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PARRIS N. GLENDENING, Governor
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S.B. 148
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PLACEMENT OF STOCK, EACH ELIGIBLE MEMBER OF THE MUTUAL INSURANCE
HOLDING COMPANY SHALL RECEIVE, WITHOUT PAYMENT, NONTRANSFERABLE
SUBSCRIPTION RIGHTS TO PURCHASE STOCK, UNLESS:
(I) AT LEAST TWO-THIRDS OF THE BOARD OF DIRECTORS OF THE
MUTUAL INSURANCE HOLDING COMPANY DETERMINES THAT A SUBSCRIPTION
RIGHTS OFFERING IS NOT IN THE BEST INTERESTS OF THE MEMBERS; AND
(II) THE DETERMINATION OF THE BOARD OF DIRECTORS IS
APPROVED BY THE COMMISSIONER
(5) (I) THE FOLLOWING INDIVIDUALS MAY NOT ACQUIRE, BY STOCK
OPTION OR ANY OTHER MANNER, THE LEGAL OR BENEFICIAL OWNERSHIP OF ANY
CLASS OF STOCK OF THE REORGANIZED STOCK INSURER FOR 6 MONTHS FROM THE
DATE OF AN INITIAL PUBLIC OFFERING OR INITIAL PRIVATE EQUITY PLACEMENT:
1. AN OFFICER OR DIRECTOR OF THE MUTUAL INSURANCE
HOLDING COMPANY;
2. AN OFFICER OR DIRECTOR OF THE REORGANIZED STOCK
INSURER; AND
3. ANY RELATIVE OF AN OFFICER OR DIRECTOR, WHO
RESIDES WITH THE OFFICER OR DIRECTOR
(II) NOTWITHSTANDING SUBPARAGRAPH (I) OF THIS PARAGRAPH,
ANY INDIVIDUAL WHO IS A POLICYHOLDER OF THE REORGANIZED STOCK INSURER
MAY EXERCISE SUBSCRIPTION RIGHTS IN ACCORDANCE WITH SUBSECTION (C)(4) OF
THIS SECTION PARAGRAPH (4) OF THIS SUBSECTION.
(D) (1) EACH POLICYHOLDER OF THE REORGANIZED STOCK INSURER SHALL
BE A MEMBER OF THE MUTUAL INSURANCE HOLDING COMPANY.
(2) ON THE EFFECTIVE DATE OF THE REORGANIZATION, THE
MEMBERSHIP INTERESTS OF A POLICYHOLDER IN THE MUTUAL INSURER SHALL
BECOME NONTRANSFERABLE MEMBERSHIP INTERESTS IN THE MUTUAL INSURANCE
HOLDING COMPANY.
(3) THE PLAN OF REORGANIZATION SHALL PROVIDE THE TERMS AND
CONDITIONS UNDER WHICH FUTURE POLICYHOLDERS OF THE REORGANIZED STOCK
INSURER SHALL BECOME MEMBERS OF THE MUTUAL INSURANCE HOLDING
COMPANY.
(4) AT LEAST TWO-THIRDS OF THOSE MEMBERS OF THE BOARD OF
DIRECTORS OF THE MUTUAL INSURANCE HOLDING COMPANY WHO ARE ELIGIBLE OR
QUALIFIED TO PURCHASE A POLICY FROM THE REORGANIZED STOCK INSURER,
SHALL BE MEMBERS OF THE MUTUAL INSURANCE HOLDING COMPANY.
(E) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION, EACH
POLICY OF THE MUTUAL INSURER IN EFFECT ON THE EFFECTIVE DATE OF THE
REORGANIZATION SHALL REMAIN IN EFFECT IN ACCORDANCE WITH ITS TERMS AND
CONDITIONS.
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- 3723 -
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