Pennsylvania Act 1921-103 — LIFE INSURANCE COMPANIES, STOCK OF

Act text

LIFE INSURANCE COMPANIES, STOCK OF
                 Act of Apr. 20, 1921, P.L. 175, No. 103              Cl. 40
                                  AN ACT

     To permit any corporation with capital stock and transacting the
        business of life insurance on the mutual plan or any life
        insurance corporation having capital stock incorporated under
        the provisions of any general or special law of this
        Commonwealth, to acquire its capital stock for the benefit of
        its policy-holders, and to convert such corporation into a
        mutual life insurance corporation, and to provide a method
        therefor.

        Section 1.  Be it enacted, &c., That it shall be lawful for
     any corporation with capital stock and transacting the business
     of life insurance on the mutual plan or any life insurance
     corporation having capital stock incorporated under the
     provisions of any general or special law of this Commonwealth,
     to acquire the shares of the capital stock of such corporation
     for the benefit of its policy-holders, and to convert such
     corporation into a mutual life insurance corporation in the
     manner hereinafter provided.
        Section 2.  Any such corporation may carry out a plan for the
     acquisition of the shares of its capital stock for the purposes
     aforesaid: Provided, however, That such plan shall have been
     adopted and approved as herein set forth, to wit:
        I.  Such plan shall have been adopted by a vote of a majority
     of the entire number of the directors of such corporation.
        II.  Such plan shall have been submitted to the Insurance
     Commissioner of this Commonwealth, and shall have been approved
     by him in writing.
        III.  Such plan shall have been approved by a vote of the
     stock-holders of such corporation, representing a majority in
     amount of the entire capital stock of such corporation, at a
     special meeting of stock-holders called for the purpose. Notice
     of the time, place, and object of said meeting shall be given to
     the stock-holders by publication, once a week for three
     successive weeks before said meeting, in at least two daily or
     weekly newspapers and in the legal periodical, if any,
     designated by the rules of court of the proper county for the
     publication of legal notices, published in the county, city, or
     borough wherein such corporation has its principal office. At
     said meeting, or any adjournment thereof, an election of the
     stock-holders shall be taken for or against such plan, which
     shall be conducted by three judges, stock-holders of such
     corporation, appointed by the board of directors to hold said
     election. If one or more of said judges be absent, the judge or
     judges present shall appoint a judge or judges, who shall act in
     the place of the judge or judges absent, and said judges shall
     respectively take and subscribe an oath or affirmation, before
     an officer authorized by law to administer the same, well and
     truly and according to law to conduct such election to the best
     of their ability. The stock-holders may vote in person or by
     proxy, and all votes shall be cast by ballot. Each share of
     stock shall entitle the holder thereof to one vote. The said
     judges shall decide upon the qualifications of voters, and, when
     the election is closed, count the number of shares voted for and
     the number shares voted against such plan, and declare whether
     the persons and bodies corporate holding a majority in amount of
     the entire capital stock of such corporation have approved or
     disapproved such plan; and shall make out triplicate returns of
     said election, stating the number of shares of stock that voted
     for such plan and the number of shares that voted against such
     plan, and subscribe and deliver the same to one of the chief
     officers of such corporation. Each ballot shall have indorsed
     thereon the number of shares represented thereby, but no share
     or shares transferred within twenty-one days shall entitle the
     holder or holders thereof to vote at such election or meeting.
     It shall be the duty of such corporation to furnish the judges
     at said meeting with a statement of the amount of its capital
     stock, with the names of persons or bodies corporate holding the
     same, and the number of shares by each respectively held, which
     statement shall be signed by one of the chief officers of such
     corporation, with an affidavit thereto annexed that the same is
     true and correct to the best of his knowledge and belief.
        IV.  Such plan shall have been approved by a majority vote of
     the policy-holders of such corporation whose insurance shall
     then be in force, voting at a meeting called for the purpose.
     Notice of the time, place, and object of said meeting shall be
     given to the policy-holders by publication, once a week for
     three successive weeks before said meeting, in at least two
     daily or weekly newspapers and in the legal periodical, if any,
     designated by the rules of court of the proper county for the
     publication of legal notices, published in the county, city, or
     borough wherein such corporation has its principal office, and
     in at least one daily or weekly newspaper published in the
     capital city of each and every State of the United States in
     which such corporation does business. At said meeting thus
     called, or any adjournment thereof, an election of policy-
     holders, as aforesaid, shall be taken for or against such plan,
     which shall be conducted by three judges, policy-holders of such
     corporation, appointed by the Insurance Commissioner of this
     Commonwealth to hold said election. If one or more of said
     judges be absent, the judge or judges present shall appoint a
     judge or judges, who shall act in the place of the judge or
     judges absent, and said judges shall respectively take and
     subscribe an oath or affirmation, before an officer authorized
     by law to administer the same, well and truly and according to
     law to conduct said election to the best of their ability. All
     votes shall be cast by ballot. Each policy-holder as aforesaid
     shall be entitled to cast one vote in person or by proxy:
     Provided, however, That no proxy shall be received or entitle
     the holder to vote unless the same shall bear date or have been
     executed within two months next preceding said election or
     meeting. The said judges shall decide upon the qualifications of
     voters, and, when the election is closed, count the number of
     votes cast for and the number of votes cast against such plan,
     and declare whether a majority of policy-holders voting at said
     meeting have approved or disapproved such plan; and shall make
     out triplicate returns of said election, stating the number of
     policy-holders who voted for such plan and the number of policy-
     holders who voted against such plan, and subscribe and deliver
     the same to one of the chief officers of such corporation. It
     shall be the duty of such corporation to produce to said judges
     such books, records, and papers of such corporation, as said
     judges may request in order to assist them in the proper conduct
     of said meeting.
        Section 3.  Such corporation shall, within thirty days after
     such plan shall have been adopted and approved as hereinbefore
     provided, file, in the office of the Secretary of the
     Commonwealth and in the office of the Insurance Commissioner, a
     copy of such plan, a copy of the resolution of the directors
     adopting such plan, one of the copies of the return of said
     stock-holders' meeting, and one of the copies of the return of
     said policy-holders' meeting, which shall be lawful notice to
     all interested parties of the adoption and approval of such plan
     as aforesaid. If any stock-holder or stock-holders of such
     corporation shall not have consented to such plan, it shall be
     lawful for such stock-holder or stock-holders, at any time
     within thirty days from the time of filing of the papers
     aforesaid in the offices of the Secretary of the Commonwealth
     and of the Insurance Commissioner, to apply by petition to any
     court of common pleas in the county in which the principal
     office of such corporation may be situate to appoint an assessor
     or assessors to appraise the share or shares of stock of said
     stock-holder or stock-holders in such corporation, or, on
     failure of said stock-holder or stock-holders to apply for the
     appointment of an assessor or assessors within the time
     aforesaid, such corporation may make such application. Upon such
     petition for the appointment of an assessor or assessors being
     filed, said court shall direct such notice to be given as the
     court shall deem proper to such corporation, if the petition
     shall have been filed by said stock-holder or stock-holders, or
     to said stock-holder or stock-holders, if the petition shall
     have been filed by such corporation, and, upon proof being made
     of the giving of such notice, and upon hearing all parties in
     interest who may appear in response thereto, it shall be the
     duty of said court to appoint an assessor or assessors as
     aforesaid, and the person or persons so appointed shall appraise
     the share or shares of said stock-holder or stock-holders
     without regard to any appreciation or depreciation in
     consequence of such plan, and such appraisement, when confirmed
     by said court, shall be final and conclusive. Such corporation
     shall at its election either: (a) Pay to said stock-holder or
     stock-holders the value of said share or shares so ascertained,
     whereupon said stock-holder or stock-holders shall transfer the
     share or shares of stock so held by them to such corporation; or
     (b) deposit the value as aforesaid of said share or shares of
     said stock-holder or stock-holders with said court; whereupon
     said stock-holder or stock-holders shall cease to have any
     interest in said share or shares or in such corporation or in
     the property or assets of such corporation, and said share or
     shares shall be and become the property of such corporation;
     and, in case the value as aforesaid of said share or shares
     shall not be so paid or deposited within thirty days after the
     said appraisement or award shall have been made and confirmed by
     said court, the said appraisement or award so made and confirmed
     shall be filed in the office of the prothonotary of said court
     as a judgment against such corporation, and may be collected as
     other judgments in said court are by law recoverable. The cost
     of said court proceedings, including a reasonable allowance to
     said assessor or assessors, shall be paid by such corporation
     upon the approval and order of said court.
        Section 4.  When such corporation shall have acquired all the
     shares of the capital stock thereof, the same shall be duly
     canceled by such corporation, and such fact shall be set forth
     in duplicate certificates to be executed by the secretary of
     such corporation under the seal thereof. One of said
     certificates shall be filed in the office of the Secretary of
     the Commonwealth, and the other thereof shall be filed in the
     office of the Insurance Commissioner, whereupon all rights of
     the stockholders of such corporation to vote at any meeting of
     such corporation or to retain any interest in such corporation
     or in the property or assets thereof shall absolutely cease and
     determine, and thereupon such corporation shall be and become a
     mutual life insurance corporation under such new corporate name
     or title as may have been adopted in and by the plan aforesaid,
     and the Secretary of the Commonwealth shall issue to such
     corporation a certificate, under his hand and the seal of his
     office, granting to such corporation the use of said new
     corporate name or title, and such corporation shall be and
     become subject to the provisions of, and have and enjoy the
     rights and privileges and exercise the powers conferred by, the
     then existing general act or acts of this Commonwealth providing
     for the incorporation of mutual life insurance companies, in
     lieu of the provisions of and the rights and privileges
     conferred by any general or special act or acts theretofore
     governing such corporation.