Protection Against Minority Stockholder Obstruction
- The amendment addresses the issue where a small number of dissenting stockholders could block mutualization desired by the majority.
- It provides a mechanism to acquire remaining shares after at least 90% have been acquired by trustees under the mutualization plan.
Acquisition Offer Procedure
- If 90% of outstanding shares are acquired, the insurer's board may offer to purchase the remaining shares at a "fair value".
- This offer requires Commissioner of Insurance permission, who may impose conditions.
- The offer is made by registered mail to each shareholder not yet acquired and is valid for 30 days for acceptance.
- Accepted offers require transfer of share certificates within 60 days and payment by the insurer.
- Acquired shares are transferred to trustees and held under the plan.
Fair Value Determination for Non-Accepting Shareholders
- Shareholders rejecting the offer may apply to the Secretary of Finance within 15 days after the offer expiration to determine fair value.
- The Secretary may decide the value personally or appoint three impartial appraisers.
- Appraisers submit a written report with their findings; parties can object or approve within 10 days.
- After hearing, the Secretary issues a final order setting share value and payment terms; this act has the force of a judgment.
Costs and Finality of Proceedings
- Costs of appraisal proceedings are shared equally between insurer and shareholder.
- The Secretary's factual findings are conclusive; legal questions may be appealed.
- The order becomes final and executory 15 days after receipt if not appealed.
Mandatory Transfer and Payment
- Once the order is final, shareholders must transfer shares and surrender certificates, receiving payment as ordered.
- Shares acquired are transferred to trustees and held under the plan.
Effect of Failure to Apply for Valuation
- Shareholders not applying for fair value determination are deemed to have accepted the offer.
- This extends the acceptance period for such shareholders accordingly.
Enforcement and Irrevocability of Offers
- Offers made under this section are irrevocable until all proceedings are completed or shares acquired.
- Shareholders who refuse to surrender certificates after payment can be compelled by order of the Secretary of Finance.
- Such order can substitute for actual certificate surrender and cancellation.
Repeal and Effectivity
- All inconsistent laws, decrees, and regulations are repealed or modified accordingly.
- The decree takes effect immediately upon issuance.