Title 18, Insurance Code

§ 4938. Merger, consolidation of mutual insurers — Impaired mutuals. If a domestic mutual insurer is then impaired, that is, if the insurer’s surplus is less than the amount thereof required under this title for authority to transact the kinds of insurance being transacted by the…

§ 4939. Merger, consolidation of mutual insurers — Articles of merger, consolidation, mutual insurers. Upon the approval by the Commissioner and members, if required, and upon agreement of merger or consolidation, articles of merger or consolidation, as the case may be, shall be …

§ 4940. Merger, consolidation of mutual insurers — Filing of articles of merger or consolidation; payment of fees; approval by Secretary of State. (a) The articles of merger or consolidation, as the case may be, referred to in § 4939 of this title, together with a certificate or …

§ 4941. Merger, consolidation of mutual insurers — Issuance of certificate of merger or consolidation; effective date. (a) Immediately upon the Secretary of State’s approval of the articles of merger or consolidation as provided in § 4940 of this title, the Secretary of State sha…

§ 4942. Merger, consolidation of mutual insurers — Effect of merger or consolidation. (a) Upon the merger or consolidation becoming effective, the several corporations, parties to the agreement of merger or consolidation, shall be a single corporation, which in the case of a merg…

§ 4943. Preservation of old charter in merger or consolidation. (a) In any merger or consolidation of a foreign stock or mutual insurer into or with a domestic insurer under § 4930 of this title, in accordance with this section, the continuing Delaware corporation shall for all p…

§ 4944. Bulk reinsurance. (a) A domestic insurer may reinsure all or substantially all of its business in force, or all or substantially all of a major class thereof, with another insurer, stock or mutual, by an agreement of bulk reinsurance after compliance with this section. No…

§ 4945. Mutual member’s share of assets on liquidation. (a) Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration shall …

§ 4946. Redomestication; approval as domestic insurer; conversion to foreign insurer; rules and regulations. (a) Any insurer which is organized under the laws of any other state and is admitted to do business in this State for the purpose of writing insurance may become a domesti…

§ 4970. Finding; purpose. (a) It is determined and declared as a matter of legislative finding that policyholders of a mutual insurer have contractual rights to insurance coverage and certain membership rights consisting principally of the right to elect directors of a mutual ins…

§ 4971. Short title of chapter. This chapter shall be known and may be cited as the “Delaware Insurance Company Mutual-to-Stock Conversion Act.”77 Del. Laws, c. 466, § 2;

§ 4972. Definitions. As used in this chapter, the following words and phrases shall have the meanings as ascribed in this section: (1) “Capital stock” means common or preferred stock or any hybrid security or other equity security issued by a converted stock insurer or other comp…

§ 4973. Adoption of plan of conversion. (a) No plan of conversion shall become effective unless the mutual company seeking to convert to a stock company shall have adopted, by the affirmative vote of not less than 2/3 of its governing body and otherwise in accordance with law, a …

§ 4974. Redomestication and conversion. (a) A foreign mutual insurer or foreign mutual holding company that has filed an application for redomestication may file an application for conversion under this chapter promptly after completion of the redomestication or upon such earlier…

§ 4975. Required provisions of plan of conversion. (a) The following provisions shall be included in the plan: (1) The reasons for proposed conversion. (2) The effect of conversion on existing policies, including all of the following: a. A provision that all policies in force on …

§ 4976. Closed block of business for participating life policies. (a) A plan that is adopted by a mutual company that is a life insurance company which issues participating life policies shall provide that participating life policies in force on the effective date of the conversi…

§ 4977. Optional provisions of plan of conversion. (a) The plan may provide that the directors, officers, and employees of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock …

§ 4978. Alternative plan of conversion. (a) The governing body may adopt a plan of conversion that does not rely in whole or in part upon issuing nontransferable subscription rights to members to purchase stock of the converted stock company if the Commissioner finds that the pla…

§ 4979. Effective date of plan. A plan is effective when the Commissioner has approved the plan, the voting members have approved the plan and adopted the certificate of incorporation of the converted stock company, and the certificate of incorporation is filed in the office of t…

§ 4980. Rights of members whose policies are issued after adoption of plan and before effective date. (a) All members whose policies are issued after the proposed plan has been adopted by the governing body and before the effective date of the plan shall be sent a written notice …

§ 4981. Corporate existence. (a) On the effective date of the conversion, the corporate existence of the mutual company continues in the converted stock company. On the effective date of the conversion, all the assets, rights, franchises, and interests of the mutual company or th…

§ 4982. Conflict of interest. (a) A director, officer, agent, or employee of the mutual company shall not receive any fee, commission, or other valuable consideration, other than such person’s usual regular salary or compensation, for aiding, promoting, or assisting in a conversi…

§ 4983. Failure to give notice. If the mutual company complies substantially and in good faith with the notice requirements of this chapter, the mutual company’s failure to send a member the required notice does not impair the validity of any action taken under this chapter.77 De…

§ 4984. Limitation on actions. Any action challenging the validity of or arising out of acts taken or proposed to be taken under this chapter shall be commenced no later than the latter of: (1) Sixty days after the approval of the plan by the Commissioner; or (2) Thirty days afte…

§ 4985. Mutual company insolvent or in hazardous financial condition. (a) If a mutual company seeking to convert is insolvent or is in hazardous financial condition according to information supplied in its most recent annual or quarterly statement filed with the Department or as …

§ 4986. Rules and regulations. The Commissioner may promulgate rules and regulations to administer and enforce this chapter.77 Del. Laws, c. 466, § 2;

§ 4987. Laws applicable to converted stock company. (a) No mutual company shall be permitted to convert under this chapter if, as a direct result of the conversion, any person or any affiliate thereof acquires control of the converted stock company, unless that person and such pe…

§ 4988. Commencement of business as a stock insurer. No mutual company shall have the power to engage in the business of insurance as a stock company until it complies with all provisions of this chapter.77 Del. Laws, c. 466, § 2;

§ 4989. Amendment of policies. A mutual company, by endorsement or rider approved by the Commissioner and sent to the policyholder, may simultaneously with or at any time after the adoption of a plan of conversion amend any outstanding insurance policy for the purpose of extingui…

§ 4990. Prohibition on acquisitions of control. Except as otherwise specifically provided in § 4975 of this title, from the date a plan of conversion is adopted by the governing body of a mutual company until 3 years after the effective date of the plan of conversion, no person s…

§ 4991. Applicability to existing mutual insurers. (a) Except as provided in subsection (b) of this section, this chapter shall apply to all mutual insurers. (b) Section 4933 of this title as in effect prior to October 17, 2010, is hereby repealed, except as set forth in the next…

§ 5001. Definitions. For purposes of this chapter: (1) “Affiliate.” — An “affiliate” of, or person “affiliated” with, a specific person, is a person that directly, or indirectly through 1 or more intermediaries, controls, or is controlled by, or is under common control with, the …

§ 5002. Subsidiaries of insurers. Any domestic insurer, either by itself or in cooperation with 1 or more persons, may organize or acquire 1 or more subsidiaries as otherwise permitted under this title. Such subsidiaries may conduct any kind of business or businesses and their au…

§ 5003. Acquisition of control of or merger with domestic insurer. (a) Filing requirements. — No person other than the issuer shall make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities, or seek to acquire, or acquir…

§ 5003A. Acquisitions involving insurers not otherwise covered. (a) Definitions. — The following definitions shall apply for the purposes of this section only: (1) “Acquisition” means any agreement, arrangement or activity the consummation of which results in a person acquiring d…

§ 5004. Registration of insurers. (a) Registration. — Every insurer which is authorized to do business in this State and which is a member of an insurance holding company system shall register with the Commissioner, except a foreign insurer subject to registration requirements an…

§ 5005. Standards and management of an insurer within an insurance holding company system. (a) Transactions within an insurance holding company system. — (1) Transactions within an insurance holding company system to which an insurer subject to registration is a party shall be su…

§ 5006. Examination. (a) Power of Commissioner. — Subject to the limitation contained in this section and in addition to the powers which the Commissioner has under Chapter 3 of this title relating to the examination of insurers, the Commissioner shall have the power to examine a…

§ 5007. Confidential treatment. (a) Documents, materials or other information in the possession or control of the Department that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made pursuant to § 5006 of this …

§ 5008. Rules and regulations. The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as shall be necessary to carry out the provisions of this chapter.68 Del. Laws, c. 325, § 1;

§ 5009. Injunctions, prohibitions against voting securities; sequestration of voting securities. (a) Injunctions. — Whenever it appears to the Commissioner that any insurer or any director, officer, employee or agent thereof has committed or is about to commit a violation of this…

§ 5010. Sanctions. (a) Any insurer failing, without just cause, to file any registration statement as required in this chapter shall be required, after notice and hearing, to pay a penalty of $500 for each day’s delay, to be recovered by the Commissioner of Insurance and the pena…

§ 5011. Receivership. Whenever it appears to the Commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its poli…

§ 5012. Recovery. (a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer: (1) From any parent corporation or holding company or person or affiliate wh…

§ 5013. Revocation, suspension or nonrenewal of insurer’s license. Whenever it appears to the Commissioner that any person has committed a violation of this chapter which makes the continued operation of an insurer contrary to the interests of policyholders or the public, the Com…

§ 5014. Supervisory colleges. (a) Power of Commissioner. — With respect to any insurer registered under § 5004 of this title, and in accordance with subsection (c) of this section below, the Commissioner shall also have the power to participate in a supervisory college for any do…