Title 15, Commerce and TradeRelease 119-110

§6732 Redomestication of Mutual Insurers

Title 15 › CHAPTER 93 — INSURANCE › SUBCHAPTER II — REDOMESTICATION OF MUTUAL INSURERS › § 6732

Last updated Sep 22, 2026|Official source

Summary

A mutual insurance company can move its legal home to another State and change into a stock company owned by a mutual holding company, if the new State’s laws and the protections below are met. After the move the company stops being based in the old State and continues as the same company in the new State. Existing licenses, agent appointments, rates, approvals, and similar authorizations stay in effect so long as the company stays qualified to do business in each State. Existing insurance policies and annuity contracts keep working and do not need new endorsements for the new State unless a State insurance regulator orders that for policyowners who live in that State. A company may have to file new policy forms by the transfer date, but it can use current forms with endorsements showing the new home until the new forms are approved. The company must tell each State insurance regulator about the planned move and promptly file any required corporate paperwork. The reorganization can only happen if the new State regulator finds the plan meets certain rules. The board of directors must approve it by at least a majority. A majority of voting policyholders must also approve after getting notice, full disclosure of effects on their contract rights, and a fair chance to vote. After the change, policyholders must keep the same voting control over the mutual holding company they had before. Any initial public stock sale must follow securities laws and the new State regulator’s rules. For the period the new State law sets after an IPO, or for six months if the State law has no period, officers and directors may not receive stock grants or options except those they already earn as policyholders and with regulator approval. The reorganization must preserve policyholder contract rights and be found fair and equitable by the new State insurance regulator.

Full Legal Text

Title 15, §6732

Commerce and Trade, Source: USLM XML via OLRC

(a)Redomestication

A mutual insurer organized under the laws of any State may transfer its domicile to a transferee domicile as a step in a reorganization in which, pursuant to the laws of the transferee domicile and consistent with the standards in subsection (f), the mutual insurer becomes a stock insurer that is a direct or indirect subsidiary of a mutual holding company.

(b)Resulting domicile

Upon complying with the applicable law of the transferee domicile governing transfers of domicile and completion of a transfer pursuant to this section, the mutual insurer shall cease to be a domestic insurer in the transferor domicile and, as a continuation of its corporate existence, shall be a domestic insurer of the transferee domicile.

(c)Licenses preserved

The certificate of authority, agents’ appointments and licenses, rates, approvals and other items that a licensed State allows and that are in existence immediately prior to the date that a redomesticating insurer transfers its domicile pursuant to this subchapter shall continue in full force and effect upon transfer, if the insurer remains duly qualified to transact the business of insurance in such licensed State.

(d)Effectiveness of outstanding policies and contracts

(1)In general

All outstanding insurance policies and annuities contracts of a redomesticating insurer shall remain in full force and effect and need not be endorsed as to the new domicile of the insurer, unless so ordered by the State insurance regulator of a licensed State, and then only in the case of outstanding policies and contracts whose owners reside in such licensed State.

(2)Forms

(A)Applicable State law may require a redomesticating insurer to file new policy forms with the State insurance regulator of a licensed State on or before the effective date of the transfer.

(B)Notwithstanding subparagraph (A), a redomesticating insurer may use existing policy forms with appropriate endorsements to reflect the new domicile of the redomesticating insurer until the new policy forms are approved for use by the State insurance regulator of such licensed State.

(e)Notice

A redomesticating insurer shall give notice of the proposed transfer to the State insurance regulator of each licensed State and shall file promptly any resulting amendments to corporate documents required to be filed by a foreign licensed mutual insurer with the insurance regulator of each such licensed State.

(f)Procedural requirements

No mutual insurer may redomesticate to another State and reorganize into a mutual holding company pursuant to this section unless the State insurance regulator of the transferee domicile determines that the plan of reorganization of the insurer includes the following requirements:

(1)Approval by board of directors and policyholders

The reorganization is approved by at least a majority of the board of directors of the mutual insurer and at least a majority of the policyholders who vote after notice, disclosure of the reorganization and the effects of the transaction on policyholder contractual rights, and reasonable opportunity to vote, in accordance with such notice, disclosure, and voting procedures as are approved by the State insurance regulator of the transferee domicile.

(2)Continued voting control by policyholders; review of public stock offering

After the consummation of a reorganization, the policyholders of the reorganized insurer shall have the same voting rights with respect to the mutual holding company as they had before the reorganization with respect to the mutual insurer. With respect to an initial public offering of stock, the offering shall be conducted in compliance with applicable securities laws and in a manner approved by the State insurance regulator of the transferee domicile.

(3)Award of stock or grant of options to officers and directors

During the applicable period provided for under the State law of the transferee domicile following completion of an initial public offering, or for a period of six months if no such applicable period is provided, neither a stock holding company nor the converted insurer shall award any stock options or stock grants to persons who are elected officers or directors of the mutual holding company, the stock holding company, or the converted insurer, except with respect to any such awards or options to which a person is entitled as a policyholder and as approved by the State insurance regulator of the transferee domicile.

(4)Policyholder rights

Upon reorganization into a mutual holding company, the contractual rights of the policyholders are preserved.

(5)Fair and equitable treatment of policyholders

The reorganization is approved as fair and equitable to the policyholders by the insurance regulator of the transferee domicile.

Reference

Citations & Metadata

Citation

15 U.S.C. § 6732

Title 15, Commerce and Trade

Last Updated

Sep 22, 2026

Release point: 119-110