Bill Text: MI SB1029 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Insurance; insurers; domestic stock insurer divisions; regulate. Amends sec. 7604 of 1956 PA 218 (MCL 500.7604) & adds ch. 55.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-21 - Assigned Pa 0421'18 With Immediate Effect [SB1029 Detail]
Download: Michigan-2017-SB1029-Engrossed.html
SB-1029, As Passed Senate, June 12, 2018
SUBSTITUTE FOR
SENATE BILL NO. 1029
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 7604 (MCL 500.7604), as amended by 1994 PA 226,
and by adding chapter 55.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CHAPTER 55
DOMESTIC STOCK INSURER DIVISION
Sec. 5500. As used in this chapter:
(a) "Assets" means property, whether real, personal, mixed,
tangible, or intangible, and any right or interest in the property,
including all rights under contracts and other agreements.
(b) "Capital" means the capital stock component of statutory
surplus, as defined in the National Association of Insurance
Commissioners Accounting Practices and Procedures Manual, version
effective January 1, 2001, and subsequent revisions.
(c) "Divide" or "division" means the act by operation of law
by which a domestic stock insurer divides into 2 or more resulting
insurers in accordance with a plan of division and this chapter.
(d) "Dividing insurer" means a domestic stock insurer that
approves a plan of division pursuant to section 5505.
(e) "Domestic stock insurer" means a domestic stock insurer
organized or created under the laws of this state.
(f) "Insurer" means a corporation engaged or attempting to
engage in the business of making insurance or surety contracts.
(g) "Liability" means any liability or obligation of any kind,
character, or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, disputed or undisputed,
liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, determined, determinable, or otherwise.
(h) "New insurer" means a domestic stock insurer that is
created by a division occurring on or after the effective date of
the amendatory act that added this chapter.
(i) "Plan of division" means a plan of division approved by a
dividing insurer in accordance with section 5505.
(j) "Resulting insurer" means a domestic stock insurer created
by a division or a dividing insurer that survives a division.
(k) "Shareholder" means the person in whose name a share is
registered in the records of a corporation or the beneficial owner
of a share to the extent of the rights granted by a nominee
certificate on file with a corporation.
(l) "Sign" or "signature" includes a manual, facsimile,
conformed, or electronic signature.
(m) "Surplus" means total statutory surplus less capital,
calculated in accordance with the National Association of Insurance
Commissioners Accounting Practices and Procedures Manual, version
effective January 1, 2001, and subsequent revisions.
(n) "Transfer" includes an assignment, assumption, conveyance,
sale, lease, encumbrance, including a mortgage or security
interest, gift, or transfer by operation of law.
Sec. 5503. (1) A domestic stock insurer may, in accordance
with the requirements of this chapter, divide into 2 or more
resulting insurers pursuant to a plan of division.
(2) Each plan of division must include all of the following:
(a) The name of the domestic stock insurer seeking to divide.
(b) The name of each resulting insurer that will be created by
the proposed division.
(c) For each new insurer that will be created by the proposed
division, a copy of both of the following:
(i) Its proposed articles of incorporation.
(ii) Its proposed bylaws.
(d) The manner of allocating between or among the resulting
insurers both of the following:
(i) The assets of the domestic stock insurer that will not be
owned by, if the dividing insurer survives the division, the
dividing insurer, or, if the dividing insurer does not survive the
division, all of the resulting insurers as tenants in common under
section 5511.
(ii) The liabilities of the domestic stock insurer, including
policy liabilities, to which not all of the resulting insurers will
become jointly and severally liable under section 5513(1)(c).
(e) The manner of distributing shares in the new insurers to
the dividing insurer or its shareholders.
(f) A reasonable description of the liabilities, including
policy liabilities, and items of capital, surplus, or other assets,
in each case, that the domestic stock insurer proposes to allocate
to each resulting insurer, including the manner by which each
reinsurance contract is to be allocated.
(g) All terms and conditions required by the laws of this
state or the articles of incorporation and bylaws of the domestic
stock insurer.
(h) All other terms and conditions of the division.
(3) If the domestic stock insurer will survive the division,
the plan of division must include, in addition to the information
required by subsection (2), all of the following:
(a) All proposed amendments to the dividing insurer's articles
of incorporation and bylaws, if any.
(b) If the dividing insurer desires to cancel some, but fewer
than all, shares in the dividing insurer, the manner in which it
will cancel the shares.
(c) If the dividing insurer desires to convert some, but fewer
than all, shares in the dividing insurer into shares, securities,
obligations, money, other property, rights to acquire shares or
securities, or any combination thereof, a statement disclosing the
manner in which it will convert the shares.
(4) If the domestic stock insurer will not survive the
proposed division, the plan of division must contain, in addition
to the information required by subsection (2), the manner in which
the dividing insurer will cancel or convert shares in the dividing
insurer into shares, securities, obligations, money, other
property, rights to acquire shares or securities, or any
combination thereof.
(5) A dividing insurer may amend a plan of division in
accordance with any procedures set forth in the plan of division
or, if no procedures are set forth in the plan of division, in any
manner determined by the board of directors of the dividing
insurer, except that a shareholder that was entitled to vote on or
consent to approval of the plan of division is entitled to vote on
or consent to any amendment of the plan of division that will
change any of the following:
(a) The amount or kind of shares, securities, obligations,
money, other property, rights to acquire shares or securities, or
any combination thereof, to be received by any of the shareholders
of the dividing insurer under the plan of division.
(b) The articles of incorporation or bylaws of any resulting
insurer that will be in effect when the division becomes effective,
except for changes that do not require approval of the shareholders
of the resulting insurer under its articles of incorporation or
bylaws.
(c) Any other terms or conditions of the plan of division, if
the change would adversely affect the shareholders in any material
respect.
(6) A dividing insurer may abandon a plan of division after it
has approved the plan of division without any action by the
shareholders and in accordance with any procedures set forth in the
plan of division or, if no procedures are set forth in the plan of
division, in a manner determined by the board of directors of the
dividing insurer.
(7) A dividing insurer may abandon a plan of division after it
has filed a certificate of division with the department by filing
with the department a notice of abandonment signed by the dividing
insurer. The notice of abandonment is effective on the date it is
filed with the department and the dividing insurer is considered to
have abandoned its plan of division on that date.
(8) A dividing insurer shall not abandon or amend its plan of
division once the division becomes effective.
Sec. 5505. (1) A domestic stock insurer shall not file a plan
of division with the director of the department unless the plan of
division has been approved in accordance with all provisions of its
articles of incorporation and bylaws and by the board of directors
and shareholders of the dividing insurer.
(2) If a provision of the articles of incorporation or bylaws
of a domestic stock insurer adopted before the effective date of
the amendatory act that added this chapter requires that a specific
number or percentage of the board of directors or shareholders
approve the proposal or adoption of a plan of merger, or imposes
other special procedures for the proposal or adoption of a plan of
merger, the domestic stock insurer shall adhere to the provision in
proposing or adopting a plan of division. If a provision of the
articles of incorporation or bylaws of a domestic stock insurer is
amended on or after the effective date of the amendatory act that
added this chapter, the provision applies to a division only in
accordance with its express terms.
Sec. 5507. (1) A division does not become effective until it
is approved by the director of the department after reasonable
notice and a public hearing. A hearing conducted under this section
must be conducted as a contested case subject to the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(2) Subject to subsection (12), the director of the department
shall approve a plan of division unless the director of the
department finds any of the following:
(a) The interest of the policyholders of the dividing insurer
that may become policyholders of a resulting insurer will not be
adequately protected by the resulting insurer or acquiring party of
a resulting insurer, if any.
(b) After the division, any resulting insurer would not be
able to satisfy the requirements for the issuance of a certificate
of authority.
(c) The division would substantially lessen competition in
insurance in this state or tend to create a monopoly in this state.
(d) The financial condition of an acquiring party of a
resulting insurer, if any, is such that it might jeopardize the
financial stability of the insurer, or prejudice the interest of
its policyholders or the interests of a remaining shareholder that
is unaffiliated with the acquiring party.
(e) The terms of the plan of division are unfair and
unreasonable to the dividing insurer's policyholders or
shareholders.
(f) An acquiring party of a resulting insurer, if any, has
plans or proposals to liquidate the resulting insurer, sell its
assets, or consolidate or merge the resulting insurer with a
person, or to make any other material change in its business or
corporate structure or management, that are unfair and unreasonable
to the resulting insurer's policyholders, and not in the public
interest.
(g) The competence, experience, and integrity of the persons
who would control the operation of a resulting insurer are such
that it would not be in the interest of the resulting insurer's
policyholders or the general public to permit the division.
(h) The division is likely to be hazardous or prejudicial to
the insurance-buying public.
(i) The proposed division violates the uniform voidable
transactions act, 1998 PA 434, MCL 566.31 to 566.45.
(j) The division is being made for purposes of hindering,
delaying, or defrauding any policyholders or other creditors of the
dividing insurer.
(k) One or more resulting insurers will not be solvent on the
consummation of the division.
(l) The assets allocated to 1 or more resulting insurers will
be, on consummation of a division, unreasonably small in relation
to the business and transactions in which the resulting insurer was
engaged or is about to engage.
(3) If a division is undertaken in conjunction with the
divestiture of 1 of the resulting insurers, the director shall not
approve the division until the potential acquiring party has
received the necessary approvals under section 1315 or 7604, as
applicable.
(4) In determining whether the standards set forth in
subsection (2)(i) have been satisfied, the director of the
department shall only apply the uniform voidable transactions act,
1998 PA 434, MCL 566.31 to 566.45, to a dividing insurer in its
capacity as a resulting insurer and shall not apply the uniform
voidable transactions act, 1998 PA 434, MCL 566.31 to 566.45, to
any dividing insurer that is not proposed to survive the division.
(5) In determining whether the standards set forth in
subsection (2)(i), (j), (k), and (l) have been satisfied, the
director of the department may consider, among other things, all
assets, liabilities, and cash flows.
(6) In determining whether the standards set forth in
subsection (2)(i) have been satisfied, with respect to each
resulting insurer, the director of the department shall, in
applying the uniform voidable transactions act, 1998 PA 434, MCL
566.31 to 566.45, do all of the following:
(a) Treat the resulting insurer as a debtor.
(b) Treat liabilities allocated to the resulting insurer as
obligations incurred by a debtor.
(c) Treat the resulting insurer as not having received
reasonably equivalent value in exchange for incurring the
obligations.
(d) Treat assets allocated to the resulting insurer as
remaining property.
(7) All information, documents, materials, and copies of
documents and materials submitted to, obtained by, or disclosed to
the director of the department in connection with a plan of
division or in contemplation of a plan of division, including any
information, documents, materials, or copies provided by or on
behalf of a domestic stock insurer in advance of its adoption or
submission of a plan of division, are confidential and are subject
to the same protection and treatment in accordance with section
1355 as information and documents disclosed to or obtained by the
director of the department in the course of an examination or
investigation made under sections 1351 and 1357 until the time, if
any, that a notice of the hearing contemplated by subsection (1) is
issued.
(8) From and after the issuance of a notice of the hearing
contemplated by subsection (1), all business, financial, and
actuarial information for which the domestic stock insurer requests
confidential treatment, other than the plan of division and any
materials incorporated by reference into or otherwise made a part
of the plan of division that must not be eligible for confidential
treatment after the issuance of a notice of the hearing, continues
to be confidential and is not available for public inspection and
must be subject to the same protection and treatment in accordance
with section 1355 as information and documents disclosed to or
obtained by the director of the department in the course of an
examination or investigation made under sections 1351 and 1357.
However, if the director of the department determines that the
interest of the public in making the information available for
public inspection outweighs the interest of the dividing insurer in
keeping the information confidential, the director of the
department may, after notice and an opportunity to be heard, make
the information available to public inspection in accordance with
the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(9) All expenses incurred by the director of the department in
connection with proceedings under this section, including expenses
for the services of any attorneys, actuaries, accountants, and
other experts not otherwise a part of the director's staff as may
be reasonably necessary to assist the director in reviewing the
proposed division, must be paid by the dividing insurer filing the
plan of division. A dividing insurer may allocate expenses
described in this subsection in a plan of division in the same
manner as any other liability.
(10) If the director of the department approves a plan of
division, the director of the department shall issue an order
approving the plan of division that must be accompanied by findings
of fact and conclusions of law.
(11) The conditions in this section for freeing 1 or more of
the resulting insurers from the liabilities of the dividing insurer
and for allocating some or all of the liabilities of the dividing
insurer are conclusively satisfied if the plan of division has been
approved by the director of the department in a final order, after
all relevant appeals relating to the final order have been
exhausted.
(12) The director may establish any additional procedures
necessary or appropriate in connection with his or her review of a
plan of division.
Sec. 5509. (1) After a plan of division has been adopted and
approved under sections 5503 to 5507, an officer or duly authorized
representative of the dividing insurer shall sign a certificate of
division. The certificate of division is a public document.
(2) The certificate of division must set forth all of the
following:
(a) The name of the dividing insurer.
(b) A statement disclosing whether the dividing insurer will
survive the division.
(c) The name of each new insurer that will be created by the
division.
(d) The date on which the division is to be effective, which
must not be more than 90 days after the dividing insurer has filed
the certificate of division with the department.
(e) A statement that the division was approved by the director
of the department in accordance with section 5507.
(3) The articles of incorporation and bylaws of each new
insurer must satisfy the requirements of the laws of this state.
(4) A certificate of division is effective when filed with the
department as provided in this section or on another date specified
in the plan of division, whichever is later. However, a certificate
of division must become effective not more than 90 days after the
related plan of division has been approved by the department. A
division is effective when the relevant certificate of division is
effective.
Sec. 5511. (1) When a division becomes effective under section
5509(4), all of the following apply:
(a) If the dividing insurer has survived the division:
(i) It continues to exist.
(ii) Its articles of incorporation must be amended, if at all,
as provided in the plan of division.
(iii) Its bylaws must be amended, if at all, as provided in
the plan of division.
(b) If the dividing insurer has not survived the division, its
separate existence ceases to exist, subject to satisfying the other
requirements of this state relating to the surrender of a
certificate of authority to the extent applicable.
(c) All of the following apply to each new insurer:
(i) It comes into existence.
(ii) It shall hold any capital, surplus, and other assets
allocated to the new insurer by the plan of division as a successor
to the dividing insurer, automatically, by operation of law and not
by transfer, whether directly or indirectly.
(iii) Its articles of incorporation, if any, and bylaws, if
any, are effective.
(iv) The director of the department shall issue a certificate
of authority, subject to satisfying the other requirements of this
state relating to the formation and licensure of new domestic stock
insurers to the extent applicable.
(d) Capital, surplus, and other assets of the dividing insurer
are vested as follows:
(i) If it is allocated by the plan of division, it vests in
the applicable resulting insurer as provided in the plan of
division.
(ii) If it is not allocated by the plan of division, it vests,
if the dividing insurer survives the division, in the dividing
insurer or, if the dividing insurer does not survive the division,
equally in the resulting insurers as tenants in common.
(iii) Otherwise it vests as provided in this section without
transfer, reversion, or impairment.
(e) A resulting insurer to which a cause of action is
allocated as provided in subdivision (d) may be substituted or
added in any pending action or proceeding to which the dividing
insurer is a party when the division becomes effective.
(f) The liabilities, including policy liabilities, of the
dividing insurer are allocated between or among the resulting
insurers as provided in section 5513 and each resulting insurer to
which liabilities are allocated is liable only for those
liabilities, including policy liabilities, so allocated as
successors to the dividing insurer, automatically, by operation of
law, and not by transfer or assumption, whether directly or
indirectly.
(g) The shares in the dividing insurer that are to be
converted or canceled in the division are converted or canceled,
and the shareholders of those shares are entitled only to the
rights provided to them under the plan of division and any
appraisal rights that they may have under section 5515.
(2) Except as provided in the articles of incorporation or
bylaws of the dividing insurer, the division does not give rise to
any rights that a shareholder, director of domestic stock insurer,
or third party would have on a dissolution, liquidation, or winding
up of the dividing insurer.
(3) The allocation to a new insurer of capital, surplus, or
other assets that is collateral covered by an effective financing
statement is not effective until a new financing statement naming
the new insurer as a debtor is effective under the uniform
commercial code, 1962 PA 174, MCL 440.1101 to 440.9994.
(4) Unless otherwise provided in the plan of division, the
shares in and any securities of each new insurer must be
distributed to either of the following:
(a) The dividing insurer, if it survives the division.
(b) Shareholders of the dividing insurer that do not assert
any appraisal rights that they may have under section 5515, pro
rata.
(5) A division that becomes effective under section 5509(4) is
not an assignment of any insurance policy, annuity, or reinsurance
agreement or any other type of contract.
Sec. 5513. (1) Except as otherwise expressly provided in this
section, when a division becomes effective, each resulting insurer
is responsible, automatically, by operation of law, for all of the
following:
(a) Individually, the liabilities, including policy
liabilities, that the resulting insurer issues, undertakes, or
incurs in its own name after the division.
(b) Individually, the liabilities, including policy
liabilities, of the dividing insurer that are allocated to the
resulting insurer to the extent specified in the plan of division.
(c) Jointly and severally with the other resulting insurers,
the liabilities, including policy liabilities, of the dividing
insurer that are not allocated by the plan of division.
(2) Except as otherwise expressly provided in this section,
when a division becomes effective, a resulting insurer is not
responsible for and does not have any liability or obligation in
respect of either of the following:
(a) Any liabilities, including policy liabilities, that
another resulting insurer issues, undertakes, or incurs in its own
name after the division.
(b) Any liabilities, including policy liabilities, of the
dividing insurer that are allocated to another resulting insurer in
accordance with the plan of division.
(3) If a provision of any debt security, note, or similar
evidence of indebtedness for money borrowed, whether secured or
unsecured, indenture, or other contract relating to indebtedness,
or a provision of any other type of contract other than an
insurance policy, annuity, or reinsurance agreement, that was
issued, incurred, or executed by the domestic stock insurer before
the effective date of the amendatory act that added this chapter
requires the consent of the obligee to a merger of the dividing
insurer or treats the merger as a default and does not provide that
a division of the insurer does not require the consent of the
obligee, as applicable, that provision applies to a division of the
dividing insurer as if the division were a merger.
(4) If, after the approval of a plan of division, it is found
that the act of undertaking a division itself breached a
contractual obligation of the dividing insurer when the division
became effective, all of the resulting insurers are liable, jointly
and severally, for the contractual breach, but the validity and
effectiveness of the division, including, without limitation, the
allocation of liabilities in accordance with the plan of division,
is not affected by the contractual breach.
(5) A direct or indirect allocation of capital, surplus,
assets, or liabilities, including policy liabilities, in a division
must occur automatically, by operation of law, and is not treated
as a distribution or transfer for any purpose with respect to
either the dividing insurer or any of the resulting insurers.
(6) Liens, security interests, and other charges on the
capital, surplus, or other assets of the dividing insurer are not
impaired by the division, notwithstanding any otherwise enforceable
allocation of liabilities, including policy liabilities, of the
dividing insurer.
(7) If the dividing insurer is bound by a security agreement
under article 9 of the uniform commercial code, 1962 PA 174, MCL
440.9101 to 440.9994, or the substantial equivalent enacted in any
other jurisdiction, and the security agreement provides that the
security interest attaches to after-acquired collateral, each
resulting insurer is bound by the security agreement.
(8) An allocation of a policy or other liability does not do
either of the following:
(a) Except as provided in the plan of division and
specifically approved by the director, affect the rights that a
policyholder or creditor has under other law in respect of the
policy or other liability, except that those rights are available
only against a resulting insurer responsible for the policy or
liability under this section.
(b) Release or reduce the obligation of a reinsurer, surety,
or guarantor of the policy or liability.
(9) A resulting insurer is only liable for the liabilities
allocated to it in accordance with the plan of division and this
section and is not liable for any other liabilities under the
common law doctrine of successor liability or any similar theory of
liability applicable to transferees or assignees of property.
Sec. 5515. If the dividing insurer does not survive the
division, a record shareholder of a dividing insurer is entitled to
dissent from and obtain payment of the fair value of that
shareholder's shares, in the same manner and to the extent provided
for under sections 1762 to 1774 of the business corporation act,
1972 PA 284, MCL 450.1762 to 450.1774.
Sec. 5517. (1) A shareholder of a dividing insurer is entitled
to dissent from, and obtain payment of the fair value of the
shareholder's shares in connection with, a division under this
chapter in which the dividing insurer does not survive the
division, unless the shares are converted into or canceled solely
for 1 or more of the following:
(a) Cash.
(b) Shares that are listed on a national securities exchange
or designated as a national market system security on an
interdealer quotation system by the National Association of
Securities Dealers, on the record date fixed to vote on the plan of
division.
(2) Section 1762 of the business corporation act, 1972 PA 284,
MCL 450.1762, applies to a shareholder exercising the rights in the
same manner as would be applicable to a merger of a domestic
corporation.
Sec. 7604. (1) An insurer organized under the laws of this
state and transacting business under this act may consolidate or
merge with or reinsure all or any part of its outstanding risks for
the purpose of effecting a merger or consolidating with an insurer
of generally like character authorized to transact business in this
state under terms that are reasonable and just. "Consolidation" and
"merger",
as used in this chapter, include a transaction where in
which
an authorized insurer authorized
to transact business in this
state,
which that is a wholly-owned subsidiary of a controlling
corporation, which need not be an insurer, distributes shares of
the capital stock of the controlling corporation in merging another
insurer into the subsidiary or in merging the subsidiary into
another insurer. If an insurer proposes to consolidate or merge
with, or reinsure all of its outstanding risk with, another insurer
for the purpose of effecting a merger or consolidation, the
following
procedure shall must be followed:
(a)
The insurers shall petition the commissioner, director,
setting forth the terms and conditions of the proposed
consolidation, merger, or agreement of reinsurance, to which the
commissioner
director may in his or her discretion grant
preliminary, tentative, or conditional approval.
(b)
After securing the approval from the commissioner,
director, the insurers shall give notice, either personally or
through mailing at least 21 days before the time fixed for the
meeting, to the last known postal address of each stockholder,
subscriber, or member, that the question of the consolidation,
merger,
or reinsurance will be voted upon on at a regular or
special meeting of the stockholders, subscribers, or members, which
notice
shall must fairly but briefly describe the proposed
procedure.
(c) The consolidation, merger, or contract of reinsurance for
the
purpose of effecting a merger or consolidation shall must be
approved at the regular or special meeting held in pursuance of the
call and notice, by the affirmative vote of not less than a
majority of the members or subscribers voting in person or by proxy
if it is a mutual or a cooperative or assessment corporation or a
reciprocal or interinsurance exchange, or not less than a majority
of the outstanding capital stock, if it is a stock company.
(d) The consolidation or merger agreement or contract of
reinsurance for the purpose of effecting a merger or consolidation,
together with proper proof that it has been approved by the
stockholders, subscribers, or members as provided in this section,
shall
must be submitted to the commissioner director for
final
approval.
This contract shall is not become effective until the
commissioner,
director, in his or her discretion, issues a
certificate of final approval to the petitioner. If the terms of
the consolidation or merger or reinsurance contract for the purpose
of
effecting a the merger or consolidation provide that securities
shall
must pass to an insurer assuming the liabilities for
which
the securities are held, a public official, or other person or
company
holding the securities, shall, upon on the written order of
the
commissioner director, deliver the securities to or credit the
securities to the account of the corporation, corporations, person,
or persons entitled to the securities by the terms of the contract
and
the order of the commissioner.director.
(2) To facilitate the merger of any resulting insurer with and
into another company simultaneously with the effectiveness of a
division authorized by this act, a dividing insurer, including its
officers, directors, and shareholders, may adopt and execute a plan
of merger or consolidation on behalf of a resulting insurer and may
execute and deliver documents, plans, certificates, and
resolutions, and may make any filings, in each case, on behalf of
the resulting insurer. If provided in a plan of merger or
consolidation described in this subsection, the merger or
consolidation is effective simultaneously with the effectiveness of
a division authorized by this act. On request of the dividing
insurer, the director may waive the other requirements of this
section with respect to any merger or consolidation involving only
domestic stock insurers and may issue its final approval of the
merger or consolidation as part of its approval of a plan of
division under this act.
(3) (2)
Consolidation, merger, or
reinsurance for the purpose
of effecting a merger or consolidation of all of the insurance risk
of
any membership corporation under this section, shall act acts as
a
dissolution of the corporation except in the case of for a
stock
company,
which shall must be dissolved in accordance with the
business
corporation act, Act No. 284 of the Public Acts of 1972,
being
sections 1972 PA 284, MCL 450.1101 to 450.2098. of the
Michigan
Compiled Laws. All liability upon
on a stock company's
certificates
or contracts shall cease upon ceases
on the expiration
of
5 days following after the consolidation, merger, or reinsurance
for the purpose of effecting a merger or consolidation, but its
officers may thereafter perform any act or acts necessary to close
its
affairs with the approval of the commissioner.director.
(4) (3)
This section shall does not
be construed to prohibit
an insurer from reinsuring a fractional part or all of an
individual risk in the usual or incidental conduct of its business.
(5) (4)
Consolidation, merger, or
reinsurance for the purpose
of effecting a merger or consolidation of all or a substantial
portion
of the risks of a fraternal benefit society shall be is
governed by this section insofar as not otherwise regulated by
chapter 81a, specifically governing fraternal benefit societies.
(6) (5)
This section shall does not
be construed to prohibit a
title insurance corporation from acquiring by merger, exchange of
stock,
or otherwise, if permitted by and pursuant to Act No. 284 of
the
Public Acts of 1972, under
the business corporation act, 1972
PA 284, MCL 450.1101 to 450.2098, a corporation engaged in the
general
abstract business or the assets of such a corporation
engaged in the general abstract business.
(7) (6)
Notwithstanding subsection (1), when
if a farmers
mutual insurer organized under chapter 68 proposes to merge with
any other mutual insurer, the surviving insurer may give notice to
its members by publication as provided in section 5214(2).
