioner has approved the proposed agreement of merger or consolidation and if the insurer is then unimpaired, the agreement shall be submitted to the domestic insurer's members for approval at a regular or special meeting of members. If a life insurer, right to vote shall be limited to members whose policies are other than term policies for terms of less than 20 years and other than group policies and have been in force for at least 1 year.
(b) Not less than 15 days before such meeting written notice of the meeting and of the proposed merger or consolidation shall be given to each member of the insurer. The notice shall state the day, hour, place and purposes of the meeting and be accompanied by a copy or summary of agreement of merger or consolidation as the case may be. Notice and accompanying copy or summary shall be deemed given when enclosed in an envelope addressed to the member at the member's address last of record with the insurer and deposited postage paid in a depository of the United States post office. In the case of mutual insurers with more than 10,000 members, in lieu of such notice by mail, such notice may be given by publication in a newspaper of general circulation in either of the 2 largest cities in each state in which the insurer shall be authorized to transact an insurance business.
(c) Upon receiving the affirmative vote of 2/3 of all votes cast by members present or represented at the meeting, the agreement shall be deemed to have been approved. Each member of the insurer shall be bound by such vote without right of dissent other than the right to vote against the proposal at the meeting. Such a dissenting member shall have no right or equity as to the assets of the insurer except as expressly provided in the member's policy or policies.
(d) In the event that a mutual insurer shall have no members entitled to vote, the merger agreement need not be submitted to its members, and notice need not be given to its members, and the Commissioner may approve the agreement of merger or consolidation without a hearing thereon, and the same may be effectuated without approval of the insurer's members.
18 Del. C. 1953, §  4937;  56 Del. Laws, c. 380, §  1;  59 Del. Laws, c. 79, §§  37, 38;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4938. Merger, consolidation of mutual insurers — Impaired mutuals.

§ 4938. Merger, consolidation of mutual insurers — Impaired mutuals.
If a domestic mutual insurer is then impaired, that is, if the insurer's surplus is less than the amount thereof required under this title for authority to transact the kinds of insurance being transacted by the insurer, the Commissioner may approve the agreement of merger or consolidation without a hearing thereon, and the same may be effectuated without approval of the insurer's members.
18 Del. C. 1953, §  4938;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4939. Merger, consolidation of mutual insurers — Articles of merger, consolidation, mutual insurers.

§ 4939. Merger, consolidation of mutual insurers — Articles of merger, consolidation, mutual insurers.
Upon the approval by the Commissioner and members, if required, and upon agreement of merger or consolidation, articles of merger or consolidation, as the case may be, shall be executed under the seal of each insurer and verified by a duly authorized officer of each insurer and shall set forth as applicable:
(1) The name of the surviving or new corporation.
(2) The time and place of the meeting of the directors at which the agreement of merger or consolidation was approved and, except where pursuant to § 4938 of this title, the agreement is not submitted to a vote of the members of the insurer, the time and place of the meeting of the members of each insurer at which the agreement of merger or consolidation, as the case may be, was approved, the kind and period of notice given to the members and the total vote by which the agreement was approved.
(3) In the case of a merger into a surviving insurer, any changes desired to be made in the articles of the surviving insurer or in the case of a consolidation into a new domestic insurer, all of the statements required by law to be set forth in the original articles in the case of the formation of a domestic insurer.
(4) The number, names and addresses of the persons to be the first directors of the surviving or new insurer.
(5) The agreement of merger or consolidation.
18 Del. C. 1953, §  4939;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4940. Merger, consolidation of mutual insurers — Filing of articles of merger or consolidation; payment of fees; approval by Secretary of State.

§ 4940. Merger, consolidation of mutual insurers — Filing of articles of merger or consolidation; payment of fees; approval by Secretary of State.
(a) The articles of merger or consolidation, as the case may be, referred to in § 4939 of this title, together with a certificate or certificates from the proper department or departments evidencing payment of all applicable taxes and charges required by law, shall be delivered to the Secretary of State.
(b) The Secretary of State shall examine the articles and the certificate or certificates to determine whether they contain all necessary information and satisfy all requirements as to form. If the Secretary of State finds that the articles and certificates contain all necessary information and satisfy all requirements as to form, the Secretary of State shall endorse his or her approval upon the articles. If the Secretary of State does not so find, he or she shall forthwith give notice thereof to the parties stating in detail the Secretary of State's reasons for so doing and stating how the nonconformance can be remedied. Upon remedying the defects, the party may in the same manner file the same or amended articles, whichever the particular case may require, and the Secretary of State shall endorse his or her approval thereon.
18 Del. C. 1953, §  4940;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4941. Merger, consolidation of mutual insurers — Issuance of certificate of merger or consolidation; effective date.

§ 4941. Merger, consolidation of mutual insurers — Issuance of certificate of merger or consolidation; effective date.
(a) Immediately upon the Secretary of State's approval of the articles of merger or consolidation as provided in § 4940 of this title, the Secretary of State shall file the articles and issue to the surviving or new corporation or its representative a certificate of merger or consolidation, and shall deliver a copy of the articles so approved to the Commissioner.
(b) The merger or consolidation shall be effective upon the issuance of the certificate by the Secretary of State as above provided.
(c) The certificate shall be conclusive evidence of the performance of all conditions precedent to such consolidation or merger and of the continuation or creation of the surviving or new corporation to the extent that the same is governed by the laws of this State.
18 Del. C. 1953, §  4941;  56 Del. Laws, c. 380, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4942. Merger, consolidation of mutual insurers — Effect of merger or consolidation.

§ 4942. Merger, consolidation of mutual insurers — Effect of merger or consolidation.
(a) Upon the merger or consolidation becoming effective, the several corporations, parties to the agreement of merger or consolidation, shall be a single corporation, which in the case of a merger shall be that corporation designated in the agreement as the surviving corporation and, in the case of a consolidation, shall be the new corporation provided for in the agreement of consolidation. The separate existence of all the constituent corporations parties to said agreement except the surviving corporations, in the case of a merger, or the new corporation, in the case of a consolidation, shall thereupon cease.
(b) All the property, real, personal and mixed of each of the corporations, parties to the agreement of merger or consolidation, and all debts or obligations due to any of them shall be taken and be deemed to be transferred to and vested in the surviving or new corporation, as the case may be, without further act or deed.
(c) The surviving or new corporation shall, upon effectuation of the merger or consolidation, thenceforth be responsible for all the liabilities and obligations of each of the corporations so merged or consolidated; but the liabilities of the merging or consolidating corporations or of their directors or officers shall not be affected, and the rights of creditors thereof or of any person dealing with such corporations or any liens upon the property of such corporations shall not be impaired by the merger or consolidation, and any claim existing or action or proceeding pending by or against any of such corporations may be prosecuted to judgment as if the merger or consolidation had not taken place, or the surviving or new corporation may be proceeded against or substituted in its place.
(d) In the case of a merger, the certificate of incorporation of the surviving corporation, if such corporation is a domestic insurer, shall be deemed to be amended to the extent, if any, that changes in its certificate are stated in the articles of merger; and in the case of a consolidation, the statements set forth in the articles of consolidation, in case the new corporation is one formed under the laws of this State, which are required or permitted to be set forth in the certificate of incorporation of such insurer formed under the general corporation laws of this State, shall be deemed to be the certificate of incorporation of the new corporation.
18 Del. C. 1953, §  4942;  56 Del. Laws, c. 380, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4943. Preservation of old charter in merger or consolidation.

§ 4943. Preservation of old charter in merger or consolidation.
(a) In any merger or consolidation of a foreign stock or mutual insurer into or with a domestic insurer under § 4930 of this title, in accordance with this section, the continuing Delaware corporation shall for all purposes be deemed to be a continuation of the corporate existence of the foreign corporation with Delaware as the adoptive state of domicile and with date of corporate origin the same as the original date of incorporation of the foreign insurer in its original domiciliary state or country, subject to the following conditions:
(1) The plan and agreement for merger or consolidation shall provide for such continuation or corporate existence through designation of Delaware as the state of domicile of the foreign corporation by adoption, and shall specify the original date of incorporation of the foreign corporation in its original domiciliary state or country as being the date of incorporation of the Delaware corporation pursuant to this section.
(2) The certificate of incorporation of the Delaware corporation shall provide, or be amended to provide, that the corporation is a continuance of the corporate existence, through adoption of the State as the corporate domicile, of the foreign corporation, and shall specify the original date of incorporation of the foreign corporation in its original domiciliary state or country as being the date of incorporation of the Delaware corporation pursuant to this section.
(b) The continuing Delaware corporation shall have all the rights and obligations of, and be given recognition in all respects as a corporation formed under the laws of this State as of the date of incorporation of the foreign corporation in its original domiciliary state or country. This provision shall not be deemed to impose upon the continuing Delaware corporation any liability or obligation with respect to filings, fees, taxes or otherwise which might have accrued prior to the effective date of the merger or consolidation.
(c) This section shall not be deemed in any manner to preserve, after the effective date of such merger or consolidation, the corporate existence of such foreign corporation as a corporation of its original domiciliary state or country.
60 Del. Laws, c. 176, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4945. Mutual member's share of assets on liquidation.

§ 4945. Mutual member's share of assets on liquidation.
(a) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration shall be distributed to currently existing persons who had been members of the insurer for at least 1 year and who were its members at any time within 36 months next preceding the date such liquidation was authorized or ordered or the date of last termination of the insurer's certificate of authority, whichever date is the earlier, except that if the Commissioner has reason to believe that those in charge of the management of the insurer have caused or encouraged the reduction of the number of members of the insurer in anticipation of liquidation and for the purpose of reducing thereby the number of persons who may be entitled to share in distribution of the insurer's assets, the Commissioner may enlarge the 36-month qualification period as the Commissioner may deem to be reasonable.
(b) The insurer shall make a reasonable classification of its policies so held by such members, and a formula based upon such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the Commissioner.
18 Del. C. 1953, §  4944;  56 Del. Laws, c. 380, §  1;  60 Del. Laws, c. 176, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49. ORGANIZATION AND CORPORATE POWERS; PROCEDURES OF DOMESTIC STOCK AND MUTUAL INSURERS › § 4946. Redomestication; approval as domestic insurer; conversion to foreign insurer; rules and regulations.

§ 4946. Redomestication; approval as domestic insurer; conversion to foreign insurer; rules and regulations.
(a) Any insurer which is organized under the laws of any other state and is admitted to do business in this State for the purpose of writing insurance may become a domestic insurer by complying with all of the requirements of law relative to the organization and licensing of a domestic insurer of the same type and by designating its principal place of business at a place in this State. Said domestic insurer will be entitled to like certificates and licenses to transact business in this State and shall be subject to the authority and jurisdiction of this State.
(b) Any domestic insurer may upon approval of the Commissioner transfer its domicile to any other state in which it is admitted to transact the business of insurance and upon such transfer shall cease to be a domestic insurer and shall be admitted to this State if qualified as a foreign insurer. The Commissioner shall approve any such proposed transfer unless the Commissioner shall determine such transfer is not in the interest of the policyholders of this State.
(c) The certificate of authority, agent's appointments and licenses, rates and other items which the Commissioner of Insurance allows, in his or her discretion, which are in existence at the time any insurer licensed to transact the business of insurance in this State transfers its corporate domicile to this or any other state by merger, consolidation or any other lawful method shall continue in full force and effect upon such transfer while the insurer remains duly qualified to transact the business of insurance in this State. All outstanding policies of any transferring insurer shall remain in full force and effect and need not be endorsed as to the new name of the company or its new location unless so ordered by the Commissioner of Insurance. Every transferring insurer shall file new policy forms with the Commissioner of Insurance on or before the effective date of the transfer but may use existing policy forms with appropriate endorsements if allowed by, and under such conditions as approved by, the Commissioner of Insurance. However, every such transferring insurer shall notify the Commissioner of the details of the proposed transfer and shall file promptly any resulting amendments to corporate documents filed or required to be filed with Commissioner.
(d) The Commissioner of this State may promulgate rules and regulations to carry out the purposes of the section.
66 Del. Laws, c. 77, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4970. Finding; purpose.

§ 4970. Finding; purpose.
(a) It is determined and declared as a matter of legislative finding that policyholders of a mutual insurer have contractual rights to insurance coverage and certain membership rights consisting principally of the right to elect directors of a mutual insurer, the right to vote on certain fundamental transactions undertaken by a mutual insurer, and the right to share in surplus in the event of a solvent liquidation of a mutual insurer. It is determined and declared that the membership rights of policyholders in a domestic mutual company existing as of October 17, 2010, who vote to make such mutual company subject to this chapter, or policyholders of a foreign mutual insurer who vote to redomesticate to Delaware pursuant to § 4974 of this title, are not equivalent to an ownership interest in such mutual insurer and that, in connection with the mutual to stock conversion of a mutual insurer, the grant to policyholders of a first priority right to purchase stock in the converting company or a holding company for such converting company is adequate compensation for the relinquishment of the membership rights of a policyholder. The General Assembly determines that it is desirable to provide for the conversion of a mutual insurer from the mutual form to the stock form in a manner similar to the manner in which mutual savings institutions convert from mutual to stock form under federal law and regulation.
(b) It is further determined and declared that the purpose and policy of this chapter shall be:
(1) To provide for the mutual to stock conversion of a mutual insurer in a manner consistent with the manner in which a mutual savings institution converts from mutual to stock form under federal law and regulation; and
(2) To facilitate the recapitalization of the insurance industry nationally by establishing a proven method of capital formation for insurers that elect to domicile in Delaware.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4971. Short title of chapter.

§ 4971. Short title of chapter.
This chapter shall be known and may be cited as the “Delaware Insurance Company Mutual-to-Stock Conversion Act.”
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4974. Redomestication and conversion.

§ 4974. Redomestication and conversion.
(a) A foreign mutual insurer or foreign mutual holding company that has filed an application for redomestication may file an application for conversion under this chapter promptly after completion of the redomestication or upon such earlier date as the Commissioner may permit, but in no event prior to the approval of the redomestication by the members of the foreign mutual insurer or foreign mutual holding company if such a member vote is required under the laws of the state of domicile of the foreign mutual insurer or foreign mutual holding company. A redomestication application shall contain such information as the Commissioner may require. If the redomestication is approved by the state of domicile of the foreign mutual insurer or foreign mutual holding company and the members of the foreign mutual insurer or foreign mutual holding company, to the extent required, then no redomestication application of a foreign mutual insurer or foreign mutual holding company will be denied solely because the applicant has indicated its intention to avail itself of the provisions of this chapter.
(b) In addition to any requirements imposed by the existing state of domicile with respect to approval of redomestication by its voting members, a foreign mutual insurer that files an application for redomestication under this section also shall provide to its voting members a comparison of the method of mutual to stock conversion in its existing state of domicile and the methods of mutual to stock conversion established by this chapter.
(c) Any order approving the redomestication of a foreign mutual insurer or foreign mutual holding company may contain such terms and conditions as the Commissioner shall require.
(d) Any foreign mutual insurer or foreign mutual holding company that redomesticates under the provisions of this section, within 10 days of the date of redomestication, shall adopt resolutions ratifying any previously adopted plan of conversion and file such resolutions as an amendment to the application for conversion. The Commissioner may deem any failure to file such ratifying resolutions as a withdrawal of the application for conversion.
(e) Nothing contained in this chapter is intended or shall be deemed to supersede or conflict with the requirements of the state of domicile of any foreign mutual insurer or foreign mutual holding company.
(f) Except to the extent specifically provided by this section, a plan of conversion shall be adopted as required by § 4973 of this title and shall be consistent with the requirements of §§ 4975, 4976, and 4977, or of § 4978, of this title.
77 Del. Laws, c. 466, §  2;  78 Del. Laws, c. 313, §  3;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4979. Effective date of plan.

§ 4979. Effective date of plan.
A plan is effective when the Commissioner has approved the plan, the voting members have approved the plan and adopted the certificate of incorporation of the converted stock company, and the certificate of incorporation is filed in the office of the Secretary of State of this State.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4980. Rights of members whose policies are issued after adoption of plan and before effective date.

§ 4980. Rights of members whose policies are issued after adoption of plan and before effective date.
(a) All members whose policies are issued after the proposed plan has been adopted by the governing body and before the effective date of the plan shall be sent a written notice regarding the plan upon issuance of such policy.
(b) A member of a life or health insurance company entitled to be sent the notice described in subsection (a) of this section is entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within 10 days after such member has received the notice. Except as provided in subsection (c) of this section, each member of a property or casualty insurance company entitled to receive the notice provided for in subsection (a) of this section shall be advised of the member's right of cancellation and to a pro rata refund of unearned premiums.
(c) No member of a life or health insurance company, or property or casualty insurance company, who has made or filed a claim under such member's insurance policy shall be entitled to any right to receive any refund under subsection (b) of this section. No person who has exercised the rights provided by subsection (b) of this section shall be entitled to make or file any claim under such person's insurance policy.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4981. Corporate existence.

§ 4981. Corporate existence.
(a) On the effective date of the conversion, the corporate existence of the mutual company continues in the converted stock company. On the effective date of the conversion, all the assets, rights, franchises, and interests of the mutual company or the mutual holding company in and to every species of property, real, personal, and mixed, and any accompanying things in action, are vested in the converted stock company without any deed or transfer and the converted stock company assumes all the obligations and liabilities of the mutual company or the mutual holding company.
(b) Unless otherwise specified in the plan of conversion, the persons who are directors and officers of the mutual company or the mutual holding company on the effective date of the conversion shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are elected pursuant to the certificate of incorporation and bylaws of the converted stock company.
77 Del. Laws, c. 466, §  2;  78 Del. Laws, c. 313, §  6;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4982. Conflict of interest.

§ 4982. Conflict of interest.
(a) A director, officer, agent, or employee of the mutual company shall not receive any fee, commission, or other valuable consideration, other than such person's usual regular salary or compensation, for aiding, promoting, or assisting in a conversion under this chapter, except as provided for in the plan approved by the Commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants, financial advisors, and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant, financial advisor, or actuary is also a director or officer of the mutual company.
(b) For a period of 2 years after the effective date of the conversion, no converted stock company shall implement any nontax-qualified stock benefit plan unless the plan is approved by a majority of votes cast at a duly-convened meeting of shareholders held not less than 6 months after the effective date of the conversion.
(c) All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company. However, if the plan provides for participation by another corporation or stock company in the plan pursuant to § 4975(a)(3)a. of this title, the corporation or stock company may pay for or reimburse all or a portion of the costs and expenses connected with the plan.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4983. Failure to give notice.

§ 4983. Failure to give notice.
If the mutual company complies substantially and in good faith with the notice requirements of this chapter, the mutual company's failure to send a member the required notice does not impair the validity of any action taken under this chapter.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4984. Limitation on actions.

§ 4984. Limitation on actions.
Any action challenging the validity of or arising out of acts taken or proposed to be taken under this chapter shall be commenced no later than the latter of:
(1) Sixty days after the approval of the plan by the Commissioner; or
(2) Thirty days after notice of the meeting of voting members to approve the plan of conversion is first mailed or delivered to voting members or posted on the mutual company's website.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4985. Mutual company insolvent or in hazardous financial condition.

§ 4985. Mutual company insolvent or in hazardous financial condition.
(a) If a mutual company seeking to convert is insolvent or is in hazardous financial condition according to information supplied in its most recent annual or quarterly statement filed with the Department or as determined by a financial examination performed by the Department pursuant to § 318 of this title, the requirements of this chapter, including notice to and policyholder approval of the plan of conversion, may be waived at the discretion of the Commissioner, if requested by the mutual company. If a waiver under this section is ordered by the Commissioner, the mutual company shall specify in its plan of conversion:
(1) The method and basis for the issuance of the converted stock company's shares of its capital stock to an independent party in connection with an investment by the independent party in an amount sufficient to restore the converted stock company to a sound financial condition.
(2) That the conversion shall be accomplished without granting subscription rights or other consideration to the past, present, or future policyholders.
(b) Nothing contained in this section shall alter or limit the authority of the Commissioner under any of the provisions of law, including, but not limited to, Chapter 59 of this title.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4987. Laws applicable to converted stock company.

§ 4987. Laws applicable to converted stock company.
(a) No mutual company shall be permitted to convert under this chapter if, as a direct result of the conversion, any person or any affiliate thereof acquires control of the converted stock company, unless that person and such person's affiliates comply with the provisions of § 5003 of this title. For purposes of this subsection, “control” shall have the meaning given to such term in § 5001 of this title.
(b) Except as otherwise specified in this chapter, a stock company converted under this chapter shall have and may exercise all the rights and privileges and shall be subject to all of the requirements and regulations imposed on stock insurers under this chapter and any other laws of this State relating to the regulation and supervision of insurers, but it shall exercise no rights or privileges which other stock insurers may not exercise.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4988. Commencement of business as a stock insurer.

§ 4988. Commencement of business as a stock insurer.
No mutual company shall have the power to engage in the business of insurance as a stock company until it complies with all provisions of this chapter.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4989. Amendment of policies.

§ 4989. Amendment of policies.
A mutual company, by endorsement or rider approved by the Commissioner and sent to the policyholder, may simultaneously with or at any time after the adoption of a plan of conversion amend any outstanding insurance policy for the purpose of extinguishing the right of the holder of any such policy to share in the surplus of the mutual company. However, this amendment shall be null and void if the plan of conversion is not submitted to the Commissioner or, if submitted, is disapproved by the Commissioner or, if approved by the Commissioner, is not approved by the eligible members on or before the first anniversary of its approval by the Commissioner.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4990. Prohibition on acquisitions of control.

§ 4990. Prohibition on acquisitions of control.
Except as otherwise specifically provided in § 4975 of this title, from the date a plan of conversion is adopted by the governing body of a mutual company until 3 years after the effective date of the plan of conversion, no person shall directly or indirectly offer to acquire, make any announcement to acquire or acquire in any manner, including making a filing with the Department for such acquisition under a statute or regulation of this State, the beneficial ownership of 10% or more of a class of a voting security of the converted stock company or of a person which controls the voting securities of the converted stock company, unless the converted stock company or a person who controls the voting securities of the converted stock company consents to such acquisition and such acquisition is otherwise approved by the Commissioner.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 49A. DELAWARE INSURANCE COMPANY MUTUAL-TO-STOCK CONVERSION ACT › § 4991. Applicability to existing mutual insurers.

§ 4991. Applicability to existing mutual insurers.
(a) Except as provided in subsection (b) of this section, this chapter shall apply to all mutual insurers.
(b) Section 4933 of this title as in effect prior to October 17, 2010, is hereby repealed, except as set forth in the next sentence. Section 4933 of this title as in effect on October 16, 2010, shall apply to any mutual insurer that is a domestic mutual company as of such date that has not submitted a written notice to the Commissioner under subsection (c) of this section.
(c) Any mutual insurer that is a domestic mutual company as of the date immediately prior to the enactment of this chapter that otherwise would be subject to the application of this chapter, § 4933 of this title as in effect on such date may elect to become subject to the application of this chapter instead by submitting to the Commissioner a written notice to that effect.
77 Del. Laws, c. 466, §  2;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 50. INSURANCE HOLDING COMPANY SYSTEM REGISTRATION › § 5002. Subsidiaries of insurers.

§ 5002. Subsidiaries of insurers.
Any domestic insurer, either by itself or in cooperation with 1 or more persons, may organize or acquire 1 or more subsidiaries as otherwise permitted under this title. Such subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer.
68 Del. Laws, c. 325, §  1;  79 Del. Laws, c. 388, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 50. INSURANCE HOLDING COMPANY SYSTEM REGISTRATION › § 5008. Rules and regulations.

§ 5008. Rules and regulations.
The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as shall be necessary to carry out the provisions of this chapter.
68 Del. Laws, c. 325, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 50. INSURANCE HOLDING COMPANY SYSTEM REGISTRATION › § 5011. Receivership.

§ 5011. Receivership.
Whenever it appears to the Commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders or the public, then the Commissioner may proceed as provided in Chapter 59 of this title to take possession of the property of such domestic insurer and to conduct the business thereof.
68 Del. Laws, c. 325, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 50. INSURANCE HOLDING COMPANY SYSTEM REGISTRATION › § 5012. Recovery.

§ 5012. Recovery.
(a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer:
(1) From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions (other than distributions of shares of the same class of stock) paid by the insurer on its capital stock; or
(2) Any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary(s) to a director, officer or employee.
Where the distribution or payment pursuant to paragraph (a)(1) or (2) of this section is made at any time during the 1 year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (b), (c) and (d) of this section.
(b) No such distribution shall be recoverable if the parent or affiliate shows that when paid, such distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that such distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.
(c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time such distributions were paid shall be liable up to the amount of distributions or payments under subsection (a) of this section such person received. Any person who otherwise controlled the insurer at the time such distributions were declared shall be liable up to the amount of distributions the person would have received if they had been paid immediately. If 2 or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.
(d) The maximum amount recoverable under this subsection shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds.
(e) To the extent that any person liable under subsection (c) of this section is insolvent or otherwise fails to pay claims due from it pursuant to such subsection, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, shall be jointly and severally liable for any resulting deficiency in the amount recovered from such parent corporation or holding company or person who otherwise controlled it.
68 Del. Laws, c. 325, §  1;  70 Del. Laws, c. 186, §  1;
2023 Delaware Code › Title 18 - Insurance Code › Chapter 50. INSURANCE HOLDING COMPANY SYSTEM REGISTRATION › § 5013. Revocation, suspension or nonrenewal of insurer's license.

§ 5013. Revocation, suspension or nonrenewal of insurer's license.
Whenever it appears to the Commissioner that any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke or refuse to renew such insurer's license or authority to do business in this State for such period as the Commissioner finds is required for the protection of policyholders or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law.
60 Del. Laws, c. 616, §  8;  68 Del. Laws, c. 325, §  1;  70 Del. Laws, c. 186, §  1;