PARRIS N. GLENDENING, Governor

Ch. 108

(ii) to apply on the purchase of proposed capital stock the amount of
the policyholder's equity in the insurer as determined under item (4) (5) of this
subsection;

(7) (8) stock is offered to policyholders at a price that is not greater than
the price at which the stock will be offered to others in the initial offering, but that is not
more than double the par value of the stock;

(8) (9) the plan provides for payment to each policyholder who elects not
to apply the policyholder's equity in the insurer for or on the purchase price of stock to
which the policyholder is preemptively entitled, in cash in an amount that equals not less
than 50% of the amount of the policyholder's equity that was not used for the purchase of
stock, and which payment, together with any stock purchased, constitutes full payment
and discharge of the policyholder's equity as an owner of the insurer; and

(9) (10) the completed plan provides that the converted insurer will have:

(i) paid-in capital stock equal to not less than the minimum paid-in
capital required of a domestic stock insurer that transacts like kinds of insurance
business; and

(ii) surplus funds equal to not less than 100% of the required capital]

(C) WITHIN 60 DAYS OF THE FILING OF A PLAN THAT CONTAINS ALL OF THE
INFORMATION REQUIRED UNDER THIS SECTION AND ANY REGULATIONS ADOPTED
UNDER THIS SECTION, THE COMMISSIONER SHALL APPROVE OR DISAPPROVE THE
PLAN.

(D) AT THE EXPENSE OF THE MUTUAL INSURER. THE COMMISSIONER MAY
RETAIN ANY QUALIFIED EXPERT WHO IS NOT A PART OF THE STAFF OF THE
COMMISSIONER TO ASSIST IN REVIEWING THE PLAN.

(E) AFTER WRITTEN NOTICE TO THE MUTUAL INSURER AND ANY OTHER
INTERESTED PERSON. THE COMMISSIONER MAY HOLD A HEARING ON WHETHER
THE TERMS OF THE PLAN COMPLY WITH THIS SECTION.

(F) (1) IF A MUTUAL INSURER IS INSOLVENT OR, IN THE JUDGMENT OF THE
COMMISSIONER, IS IN A HAZARDOUS FINANCIAL CONDITION, THE BOARD OF
DIRECTORS OF THE MUTUAL INSURER, BY A MAJORITY VOTE MAY REQUEST BY A
PETITION, AS PROVIDED UNDER PARAGRAPH (2) OF THIS SUBSECTION, THAT THE
COMMISSIONER WAIVE THE REQUIREMENTS CONCERNING NOTICE TO, AND
APPROVAL BY. POLICYHOLDERS OF THE PLANNED CONVERSION.

(2) THE PETITION BY THE BOARD OF DIRECTORS SHALL SPECIFY:

(1) THE METHOD AND BASIS FOR ISSUANCE OF THE SHARES OF
CAPITAL STOCK OF THE CONVERTED STOCK INSURER TO AN INDEPENDENT PARTY
IN CONNECTION WITH AN INVESTMENT BY THE INDEPENDENT PARTY IN AN
AMOUNT SUFFICIENT TO RESTORE THE CONVERTED STOCK INSURER TO SOUND
FINANCIAL CONDITION: AND

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