HB 0235 2003
1	A bill to be entitled
2	An act relating to mutual insurance holding companies;
3	amending s. 628.703, F.S.; providing a definition;
4	amending s. 628.709, F.S.; revising membership criteria of
5	mutual insurance holding companies; amending ss. 628.729,
6	628.730, and 628.733, F.S.; specifying basis of
7	distributive shares and corporate equity of members under
8	certain circumstances; providing an effective date.
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10	Be It Enacted by the Legislature of the State of Florida:
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12	Section 1. Subsection (4) is added to section 628.703,
13	Florida Statutes, to read:
14	628.703 Definitions.--For purposes of this part:
15	(4) “Paid premiums” means all premiums paid for insurance
16	by a member of a mutual insurance holding company to a
17	subsidiary insurance company.
18	Section 2. Subsection (2) of section 628.709, Florida
19	Statutes, is amended to read:
20	628.709 Formation of a mutual insurance holding company.--
21	(2) All of the initial shares of the capital stock of the
22	insurance company which reorganized as a subsidiary insurance
23	company shall be issued either to the mutual insurance holding
24	company, or to an intermediate holding company which is wholly
25	owned by the mutual insurance holding company. This restriction
26	does not preclude the subsequent issuance of additional shares
27	of stock by the subsidiary insurance company so long as the
28	mutual insurance holding company at all times owns directly or
29	through one or more intermediate holding companies, a majority
30	of the voting shares of the capital stock of the subsidiary
31	insurance company. The membership interests of the policyholders
32	of the subsidiary insurance company shall become membership
33	interests in the mutual insurance holding company. Policyholders
34	of the subsidiary insurance company which was formerly the
35	mutual insurer shall be members of the mutual insurance holding
36	company in accordance with the articles of incorporation and
37	bylaws of the mutual insurance holding company.At the time of
38	formation,policyholders of any other subsidiary insurance
39	company of the mutual insurance holding company shall not be
40	members of the mutual insurance holding company unless they are
41	policyholders of a subsidiary which was a mutual insurer which
42	merged with the holding company pursuant to s. 628.715.
43	Subsequent to formation, membership shall be governed by s.
44	628.727.
45	Section 3. Subsection (2) of section 628.729, Florida
46	Statutes, is amended to read:
47	628.729 Member's share of assets on voluntary
48	dissolution.--
49	(1) Upon any voluntary dissolution of a domestic mutual
50	insurance holding company, its assets remaining after discharge
51	of its indebtedness, if any, and expenses of administration,
52	shall be distributed to existing persons who were its members at
53	any time within the 3-year period preceding the date such
54	liquidation was authorized or ordered, or date of last
55	termination of the insurer's certificate of authority, whichever
56	date is earlier; except, if the department has reason to believe
57	that those in charge of the management of the mutual insurance
58	holding company have caused or encouraged the reduction of the
59	number of members of the insurer in anticipation of liquidation
60	and for the purpose of reducing thereby the number of persons
61	who may be entitled to share in distribution of the insurer's
62	assets, the department may enlarge the 3-year qualification
63	period by such additional time as the department may deem to be
64	reasonable.
65	(2) The distributive share of each such member shall be
66	determined by a formulabased uponthe ratio that the total
67	amount of paid premiums paid by such member for policies of
68	insurance during the 3-year period or part of such period
69	specified in subsection (1) during which such recipient was a
70	member bears to the total amount of paid premiums paid by all
71	members entitled to receive a distributive share as a result of
72	such dissolution during such entire 3-year period and uponsuch
73	reasonable classifications of members as the department may
74	approve.
75	Section 4. Subsection (2) of section 628.730, Florida
76	Statutes, is amended to read:
77	628.730 Merger with intermediate holding company.--
78	(2) The distributive share of each such member shall be
79	determined by a formulabased uponthe ratio that the total
80	amount of paid premiums paid by such member for policies of
81	insurance during the 3-year period or part of such period
82	preceding the date of such merger during which such recipient
83	was a member bears to the total amount of paid premiums paid by
84	all members entitled to receive a distributive share as a result
85	of such merger during such entire 3-year period and uponsuch
86	reasonable classifications of members as the department may
87	approve.
88	Section 5. Paragraph (b) of subsection (2) of section
89	628.733, Florida Statutes, is amended to read:
90	628.733 Converting mutual insurance holding company.--
91	(2) The department shall not approve any such plan and
92	procedure unless:
93	(b) The corporate equity of each membershall be based
94	upon the ratio that the total amount of paid premiums paid by
95	such member for policies of insurance during the 3-year period
96	or part of such period specified in paragraph (c) during which
97	such recipient was a member bears to the total amount of paid
98	premiums paid by all members entitled to receive equity as a
99	result of such conversion during such entire 3-year period and
100	upon such reasonable classifications of members as the
101	department may approve. Suchis determinable under a fair
102	formula approved by the department, whichequity shall be based
103	upon not more than the company's net assets.
104	(c) The persons entitled to participate in the
105	distribution of stock shall include all current members and all
106	existing persons who had been members within 3 years prior to
107	the date such plan was submitted to the department.
108	Section 6. This act shall take effect upon becoming a law.
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