Section 7302. Conversion of stock life insurance companies into mutual companies

(a) A domestic stock life  insurance  company  may  become  a  mutual  life  insurance  company,  whether or not its policyholders have
  become entitled to vote for directors pursuant to section four  thousand
  two  hundred  twelve of this chapter or the former insurance law, and to
  that end may formulate and carry out a plan for the acquisition  of  its
  outstanding shares, as follows:
    (1)  Such  plan shall have been adopted by a vote of a majority of the
  directors of the company.
    (2) Such plan shall have been  approved  by  a  vote  of  shareholders
  representing  a  majority  of the outstanding shares at a meeting called
  for that purpose.
    (3) Such plan shall have been approved by the vote of  a  majority  of
  the policyholders eligible to vote who vote at a meeting called for that
  purpose. Any policyholder who holds life insurance in such company in an
  amount  at  least equal to one thousand dollars or an equivalent thereto
  as hereinafter provided and whose insurance is then  in  force  and  has
  been in force for at least one year prior to such shareholders' meeting,
  shall  be  eligible  to vote thereat, either in person or by proxy or by
  mail. The aforementioned reference to life insurance  in  an  amount  at
  least  equal  to  one  thousand  dollars  shall be deemed to include, as
  equivalent thereto, an annuity contract which at normal date of maturity
  requires the payment of one hundred dollars or  more  annually,  a  pure
  endowment  contract  for  the  principal  sum of one thousand dollars or
  more, and a policy of accident or health insurance requiring the payment
  of a premium of not less than twenty-five dollars annually.  In the case
  of every  policy  or  contract  of  group  insurance  or  group  annuity
  contract,  issued  by such company, the employer, or other person, firm,
  corporation or association to whom or in whose name  the  master  policy
  shall have been issued and held, shall be deemed one policyholder within
  the  meaning of this paragraph. Notice of such meeting shall be given by
  mailing such notice from the home office of such company at least thirty
  days prior to such meeting,  in  a  sealed  envelope,  postage  prepaid,
  addressed  to  each  policyholder at his last known post office address.
  Such meeting shall be conducted in such manner as may be provided for in
  such plan, with the approval of the superintendent.  The  superintendent
  shall  supervise  and  direct  the methods and procedure of such meeting
  and, to  conduct  the  voting,  shall  appoint  an  adequate  number  of
  inspectors  who  shall  have power to determine all questions concerning
  the validity and verification of the ballots, the qualifications of  the
  voters  and the canvass of the vote. Such inspectors, or any one thereof
  designated by the superintendent, shall certify  to  the  superintendent
  and  to  such company the result of such vote, under such rules as shall
  be prescribed by the superintendent. All necessary expenses incurred  by
  the  superintendent  or  incurred  with  his  approval by the inspectors
  appointed by him shall be paid by such company upon the  certificate  of
  the superintendent.
    (4)  Such  plan  may  specify  the  purchase  price to be paid by such
  company for its shares, and in such case the price so specified shall be
  adhered to. If such plan does not specify the price to be paid for  such
  shares,   the   company   shall   first   obtain  the  approval  of  the
  superintendent for every payment made for the acquisition of any shares.
    (5) The plan shall name three trustees authorized to receive shares of
  the company and hold them in  trust  for  all  policyholders  until  the
  conversion  process  has been completed. The plan shall provide a method
  for filling vacancies among the trustees.
    (6) The plan shall have  been  submitted  to  the  superintendent  and
  approved  as  conforming  to the requirements of this chapter and as not

  prejudicial to the policyholders of  the  company  or  to  the  insuring
  public.    Before  approving  any  such  plan  or  any such payment, the
  superintendent shall be satisfied, by such investigation as he may  make
  or  by  such  evidence  as  he  may  require,  that  such company, after
  deducting  the  aggregate  sum  appropriated  by  such  plan   for   the
  acquisition  of any or all of its shares, and in the case of any payment
  not fixed by such plan, after deducting also the amount of such payment,
  will be possessed of admitted assets in an amount equal to the sum of:
    (A)  its  entire  liabilities,  including  the  net  values   of   its
  outstanding contracts computed in accordance with the provisions of this
  chapter,
    (B)  the  minimum  surplus  prescribed by this chapter for mutual life
  insurance companies organized to do the same kinds of business, and
    (C) an additional contingent  surplus  deemed  by  the  superintendent
  necessary  to  protect  the  company's  policyholders  and  the insuring
  public, in view of the past experience of such company, the character of
  its assets, its present management, and its probable future earnings.
    (7) No change shall be made in any such plan, adopted and approved  as
  aforesaid,  except  upon the formulation, adoption and approval of a new
  plan in accordance with the foregoing requirements.
    (8) In pursuance of any such plan to convert  a  domestic  stock  life
  insurance  company  into  a  mutual life insurance company, such company
  shall have power, and shall be privileged, to acquire any of its  shares
  by  gift,  bequest, or purchase. Until all of its outstanding shares are
  acquired, any shares so acquired shall be taken and held  in  trust  for
  all  the  policyholders  of  such company, by the trustees named in such
  plan. Before undertaking any of  the  duties  of  the  appointment  each
  trustee shall file with the company an acceptance of the appointment and
  a  declaration  that he will faithfully discharge his duties as trustee,
  subscribed and affirmed by him as true under the penalties  of  perjury.
  All  shares  held by the trustees shall be deemed admitted assets of the
  company at their par value. The trustees shall have power  to  vote  any
  shares  so acquired at all corporate meetings at which shareholders have
  the right to vote.  All  dividends  and  other  sums  received  by  such
  trustees  on  the  shares  acquired  by them, after paying the necessary
  expenses of the trust, shall be immediately repaid to such  company  for
  the  benefit  of all who are or may become policyholders of such company
  and entitled to participate in the profits thereof, and shall  be  added
  to   and   become  a  part  of  the  surplus  earned  by  such  company,
  apportionable as a part of such surplus among such policyholders.    The
  provisions of section six hundred twenty-one of the business corporation
  law and of section 9-1.1 of the estates, powers and trusts law shall not
  apply to the trust hereinbefore authorized.
    (b) (1) Whenever:
    (A)  a  plan adopted and approved in accordance with subsection (a) of
  this section shall have been in effect for more than ten years,
    (B) the company shall have acquired and transferred  to  the  trustees
  under the plan at least ninety percent of its outstanding shares,
    (C)   the  plan  itself  contains  no  provision  for  the  compulsory
  completion of the mutualization of the  company  inconsistent  with  the
  terms  of  subsection  (a) hereof, the directors by a vote of a majority
  may offer to acquire by purchase all of the shares of  the  company  not
  theretofore acquired under the plan, at a specified price, uniform as to
  class and series of shares, which the company considers to be their fair
  value  as  of  the date of making such offer. Before such offer shall be
  made, it shall be submitted to the superintendent for  approval.  Before
  approving  any such offer the superintendent shall be satisfied, by such
  investigation as he may make or by such evidence as he may require, that

  the offer complies with the requirements  of  this  chapter,  that  such
  acquisition   of  such  shares  pursuant  to  such  offer  will  not  be
  prejudicial to the policyholders of the company and that  such  company,
  after  deducting  the  sum  required to acquire such shares at the price
  stated in such offer, or any lesser  price  agreeable  to  shareholders,
  will be possessed of admitted assets in an amount equal to the sum of:
    (i)   its   entire  liabilities,  including  the  net  values  of  all
  outstanding contracts computed in accordance with the provisions of this
  chapter;
    (ii) the minimum surplus prescribed by this chapter  for  mutual  life
  insurance  companies organized to do the same kind or kinds of business;
  and
    (iii)  such  additional  contingent  surplus  based  upon   the   past
  experience  of  such company, its assets, its present management and its
  probable future  earnings  as  the  superintendent  deems  necessary  to
  protect its policyholders.
    (2)  If  the  offer is approved by the superintendent, the company may
  make a written offer, by registered  mail,  to  each  shareholder  whose
  shares  have not theretofore been acquired by the company under the plan
  or otherwise, to acquire all  his  shares  at  the  specified  price  if
  accepted  in writing within thirty days after the mailing of such offer.
  Such offer shall be accompanied by a copy of this subsection and by  the
  most  current  available balance sheet of the company, which shall be as
  of a date not earlier than twelve months  before  the  mailing  of  such
  offer, and a profit and loss statement or statements for not less than a
  twelve  month  period  ended  on  the  date  of  such balance sheet. Any
  shareholder accepting such offer within the  thirty  day  period  shall,
  within  sixty  days  after  his  acceptance,  transfer  his  shares  and
  surrender the certificates representing such shares, to the company  and
  shall  thereupon  be  paid  the  offered price. All such shares shall be
  assigned to the trustees referred to in paragraph five of subsection (a)
  hereof and held by them as shares acquired pursuant to the plan.
    (3) Each shareholder who does not accept such  offer  to  acquire  his
  shares  within such thirty day period shall within thirty days after the
  expiration of such period apply to the supreme  court,  at  any  special
  term  thereof  held  in  the district in which is situated the county in
  which the company making the offer has its principal place of  business,
  upon at least eight days' notice to such company, for the appointment of
  three  disinterested  persons  to appraise the value of his shares as of
  the date of  making  such  offer,  and  the  court  shall  appoint  such
  appraisers and designate the time and place of their first meeting, with
  such  directions  in  respect  to  their  proceedings as shall be deemed
  proper. The court may fill any vacancies  in  the  board  of  appraisers
  occurring  by  refusal  to  hold  such  office  or neglect to act.   The
  appraisers shall meet at the time and place designated and, after  being
  duly  sworn,  shall  hear  the  parties, faithfully and fairly discharge
  their duties, estimate and certify in writing the  fair  value  of  such
  shares  as  of  the  date  of  the  offer,  and deliver one copy of such
  certificate to such company and another to each such shareholder. Within
  twenty days after such delivery any party to the  appraisal  proceedings
  may apply to the supreme court, at any such special term thereof upon at
  least   eight  days'  notice  to  all  the  parties  to  such  appraisal
  proceedings and to the superintendent, for approval of the report of the
  board of appraisers. The  court,  after  hearing  the  parties  and  the
  superintendent,  may  approve  the report and the value of the shares as
  stated therein, or may itself, upon the evidence and proceedings  before
  the appraisers, determine the fair value of the shares as of the date of
  such offer, or may refer the matter back to the same appraisers or other

  appraisers  to  be  so  appointed  by  the court, to proceed in the same
  manner. Whenever the court shall approve or determine the fair value  of
  such  shares,  it may also determine the terms of payment thereof by the
  company.   The charges and expenses of the appraisers, after approval by
  the court, shall be paid by the company. Upon any such  order  approving
  or  determining  the  value  of the shares and the method of the payment
  thereof becoming final and from which no appeal is pending, or when  the
  time  to  appeal  therefrom  has  expired, each shareholder party to the
  proceeding shall transfer his  shares  and  surrender  the  certificates
  representing  such  shares  to  the  company  and the company shall make
  payment therefor as provided in such order. Any shares  so  acquired  by
  the  company  shall be assigned and transferred to the trustees and held
  by them as shares acquired pursuant to the plan.
    (4) Any shareholder who does not make application to the court in  the
  manner and within the time prescribed in paragraph three hereof shall be
  deemed  to  have accepted the offer referred to in paragraph two hereof,
  effective, however, upon  the  expiration  of  the  time  prescribed  in
  paragraph   three  hereof  for  making  such  an  application  and  such
  shareholder's time for accepting such  offer  shall,  for  that  purpose
  only, be deemed to have been extended accordingly.
    (5)  Any  offer  to  acquire  shares  made pursuant to this subsection
  shall, except as otherwise provided in paragraphs two  and  four  hereof
  limiting  the  time  for acceptance at the offered price, be irrevocable
  until all proceedings upon such offer provided by this  subsection  have
  been completed or all shares have otherwise been earlier acquired by the
  company.
    (6)  Upon  application by the company or by any aggrieved shareholder,
  and upon at least eight days' notice  to  all  persons  to  be  affected
  thereby  and  to  the  superintendent, the supreme court, at any special
  term thereof held in the district in which is  situated  the  county  in
  which  the  company  has  its  principal place of business, may make any
  order appropriate in the  circumstances  to  implement  or  enforce  the
  provisions  of  this  subsection. If any proceeding in respect of any of
  the shares shall have been commenced pursuant to paragraph three hereof,
  all subsequent applications pursuant to this subsection shall be made or
  transferred to, and be heard and determined by, the court in which  such
  proceeding has been commenced.
    (c)  When  all  of  the  outstanding  shares  of the company have been
  acquired, they shall be retired and cancelled, and thereupon the company
  shall become a mutual life insurance company without shares.