2023 New York Laws › ISC - Insurance › Article 80 - Mutual Holding Company › 8017 - Requirements Applicable to a Mutual Holding Company.

§  8017.  Requirements applicable to a mutual holding company. (a) The
following provisions of this article are applicable to a mutual  holding
company:
(1)  the  following provisions of article twelve of this chapter shall
apply to a mutual holding company as though it were  a  domestic  mutual
insurer:  section  one  thousand  two hundred one of this chapter to the
extent provided in subsection (c)  of  this  section  and  sections  one
thousand two hundred two, one thousand two hundred six, one thousand two
hundred  eight,  one thousand two hundred nine, one thousand two hundred
twelve and one thousand two hundred fifteen  through  one  thousand  two
hundred nineteen of this chapter;
(2) the provisions of the business corporation law that are applicable
to  a  domestic  mutual  life  insurer  shall  apply to a mutual holding
company as though it were a domestic mutual insurer; and
(3) the provisions of section four thousand two hundred  ten  of  this
chapter applicable to a domestic mutual life insurer shall be applied to
a mutual holding company as though its members were voting policyholders
of a mutual life insurer.
(b)  A mutual holding company shall not dissolve, liquidate or wind up
and dissolve except through proceedings  under  section  eight  thousand
nineteen  of  this article, article seventy-four of this chapter for the
liquidation  or  dissolution  of  the  reorganized  insurer  or  as  the
superintendent  may  otherwise approve. In the event any proceedings are
instituted under article seventy-four of this chapter for  the  complete
liquidation of reorganized insurer pursuant to this article:
(1)  the  mutual holding company formed as part of such reorganization
shall automatically become a party to such proceedings;
(2) all of the mutual holding company's assets (including its holdings
of shares in the reorganized insurer or any stock holding company) shall
be deemed assets of the estate of the domestic stock life insurer to the
extent necessary to satisfy claims of persons who have class one,  class
two,  class  three  or class four claims under subsection (a) of section
seven thousand four hundred thirty-five of this chapter with respect  to
such domestic stock life insurer; and
(3)  members  of  the  mutual  holding company shall be deemed to hold
class eight claims with respect to  the  mutual  holding  company  under
subsection  (a)  of  section  seven thousand four hundred thirty-five of
this chapter.
(c) The charter of the mutual holding company shall be filed with  the
superintendent and shall contain the matters required to be contained in
the  charter  of  a domestic mutual life insurer by section one thousand
two hundred one of this chapter, except that  the  name  of  the  mutual
holding  company  shall  contain the word "mutual" and shall not contain
the word "insurance," "assurance" or "annuity" and the company's  powers
shall not include doing an insurance business. The charter shall contain
provisions stating that:
(1) it is a mutual holding company organized under this article;
(2)  a purpose shall be to hold, directly or through one or more stock
holding companies, not less than fifty-one percent of the  voting  stock
of a reorganized insurer;
(3) it shall not be authorized to issue voting stock;
(4) it shall not be authorized to conduct any business other than that
of  a holding company, except for the acquisition, ownership, management
and disposition of  its  assets  and  all  actions  reasonably  incident
thereto; and
(5)  it shall have members having the rights specified in this section
and section eight thousand ten of this article and in  its  charter  and
by-laws.  The  charter  shall  also contain provisions setting forth any

rights of members of the mutual holding company in the  surplus  of  the
mutual holding company.
(d) At least two-thirds of the directors of the mutual holding company
and of any stock holding company, all of the members of the compensation
committee of the board of directors of the mutual holding company and of
any  stock  holding  company,  at least two-thirds of the members of any
committee  responsible  for  making  decisions  affecting  the   capital
structure  or  mergers and acquisitions, and a majority of the directors
on each other committee of the board of directors of the mutual  holding
company  and  any  stock holding company shall be outside directors. The
aggregate percentage of voting securities  of  the  reorganized  insurer
directly or indirectly owned, controlled or held with the power to vote,
either  personally  or by persons (other than the mutual holding company
and any stock holding company) of which they are directors, officers  or
employees,  by outside directors, shall not exceed three percent or such
lesser percentage as may be determined by the superintendent in  his  or
her  approval  of  the  mutual  holding company's plan of reorganization
pursuant to this article. The by-laws of the mutual holding company  and
any  stock holding company shall provide that the affirmative vote of at
least two-thirds of the board of directors  of  such  company  shall  be
required  for  any  action by such company to adopt a plan of conversion
pursuant to section eight thousand nineteen of this article, enter  into
a  merger,  conduct  a  public offering or authorize the issuance of any
voting  stock  or  security  convertible  into  voting  stock   of   the
reorganized  insurer  or  the  stock holding company to any person other
than the mutual holding company or the stock holding company.
(e) The superintendent may, by regulation, require  a  mutual  holding
company  to  file annual statements with the superintendent in such form
as the superintendent shall prescribe.
(f) With the written approval of the superintendent,  and  subject  to
the  conditions  that  the  superintendent  may impose, a mutual holding
company or stock company may:
(1) merge or consolidate with, or acquire  the  assets  of,  a  mutual
holding  company  organized  pursuant to this article or pursuant to the
laws of another state;
(2) either alone or together with  one  or  more  of  the  reorganized
insurer, any stock holding companies or any subsidiaries of any of them,
merge  or  consolidate  with  or  acquire  the  assets  of a mutual life
insurer;
(3) merge or consolidate with any other person.
(g) A mutual holding company may also acquire  the  capital  stock  or
assets of other persons.
(h)  A  member  of  a  mutual  holding  company  is  not, as a member,
personally liable for the acts, debts, liabilities or obligations of the
company.  No assessment of any kind may be imposed upon the members of a
mutual holding company by the board of directors, members  or  creditors
of the mutual holding company or because of any liability of any company
owned or controlled, in whole or in part, directly or indirectly, by the
mutual  holding  company or because of any act, debt or liability of the
mutual holding company.
(i) A membership interest  in  a  mutual  holding  company  shall  not
constitute a security under the laws of this state.
(j)  The  superintendent  shall  retain  jurisdiction  over any mutual
holding company organized pursuant to this article.
(k) Directors of the mutual holding company  shall  be  elected  by  a
majority  vote  of all members who vote in such election in person or by
proxy. If the reorganized insurer takes any action (other than  election
of  its  directors)  that  would  require a vote of policyholders if the

reorganized insurer were a mutual life insurer, then such  action  shall
require a vote of members of the mutual holding company.