Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 020 - INSURANCE DIVISION › Chapter 041 - REGULATION 97-5 - MUTUAL INSURANCE HOLDING COMPANIES › Section 21 020 041 - REGULATION 97-5 - MUTUAL INSURANCE HOLDING COMPANIES

Current through June,
				2024
Section 1 Purpose
This regulation is intended to implement the provisions of
				  Title 8, Chapter 101, subchapter 3A.
Section 2 Authority
This regulation is issued pursuant to the authority vested in
				  the Commissioner of Banking, Insurance, Securities and Health Care
				  Administration by Title 8, Section 75 and Chapter 101, subchapter 3A and
				  subchapter 13.
Section 3
				Definitions
(1) "Adoption date" means the
				first date any board of directors of a domestic or foreign mutual insurance
				company or a mutual insurance holding company initially adopts a plan of
				reorganization.
(2) "Affiliate" of,
				or person "affiliated" with, a specific person, means a person that directly or
				indirectly through one or more intermediaries, controls, or is controlled by,
				or is under common control with, the person specified.
(3) "Commissioner" means the Commissioner of
				Banking, Insurance, Securities and Health Care Administration.
(4) "Control" means the possession, direct or
				indirect, of the power to direct or cause the direction of management and
				policies of a person, whether through the ownership of voting securities, by
				contract other than a commercial contract for goods or nonmanagement services,
				or otherwise, unless the power is the result of an official position with or
				corporate office held by the person. Control shall be presumed to exist if any
				person, directly or indirectly, owns, controls, holds with the power to vote,
				or holds proxies representing, ten percent or more of the voting securities of
				any other person.
(5) "Division"
				means the Vermont Insurance Division.
(6) "Domestic mutual insurance company" means
				an insurance company organized on a mutual plan and incorporated under the laws
				of Vermont.
(7) "Effective date"
				means the date upon which the reorganization of a domestic or foreign mutual
				insurance company or mutual insurance holding company shall be effective
				subject to the rights of dissenting members or policyholders in accordance with
				this regulation.
(8)
(A) "Independent Director" means:
(i) A person who is not and has never been an
				officer or employee of a mutual insurance holding company or a member of the
				immediate family of such person;
(ii) A person who is not currently and has
				not been within the past five years an officer, employee or 5% shareholder of
				an affiliate of a reorganized insurer created by a plan of reorganization, a
				reorganized insurer or a member of the immediate family of such person;
				and
(B) A person who is
				or becomes, on or after the date of an initial stock offering, a director of an
				entity created under the plan of reorganization is not an independent director
				of any other entity created under the plan of reorganization.
(9) "Interested person" of another
				person means:
1. Any affiliated person of
				such company;
2. Any member of the
				immediate family of any natural person who is an affiliated person of such
				company. Immediate family includes parents, spouse of a parent, child, spouse
				of a child, spouse, or sibling, including step and adoptive
				relationships;
3. Any person or
				partner or employee of any person who at any time since the beginning of the
				last two completed fiscal years of such company has acted as legal counsel for
				such company; or
4. Any natural
				person whom the Commissioner by order shall have determined to be an interested
				person by reason of having had, at any time since the beginning of the last two
				completed fiscal years of such company, a business or professional relationship
				with such company or with the principal executive officer of such
				company.
(10) "Member"
				means a person who, by the records of the domestic or foreign mutual insurance
				company, is deemed to be a policyholder of a policy or annuity contract of such
				insurer. On or after the effective date of a plan of reorganization that
				creates a mutual insurance holding company, the term member means a member of
				the mutual insurance holding company as provided for by
				8 V.S.A. §
											3441(b).
(11) "Membership interests" means, with
				reference to an entity that is a domestic or foreign mutual insurance company
				or mutual insurance holding company, the rights of members arising under the
				articles of association, bylaws or charter of such entity or under this
				regulation or otherwise by law.
(12) "Mutual insurance holding company" means
				a holding company organized on a mutual plan and incorporated under the laws of
				Vermont, resulting from the reorganization of a domestic mutual insurance
				company pursuant to
				8 V.S.A. §
											3441 with at least one or more stock
				insurance holding company subsidiaries or stock insurance company
				subsidiaries.
(13) "Person" means
				an individual, partnership, firm, association, corporation, joint-stock
				company, limited liability company, trust, government or governmental agency,
				state or political subdivision thereof, public or private corporation, board,
				association, estate, trustee or fiduciary, or any similar entity.
(14) "Plan of reorganization" means a plan to
				reorganize a domestic mutual insurance company by forming a mutual insurance
				holding company, to merge a domestic or foreign mutual insurance company into a
				mutual insurance holding company pursuant to
				8
				V.S.A. §
											3442 or to form a stock
				insurance holding company.
(15)
				"Policyholder" means the owner of an insurance policy or contract other than a
				reinsurance contract.
(16)
				"Reorganized insurer" or "reorganizing insurer" means the stock insurance
				company into which a domestic or foreign mutual insurance company has been or
				will be reorganized in accordance with Title 8, Chapter 101, subchapter 3A and
				this regulation. A reorganized insurer shall be deemed to have been organized
				as of the original date of organization of the predecessor mutual insurance
				company.
(17) "Stock insurance
				holding company" means a corporation at least a majority of the voting
				securities of which is owned, directly or through another stock insurance
				holding company, by a mutual insurance holding company and which holds,
				directly or indirectly, all the voting securities of the reorganized
				insurer.
(18) "Stock offering"
				means any proposed sale, exchange, transfer or other change of ownership of
				stock or of securities convertible into or exchangeable or exercisable for
				stock. The term shall not mean an offering of preferred stock which is not
				convertible or exchangeable into common stock and which has no ordinary voting
				rights.
(19) "Subsidiary" of a
				specified person means an affiliate controlled by such person directly, or
				indirectly through one or more subsidiaries.
(20) "Voting security" means a security
				which, in law or by contract, gives the holder thereof the right to vote in the
				election of directors and on any other matters submitted to a vote of
				shareholders. Voting security includes any security convertible into or
				evidencing a right to acquire a voting security.