House Bill 0215c1
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Florida House of Representatives - 2000 CS/HB 215
By the Committee on Insurance and Representative Tullis
1 A bill to be entitled
2 An act relating to stock and mutual insurance
3 companies; amending s. 628.715, F.S.;
4 authorizing a mutual insurance holding company
5 to merge the membership interests of certain
6 mutual insurance companies into the mutual
7 insurance holding company under certain
8 circumstances; authorizing the Department of
9 Insurance to retain certain consultants for
10 merger evaluation purposes; requiring certain
11 companies to pay consultant costs; amending ss.
12 628.231 and 628.723, F.S.; authorizing
13 directors of domestic insurers and mutual
14 insurance holding companies to consider certain
15 factors while taking corporate action in
16 discharging their duties; amending s. 628.729,
17 F.S.; conforming a reference to a qualification
18 period; providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
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22 Section 1. Paragraphs (d) and (e) of subsection (1)
23 and paragraph (b) of subsection (2) of section 628.715,
24 Florida Statutes, are amended, and paragraph (f) is added to
25 subsection (1) of said section, to read:
26 628.715 Merger and acquisitions.--Subject to
27 applicable requirements of this chapter, a mutual insurance
28 holding company may:
29 (1)
30 (d) Acquire a stock insurance company through the
31 merger of such stock insurance subsidiary with a stock
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Florida House of Representatives - 2000 CS/HB 215
200-533-00
1 insurance company or interim stock insurance company
2 subsidiary of the mutual insurance holding company; or
3 (e) Acquire the stock or assets of any other person to
4 the same extent as would be permitted for any not-for-profit
5 corporation under chapter 617 or, if the mutual insurance
6 holding company writes insurance, a mutual insurance company;
7 or.
8 (f) Jointly, with a domestic or foreign mutual
9 insurance company which redomesticates pursuant to s. 628.520,
10 file an application with the department, pursuant to the
11 provisions of this part, to merge the domestic or foreign
12 mutual insurance company policyholder's membership interests
13 into the mutual insurance holding company. The reorganizing
14 mutual insurance company may merge with the mutual insurance
15 holding company's stock subsidiary or continue its corporate
16 existence as a domestic stock insurance company subsidiary.
17 The members of the foreign mutual insurance company may
18 approve in a contemporaneous vote both the redomestication
19 plan and the agreement for merger and reorganization.
20 (2) A reorganization pursuant to this section is
21 subject to the applicable procedures prescribed by the laws of
22 this state applying to corporations formed for profit, except
23 as otherwise provided in this subsection.
24 (b) No such merger shall be effectuated unless in
25 advance thereof, the plan and agreement therefor have been
26 filed with the department and approved by it. The department
27 may retain outside consultants to evaluate each merger. The
28 domestic mutual insurance holding company shall pay reasonable
29 costs associated with retaining such consultants. Such
30 payments shall be made directly to the consultant. The
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2
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2000 CS/HB 215
200-533-00
1 department shall give such approval unless it finds such plan
2 or agreement:
3 1. Is inequitable to the policyholders of any domestic
4 insurer involved in the merger or the members of any domestic
5 mutual insurance holding company involved in the merger; or
6 2. Would substantially reduce the security of and
7 service to be rendered to policyholders of a domestic insurer
8 in this state.
9 Section 2. Subsection (5) is added to section 628.231,
10 Florida Statutes, to read:
11 628.231 Directors; number, election.--
12 (5) In discharging his or her duties, a director may
13 consider such factors as the directors deem relevant,
14 including, but not limited to, the long-term prospects and
15 interests of the corporation and its shareholders, the social,
16 economic, legal, or other effects of any action on the
17 employees, suppliers, or policyholders of the corporation or
18 its subsidiaries, the communities and society in which the
19 corporation or its subsidiaries operate, and the economy of
20 the state and the nation. The director may also consider the
21 short-term and long-term interests of the insurer, including,
22 but not limited to, benefits that may accrue to the insured
23 from the insurer's long-term plans, the possibility that such
24 interests may be best served by the continued independence of
25 the insurer, the resources, intent, and past, present, and
26 potential conduct of any person seeking to acquire control of
27 the insurer, and any other relevant factors.
28 Section 3. Subsection (5) is added to section 628.723,
29 Florida Statutes, to read:
30 628.723 Directors; number; election.--
31
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CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2000 CS/HB 215
200-533-00
1 (5) In discharging his or her duties, a director may
2 consider such factors as the directors deem relevant,
3 including, but not limited to, the long-term prospects and
4 interests of the corporation and its shareholders, the social,
5 economic, legal, or other effects of any action on the
6 employees, suppliers, or policyholders of the corporation or
7 its subsidiaries, the communities and society in which the
8 corporation or its subsidiaries operate, and the economy of
9 the state and the nation. The director may also consider the
10 short-term and long-term interests of the insurer, including,
11 but not limited to, benefits that may accrue to the insured
12 from the insurer's long-term plans, the possibility that such
13 interests may be best served by the continued independence of
14 the insurer, the resources, intent, and past, present, and
15 potential conduct of any person seeking to acquire control of
16 the insurer, and any other relevant factors.
17 Section 4. Subsection (1) of section 628.729, Florida
18 Statutes, is amended to read:
19 628.729 Member's share of assets on voluntary
20 dissolution.--
21 (1) Upon any voluntary dissolution of a domestic
22 mutual insurance holding company, its assets remaining after
23 discharge of its indebtedness, if any, and expenses of
24 administration, shall be distributed to existing persons who
25 were its members at any time within the 3-year period
26 preceding the date such liquidation was authorized or ordered,
27 or date of last termination of the insurer's certificate of
28 authority, whichever date is earlier; except, if the
29 department has reason to believe that those in charge of the
30 management of the mutual insurance holding company have caused
31 or encouraged the reduction of the number of members of the
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Florida House of Representatives - 2000 CS/HB 215
200-533-00
1 insurer in anticipation of liquidation and for the purpose of
2 reducing thereby the number of persons who may be entitled to
3 share in distribution of the insurer's assets, the department
4 may enlarge the 3-year 5-year qualification period by such
5 additional time as the department may deem to be reasonable.
6 Section 5. This act shall take effect upon becoming a
7 law.
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