J. MILLARD TAWES, Governor                     1125

(6)   Shares are so offered to policyholders at a price not greater
than to be thereafter offered to others, but at not more than double
the par value of such shares;

(7)   The plan provides for payment to each policyholder not elect-
ing to apply his equity in the insurer for or upon the purchase price
of stock to which preemptively entitled, of cash in the amount of
not less than fifty percent (50%) of the amount of his equity not
so used for the purchase of stock, and which cash payment together
with stock so purchased, if any, shall constitute full payment and
discharge of the policyholder's equity as an owner of such mutual
insurer; and

(8)   The plan, when completed, would provide for the converted
insurer paid-in capital stock in an amount not less than the mini-
mum paid-in capital required of a domestic stock insurer transacting
like kinds of insurance, together with surplus funds in amount not
less than one-half of such required capital.

271.    Consolidation and Merger of Stock Insurers.

(a)   The provisions of article 23 relating to consolidation and
merger of stock corporations shall apply to the consolidations and
mergers of domestic stock insurers and domestic and foreign stock
insurers, except as otherwise provided in this section.

(b)   The articles of consolidation and the articles of merger of
stock insurers shall be submitted to the Commissioner for examina-
tion and approval before the same may be received for record by the
State Department of Assessments and Taxation.

(c)   No such articles of consolidation or merger shall be operative
until the Commissioner, by written endorsement thereon, approves
the articles as being in accordance with the insurance laws of
Maryland.

272.    Mergers and Consolidations, Mutual Insurers.

(a) Any mutual insurance company or companies organized under
the laws of any state of the United States may merge or consolidate
with one or more domestic mutual insurance companies, to form a
domestic mutual insurance company, and the surviving company may
be a continuation of the corporate existence of one or more of the
domestic parties to the agreement. Insurers merging or consolidating
under this section shall enter into a written agreement prescribing
the terms and conditions of the merger and setting forth the name of
the surviving company and its amended certificate of incorporation
which shall contain the provisions required by this article respecting
the organization of a mutual insurer. Such agreement shall be ap-
proved by the vote of a majority of the board of directors of each
company and such agreement shall be submitted to a meeting of
members and approved by the votes of at least two-thirds of those
members of each company who are present and voting at the meet-
ing. Notice shall be mailed to the members of the company not less
than twenty days before the date of the meeting of the time, place
and purpose of the meeting or in lieu thereof, notice shall be pub-
lished at least once a week for three successive weeks in some news-
paper printed in the county in which the company has its principal
office and in addition thereto, in some newspaper printed in either
of the two largest cities in each state in which the company shall be
licensed to do business.