2023 New York Laws › ISC - Insurance › Article 80 - Mutual Holding Company › 8018 - Other Requirements Applicable to a Stock Holding Company and a Mutual Holding Company.

§ 8018. Other requirements applicable to a stock holding company and a
mutual  holding  company.  (a)  From and after the effective date of the
plan, the mutual holding company shall hold, directly or through one  or
more  stock  holding companies, at least fifty-one percent of the issued
and outstanding voting stock of the reorganized insurer. The reorganized
insurer and any stock holding company may issue to  the  mutual  holding
company  and  to  other  persons  securities,  including  voting  stock,
non-voting stock and securities convertible into  voting  or  non-voting
stock, provided that, such issuance and the terms of such issuance shall
have  received  the  prior  approval  of  the  superintendent, who shall
consider the interests of the mutual holding company and its members and
who may require that, at the time of  such  issuance,  consideration  be
distributed   to   members.   For  purposes  of  the  fifty-one  percent
limitation, any issued and outstanding  securities  of  the  reorganized
insurer  or  any  stock holding company that are convertible into voting
stock shall be considered issued and outstanding voting stock.
(b) A mutual holding company and any stock holding company shall  each
be  deemed  to  be a "holding company" of the reorganized insurer within
the meaning of article fifteen of this chapter, and  all  provisions  of
article  fifteen  of  this chapter shall apply to transactions occurring
between the mutual holding company, the stock holding  company  and  the
reorganized  insurer.  Approval  of  the  plan  of reorganization by the
superintendent pursuant to this article shall constitute approval of the
acquisition of control by a mutual holding company and any stock holding
company under section one thousand five hundred six of this chapter, the
registration by the reorganized insurer as a  controlled  insurer  under
section  one  thousand  five hundred three of this chapter and notice of
the acquisition of shares of the reorganized insurer under section  four
thousand two hundred three of this chapter.
(c)  Outside  directors of the mutual holding company, a stock holding
company or the reorganized insurer shall not own  beneficially,  in  the
aggregate,  more  than  three  percent  of the voting stock of the stock
holding company or the reorganized insurer.
(d) In no event shall any person, directly  or  indirectly,  offer  to
acquire  or  acquire  in  any  manner  beneficial ownership of more than
fifteen percent of any class of voting  securities  of  the  reorganized
insurer,  any  stock holding company or any other institution which owns
directly or indirectly a majority or all of the voting securities of the
reorganized insurer without the prior approval of the superintendent.
(e) Any issuance of voting stock or securities convertible into voting
stock or options for the purchase of voting  stock  of  the  reorganized
insurer  or  the  stock  holding  company  prior  to  an  initial public
offering, private equity placement, or the issuance of public or private
voting  stock  or  securities  convertible  into  voting  stock  of  the
reorganized  insurer  or  stock  holding  company  or  any other type of
capital raised shall be subject to the approval of the superintendent as
to  the  proposed  valuation  of   such   stock   or   securities,   the
superintendent  may  impose  conditions  upon  such  approval,  and  all
expenses of the superintendent's review,  including  without  limitation
those of outside consultants in reviewing such proposed valuation, shall
be borne by the issuing company.
(f)  In  the  event  of  an  initial  public offering, a stock holding
company or reorganized insurer may not repurchase capital  stock  within
one year following the date of such initial public offering, except that
repurchases of no greater than five percent of the outstanding stock may
be  repurchased  during this one year period without the approval of the
superintendent.
(g) In the event of any violation of this section, or  of  any  action
which, if consummated, might constitute such a violation:
(l)  all  voting  stock  of the reorganized insurer, any stock holding
company, or the reorganized mutual  holding  company,  acquired  by  any
person  in excess of the maximum amount permitted to be acquired by such
person pursuant to this subsection shall  be  deemed  to  be  non-voting
stock; and
(2) in addition to any other enforcement powers of the superintendent,
under  this  chapter,  such  violation  or  action  may  be  enforced or
enjoined, as the case may be, by  appropriate  proceeding  commenced  on
behalf  of  the  reorganized  insurer,  any stock holding company or, if
applicable, a reorganized mutual holding  company,  by  the  reorganized
insurer,  the  stock  holding company, the mutual holding company or the
superintendent, the attorney general, any member of the  mutual  holding
company  or, if applicable, a reorganized mutual holding company, or any
stockholder of the reorganized insurer, any stock holding company or the
reorganized mutual holding company in the supreme court in the  judicial
district  in which the reorganized insurer has its home office or in any
other court having jurisdiction, and such court  may  issue  any  order,
injunctive or otherwise, it finds necessary to cure such violation or to
prevent such action.