To amend chapters 376 and 379, RSMo, relating to the reorganization of certain mutual insurance companies by adding thereto thirteen new sections relating to the same subject.

Be it enacted by the General Assembly of the State of Missouri, as follows:

Section A. Chapters 376 and 379, RSMo, are amended by adding thereto thirteen new sections, to be known as sections 376.1300, 376.1305, 376.1307, 376.1309, 376.1312, 376.1315, 376.1318, 376.1322, 379.980, 379.982, 379.985, 379.987 and 379.988, to read as follows:

376.1300. A domestic mutual life insurance company organized and operating pursuant to this chapter may reorganize by forming a mutual life insurance holding company as described in section 376.1309 or by merging its policyholders' memberships into such a mutual life insurance holding company. The reorganized life insurance company shall continue its corporate existence, either at the time of the reorganization or at some later time, as a stock life insurance company or as a mutual life insurance company. The authority granted such companies pursuant to sections 376.1300 to 376.1322 shall be in addition to any powers granted pursuant to chapter 382, RSMo.

376.1305. 1. A mutual life insurance company proposing to reorganize pursuant to sections 376.1300 to 376.1322 shall form a mutual life insurance holding company, which may hereafter be referred to as a mutual holding company, and shall file an application with the director of the department of insurance which shall contain such insurer's plan of reorganization. The director shall review the application, and may retain such consultants as may be reasonably necessary, at the expense of the applicant; conduct an adequate review to assure that policyholders' interests are protected and may conduct a public hearing. The director shall approve the formation of the mutual holding company and the plan of reorganization if the director finds that the plan is fair and equitable to the policyholders. The director may condition such approval on adoption of modifications to the plan if the director finds such modifications are necessary for the protection of the policyholders' interests.

2. No mutual life insurance company may reorganize pursuant to Sections 376.1300 to 376.1322 unless the reorganization plan is approved by a majority of the policyholders voting in person or by proxy at a special meeting called for that purpose. Any group of at least 100 policyholders having a right to vote at such special meeting shall be entitled at their own expense to have the Secretary of the Company mail informational materials to all policyholders provided that such materials and the cost thereof are presented to the Secretary at least 45 days before the special meeting.

376.1307. All of the shares, if any are issued, of the capital stock of the reorganized life insurance company shall be issued to the mutual holding company, which shall at all times own a majority of the voting shares of the capital stock of the reorganized life insurance company; except that, either at the time of the reorganization, or at some later time with the approval of the director, the mutual holding company may create a stock holding company pursuant to chapter 351, RSMo, for the purpose of owning all of the stock of the reorganized life insurance company, so long as the mutual holding company at all times owns a majority of the voting shares of the capital stock of the stock holding company. Any subsidiaries of the reorganized life insurance company may remain as subsidiaries of such company or become subsidiaries of the mutual or stock holding company provided that, if such subsidiaries shall become subsidiaries of a stock holding company then the reorganized life insurance company shall be reimbursed the fair market value of its holdings in such subsidiaries in the event shares of the stock holding company are or have been issued to other than the mutual holding company.

376.1309. 1. The membership interest of the policyholders of a reorganized life insurance company shall become membership interests in the mutual holding company. Policyholders of the reorganized life insurance company shall be members of the mutual holding company in accordance with the articles of incorporation and bylaws of the mutual holding company and the applicable provisions of this chapter relating to mutual life insurance companies.

2. No member of a mutual holding company may transfer membership in the holding company or any right arising from such membership.

3. A member of a mutual holding company is not, as a member, personally liable for the acts, debts, liabilities or obligations of the company.

4. No assessments of any kind may be imposed upon the members of a mutual holding company by the directors or members, or because of any liability of any company owned or controlled by the mutual holding company or because of any act, debt or liability of the mutual holding company itself.

5. A membership interest in a domestic mutual holding company shall not constitute a security under the laws of this state.

376.1312. Sections 382.040, 382.060, and 382.095, RSMo, shall not apply to a reorganization or merger pursuant to the provisions of sections 376.1300 to 376.1322.

376.1315. Notwithstanding any provision of this chapter to the contrary, a mutual holding company organized pursuant to section 376.1300 shall be incorporated pursuant to this chapter. The articles of incorporation and any amendments to such articles of the mutual holding company shall be subject to approval of the director of the department of insurance and the attorney general in the same manner as those of a mutual life insurance company.

376.1318. A mutual holding company shall have the same powers granted to domestic insurance companies pursuant to chapter 382, RSMo, relating to insurance holding company systems, and shall be subject to the requirements and provisions of such chapter and shall have all the powers granted to corporations organized pursuant to chapter 351, RSMo. Neither the mutual holding company nor any stock holding company created pursuant to sections 376.1300 to 376.1322 shall be an insurer or shall have the authority to engage in the business of insurance. A mutual holding company may enter into an affiliation agreement or a merger agreement either at the time of reorganization, or at some later time with the approval of the director, with any mutual life insurance company authorized to do business in this state. Any such merger agreement may authorize participating policyholders of the mutual life insurance company to become members of the mutual holding company. Any such affiliation agreement or merger agreement is subject to the insurance laws of this state relating to such transactions entered into by a domestic mutual life insurance company.

376.1322. 1. A mutual holding company is subject to the supervision of the director of the department of insurance in the same manner as an insurer subject to the provisions of this chapter and shall automatically be a party to any proceeding pursuant to the Missouri insurers supervision, rehabilitation and liquidation act, sections 375.1150 to 375.1246, RSMo, involving a life insurance company which, as a result of a reorganization pursuant to section 376.1300, is a subsidiary of the mutual holding company or a stock holding company created pursuant to section 376.1307. In any proceeding pursuant to sections 375.1150 to 375.1246, RSMo, involving the reorganized life insurance company, the assets of the mutual holding company are deemed to be assets of the estate of the reorganized life insurance company for purposes of satisfying the claims of the reorganized life insurance company's policyholders. A mutual holding company shall not dissolve or liquidate without the approval of the director of the department of insurance or as ordered by the court pursuant to sections 375.1150 to 375.1246, RSMo.

2. Sections 375.201 to 375.226, RSMo, shall apply to a demutualization of a mutual holding company the same as if such holding company was a mutual life insurance company. This section does not apply to those companies organized under chapters 354 or 355 and does apply only to for profit mutual life insurance companies.

379.980. A domestic mutual insurance company organized and operating under this chapter may reorganize by forming a mutual insurance holding company as described in section 379.985, or by merging its policy holders' membership into such a mutual insurance holding company. The reorganized insurance company shall continue its corporate existence, either at the time of the reorganization or at some later time as a stock insurance company, or as a mutual insurance company. This authority is in addition to powers granted pursuant to chapter 382, RSMo.

379.982. 1. A mutual insurance company proposing to reorganize pursuant to sections 379.980 to 379.988 shall form a mutual insurance holding company, hereafter referred to in sections 379.980 to 379.988 as a "mutual holding company", and shall file an application with the director which shall contain such insurer's plan of reorganization. The director shall review the application, and may retain such consultants as may be reasonably necessary, at the expense of the applicant; conduct an adequate review to assure that policyholders' interests are protected, and may conduct a public hearing. The director shall approve formation of the mutual holding company and the plan of reorganization if the director finds that the plan is fair and equitable to the policyholders. The director may condition such approval on the adoption of such modifications to the plan as the director finds necessary for the protection of the policyholders' interests.

2. No mutual insurance company may reorganize pursuant to sections 379.980 to 379.988 unless the reorganization plan is approved by a majority of the policyholders voting in person or by proxy at a special meeting called for that purpose. Any group of at least 100 policyholders having a right to vote at such special meeting shall be entitled at their own expense to have the Secretary of the Company mail informational materials to all policyholders provided that such materials and the cost thereof are presented to the Secretary at least 45 days before the special meeting.

3. All of the shares of the capital stock of the reorganized insurance company, if any, shall be issued to the mutual holding company, which shall at all times own a majority of the voting shares of the capital stock of the reorganized insurance company, except that either at the time of the reorganization or, at some later time with the approval of the director, the mutual holding company may create a stock holding company pursuant to chapter 351, RSMo, for the purpose of owning all of the stock of the reorganized insurance company, so long as the mutual holding company shall at all times own a majority of the voting shares of the capital stock of the stock holding company. Any subsidiaries of the reorganized insurance company may remain as subsidiaries of such company or become subsidiaries of the mutual or stock holding company provided that, if such subsidiaries shall be subsidiaries of a stock holding company then the reorganized insurance company shall be reimbursed the fair market value of its holdings in such subsidiaries in the event shares of the stock holding company are or have been issued to other than the mutual holding company.

379.985. 1. The membership interests of the policyholders of a reorganized insurance company shall become membership interests in the mutual holding company. Policyholders of the reorganized insurance company shall be members of the mutual holding company in accordance with the articles of incorporation and bylaws of the mutual holding company and the applicable provisions of this chapter relating to mutual insurance companies.

2. No member of a mutual holding company may transfer membership or any right arising therefrom.

3. A member of a mutual holding company is not, as such, personally liable for the acts, debts, liabilities or obligations of the company.

4. No assessments of any kind may be imposed upon the members of a mutual holding company by the directors, or members, or because of any liability of any company owned or controlled by the mutual holding company, or because of any act, debt or liability of the mutual holding company itself.

5. A membership interest in a domestic mutual holding company shall not constitute a security under the laws of this state.

379.987. 1. Sections 382.040, 382.060 and 382.095, RSMo, are not applicable to a reorganization or merger pursuant to sections 379.980 to 379.988.

2. A mutual holding company organized pursuant to sections 379.980 to 379.988 shall be incorporated pursuant to this chapter. The articles of incorporation and any amendments to such articles of the mutual holding company shall be subject to approval of the director and the attorney general in the same manner as those of a mutual insurance company.

3. A mutual holding company shall have the same powers granted to domestic insurance companies pursuant to chapter 382, RSMo, relating to insurance holding company systems and shall be subject to its requirements and provisions and shall have all the powers granted to corporations organized pursuant to chapter 351, RSMo. Neither the mutual holding company or any stock holding company created pursuant to sections 379.980 to 379.988 shall be an insurer or may engage in the business of insurance. A mutual holding company may enter into an affiliation agreement or a merger agreement either at the time of the reorganization, or at some later time with the approval of the director, with any mutual insurance company authorized to do business in this state. Any such merger agreement may authorize participating policyholders of the mutual insurance company to become members of the mutual holding company. Any such affiliation agreement or merger agreement is subject to the insurance laws of this state relating to such transactions entered into by a domestic mutual insurance company.

379.988. 1. A mutual holding company is subject to supervision of the director in the same manner as an insurer subject to the provisions of this chapter and shall automatically be a party to any proceeding pursuant to sections 375.1150 to 375.1246, RSMo, involving an insurance company which, as a result of a reorganization pursuant to sections 375.1150 to 375.1246, RSMo, is a subsidiary of the mutual holding company or a stock holding company created pursuant to section 379.982. In a proceeding pursuant to sections 375.1150 to 375.1246, RSMo, involving the reorganized insurance company, the assets of the mutual holding company are deemed to be assets of the estate of the reorganized insurance company for purposes of satisfying the claims of the reorganized company's policyholders. A mutual holding company shall not dissolve or liquidate without the approval of the director or as ordered by the court pursuant to sections 375.1150 to 375.1246, RSMo.

2. Sections 375.201, 375.206, 375.216, 375.221 and 375.226, RSMo, are applicable to a demutualization of a mutual holding company as if it were a mutual insurance company. This section does not apply to those companies organized under chapters 354 or 355 and does apply only to for profit mutual property and casualty insurance companies.