Section 611.73. Merger of mutuals.

 

(1)   Authorization, domestic corporations.

(a) In general. Any 2 or more domestic mutuals may merge under the procedures of this section and ss. 181.1105 and 181.1106 , except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.

(b) Plan of merger and board resolution. The board of directors of each mutual shall, by resolution adopted by each such board, approve a plan of merger that includes all of the following:

1. The names of the mutuals proposing to merge and the name of the surviving mutual into which they propose to merge.

2. The terms and conditions of the proposed merger.

3. The respective interests and rights of the members of the merging mutuals in the surviving mutual.

4. Any change in the articles of incorporation of the surviving mutual to be effected by the merger.

5. Other provisions with respect to the proposed merger that are considered necessary and desirable.

(c) Approval of merger. A plan of merger may be adopted only in the following manner:

1. If the articles of incorporation or bylaws of a merging mutual give members the right to vote on the merger, the board of directors of the mutual shall adopt a resolution approving the proposed plan and directing that it be submitted to a vote at a meeting of members, which may be either an annual or a special meeting. Written notice setting forth the proposed plan or summary of the plan shall be given to each member entitled to vote at the meeting within the time and in the manner provided in this chapter for the giving of notice of meetings of members. The proposed plan shall be adopted by at least two-thirds of the votes entitled to be cast by the members present or represented by proxy at the meeting.

2. If the articles of incorporation or bylaws of any merging mutual do not give the members the right to vote on the merger, a plan of merger shall be adopted at a meeting of the board of directors of each mutual by at least a majority of the directors in office.

(d) Abandonment of merger. After approval under par. (c) and prior to the filing of the articles of merger, the merger may be abandoned pursuant to the provisions for abandonment, if any, set forth in the plan of merger.

(2)   Authorization, domestic and foreign corporations.

(a) In general. Any 2 or more domestic and foreign mutuals may merge if the merger is permitted by the laws of the state in which the foreign mutuals are organized. Each domestic mutual shall comply with the provisions of this section with respect to the merger of domestic corporations and each foreign mutual shall comply with the applicable provisions of the laws of the state under which it is organized.

(b) Effect of merger. The effect of a merger under this subsection is the same as in the case of the merger of domestic mutuals, if the surviving mutual is to be governed by the laws of this state. If the surviving mutual is to be governed by the laws of a state other than this state, the effect of the merger is the same as in the case of the merger of domestic mutuals except as provided by the laws of that other state.

(3)   Approval by the commissioner.

(a) The plan of merger shall be submitted to the commissioner for his or her approval after any necessary action by the boards and before any necessary action by the policyholders. The commissioner shall approve the plan unless he or she finds, after a hearing, that the proposed merger would be contrary to the law or to the interests of the insureds of any participating domestic corporation or the Wisconsin insureds of any participating nondomestic corporation.

(b)

1. If the proposed merger of 2 or more domestic and foreign mutuals will require the approval of more than one commissioner, the hearing under par. (a) may be held on a consolidated basis upon the request of a person filing with the commissioner of insurance of this state the plan of merger under par. (a) and the statement under s. Ins 40.02 (2) , Wis. Adm. Code. The person must request a consolidated hearing when the plan of merger and statement are filed. That person shall file copies of the plan of merger and the statement under s. Ins 40.02 (2) , Wis. Adm. Code, with the National Association of Insurance Commissioners within 5 days after making the request for a consolidated hearing. A hearing conducted on a consolidated basis shall be public and held within the United States before the commissioners of the states in which the insurers involved in the merger are domiciled. The commissioners may hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication.

2. The commissioner of insurance of this state may opt out of a consolidated hearing, and shall provide notice to the person requesting the consolidated hearing of the opt out within 10 days after the commissioner receives the plan of merger under par. (a) and the statement under s. Ins 40.02 (2) , Wis. Adm. Code.

(4)   Voting by policyholders. The commissioner may order that the plan submitted to him or her under sub. (3) (a) be amended to provide for voting by policyholders of any mutual involved.

1971 c. 260 ; 1973 c. 184 ; 1979 c. 102 ss. 105 , 236 (20) ; 1995 a. 27 ; 1997 a. 79 ; 2013 a. 279 .