2023 New Jersey Revised Statutes › Title 17 - Corporations and Institutions for Finance and Insurance › Section 17:48E-46.4 - Health service corporation to reorganize into mutual holding company system

17:48E-46.4. Health service corporation to reorganize into mutual holding company system
4. a. A health service corporation organized pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.) may reorganize to create a mutual holding company system pursuant to a plan of reorganization at the same time it applies to transition to a mutual insurer pursuant to P.L.1995, c.196 (C.17:48E-45 et seq.). Thereafter, the succeeding mutual holding company system shall be operated in a manner consistent with sections 1 and 3 of P.L.2020, c.145 (C.17:48E-46.1 and C.17:48E-46.3).
b. The mutual holding company system shall consist of a mutual holding company and one or more controlled nonprofit or for-profit subsidiaries, including the reorganized insurer, and shall be operated for the benefit of its members. The mission of a mutual holding company shall be as specified in subsection a. of section 3 of P.L.2020, c.145 (C.17:48E-46.3).
c. The mutual holding company and each of its non-insurance subsidiaries, other than the reorganized insurer and any insurance company subsidiaries, shall not be:
(1) an insurer and therefore shall not be subject to any of the provisions of N.J.S.17B:18-1 et seq. applicable to stock or mutual insurers, or to any laws concerning the writing of insurance, including rules and regulations adopted thereunder, including with respect to governance, stock or other voting or equity interest, the writing of insurance, any investment limitations directly applicable to risk-bearing entities engaged in the writing of insurance such as those pursuant to N.J.S.17B:20-1 et seq., or any capital or surplus requirements;
(2) authorized to transact the business of insurance; or
(3) qualified as an insurer.
The writing of insurance shall be permitted only through the reorganized insurer and other insurance company subsidiaries or investments of the mutual holding company. Nothing herein shall alter the oversight of the commissioner with respect to the mutual holding company and its non-insurance subsidiaries provided for pursuant to applicable laws and rules of this State relating to insurance holding company systems.
d. A mutual holding company shall be a nonprofit entity incorporated under, and shall conduct its business pursuant to, the provisions of Title 15A of the New Jersey Statutes, except that in situations in which the provisions of that title are inconsistent with the provisions of P.L.2020, c.145 (C.17:48E-46.1 et al.), the provisions of P.L.2020, c.145 (C.17:48E-46.1 et al.) shall govern.
e. At the effective time, members shall receive membership interests of the mutual holding company, and thereafter 100 percent of the membership interests of the mutual holding company shall continue to be held by members, in each case, in the manner set forth in the articles of incorporation and bylaws of the mutual holding company.
f. The shares of the capital stock of the reorganized insurer shall be:
(1) issued to the mutual holding company or one or more intermediate holding companies that are wholly-owned by the mutual holding company; and
(2) at all times owned by the mutual holding company or one or more intermediate holding companies that are wholly-owned by the mutual holding company.
g. The subsidiaries of a mutual holding company system may be formed by any of the following means:
(1) the formation of one or more subsidiaries;
(2) amendment or restatement of the articles of incorporation and bylaws of one or more companies;
(3) transfer of assets and liabilities among two or more companies;
(4) issuance, acquisition or transfer of capital stock of one or more companies; or
(5) merger or consolidation of two or more companies.
h. The mutual holding company shall ensure that any ownership interest in a subsidiary shall be held by the mutual holding company, and that any profits generated by that interest are returned to the mutual holding company.
L.2020, c.145, s.4.