11535.1
. The definitions in this section apply to the following
terms when used in this chapter.
(a) "Adoption date" means the date the board of directors adopts
the plan of conversion.
(b) "Converted company" means the converted insurer or converted
mutual holding company, as the case may be.
(c) "Converted insurer" means the incorporated stock insurer into
which a mutual insurer has been converted or merged or redomiciled in
accordance with the provisions of this chapter.
(d) "Converted mutual holding company" means the stock corporation
into which a mutual holding company has been converted in accordance
with this chapter.
(e) "Converting mutual life company" means, for a plan of
conversion under this chapter, the mutual life insurer or mutual
holding company that is converting under such a plan.
(f) "Effective date" means, for the conversion of a mutual life
insurer, the date upon which the conversion of the mutual life
insurer is effective, as specified in the commissioner's amendment to
the mutual life insurer's certificate of authority issued in
accordance with Section 11542, as a result of conversion proceedings
under this chapter. For the conversion of a mutual holding company,
"effective date" means the date upon which the conversion of a mutual
holding company is effective, as specified in the amended articles
of incorporation of the mutual holding company filed with the
Secretary of State in accordance with Section 11542, as a result of
conversion proceedings under this chapter.
(g) "Eligible members" means, for the conversion of a mutual life
insurer, the members of the mutual life insurer who are of record on
the mutual life insurer's adoption date. For the conversion of a
mutual holding company, "eligible members" means the members of the
mutual holding company who are of record on the mutual holding
company's adoption date.
(h) "Member" means a person who, by the records of the mutual
company and by its articles of incorporation or bylaws, is deemed to
be a holder of a membership interest in the mutual company. For a
mutual life insurer, a plan of conversion may provide that the term
"member" also includes a person who is the owner of a policy issued
or assumed by an insurer, that, pursuant to court order, is to be
merged into the converted company. On and after the effective date of
a plan of conversion that creates a mutual holding company, the term
"member" means a member of a mutual holding company, as provided in
Section 11542.1.
(i) "Membership interests" means the interests of members arising
under this code and the articles of incorporation and bylaws of the
mutual company or otherwise by law. Membership interests include the
right to vote for directors of the mutual company and the right to
vote on any plan of merger, consolidation, reinsurance, or transfer
of assets and liabilities of the mutual company. Membership interests
do not include members' rights in surplus, if any.
(j) "Mutual company" means, in the case of a plan of conversion,
the mutual life insurer, mutual property-casualty insurer, or mutual
holding company that is converting pursuant to such plan.
(k) "Mutual holding company" means a corporation organized under
the laws of this state subject to the General Corporation Law as set
forth in the Corporations Code. The articles of incorporation of a
mutual holding company shall contain provisions stating the
following:
(1) It is a mutual holding company organized under this chapter.
(2) One purpose of the mutual holding company is to hold not less
than 51 percent of the voting stock of a stock holding company, which
in turn holds all of the voting stock of a converted life insurer.
(3) It is not authorized to issue voting stock.
(4) Its members have the rights specified in Section 11542.1 and
in its articles of incorporation and bylaws.
(5) Its assets and liabilities are subject to inclusion in the
estate of the converted insurer in any proceedings successfully
prosecuted against the converted insurer under Article 14 (commencing
with Section 1010) or Article 14.3 (commencing with Section 1064.1)
of Chapter 1 of Part 2 of Division 1.
(l) "Mutual insurer" means, in the case of a plan of conversion
under this chapter, the mutual life insurer or mutual
property-casualty insurer that is converting pursuant to such plan.
(m) "Mutual life insurer" means a domestic incorporated mutual
life insurer, or domestic mutual life and disability insurer, that
issues nonassessable policies on a reserve basis.
(n) "Person" means an individual, partnership, firm, association,
corporation, joint-stock company, limited liability company, trust,
government or governmental agency, state or political subdivision of
a state, public or private corporation, board, association, estate,
trustee, or fiduciary, or any similar entity.
(o) "Plan of conversion" or "plan" means a plan adopted by a
mutual company in compliance with this chapter.
(p) "Policy" means an individual or group policy of insurance
issued by a life insurer. If a policy of a mutual life insurer takes
a form other than an individual form but holders of certificates or
other interests under the policy are treated by the mutual life
insurer as if they were holders of individual policies, the mutual
life insurer may provide in its plan of conversion under this chapter
that such a certificate or other interest is deemed to be a policy
and deem the holder of the certificate or other interest to be an
owner of a policy. Such a provision shall be for the sole purpose of
determining the rights, if any, of policyholders of the mutual life
insurer to vote upon and receive consideration under the plan of
conversion and may not affect the other voting rights and
qualifications of members of the mutual life insurer.
(q) "Policyholder" means the holder of a policy other than a
reinsurance contract.
(r) "Rights in surplus," for a mutual life insurer, means rights
of members of the insurer to a return of that portion of the surplus
that has not been apportioned or declared by the board of directors
for policyholder dividends. "Rights in surplus" includes rights of
members of the insurer to a distribution of surplus in liquidation or
conservation of the insurer under this code, or in a dissolution or
winding up. "Rights in surplus," for a mutual holding company, means
rights of members of the company to a return of any surplus that has
not been apportioned or declared by its board of directors for member
dividends. "Rights in surplus" includes rights of members of the
mutual holding company to a distribution of surplus in liquidation or
conservation of the insurer under this code, or in a dissolution or
winding up. "Rights in surplus" does not include any right expressly
conferred solely by the terms of an insurance policy.
(s) "Stock holding company" means a corporation authorized to
issue one or more classes of capital stock, the corporate purposes of
which include holding all of the voting stock in an insurer that has
been converted from a mutual life insurer to a stock life insurer in
proceedings under Section 11537.2 in which a mutual holding company
is formed.
(t) "Voting stock" means securities of any class or any ownership
interest having voting power for the election of directors, trustees,
or management of a person, other than securities having voting power
only because of the occurrence of a contingency. All references to a
specified percentage of voting stock of any person mean securities
having the specified percentage of the voting power in that person
for the election of directors, trustees, or management of that
person, other than securities having voting power only because of the
occurrence of a contingency.