1. A stock insurer other than a title insurer may become a mutual insurer under such plan and procedure as may be approved by the Commissioner after a hearing thereon.

2. The Commissioner shall not approve any such plan, procedure or mutualization unless:

(a) It is equitable to stockholders and policyholders;

(b) It is subject to approval by the holders of not less than two-thirds of the insurer’s outstanding capital stock having voting rights, and by not less than two-thirds of the insurer’s policyholders who vote on the plan in person, by proxy or by mail pursuant to such notice and procedure as may be approved by the Commissioner;

(c) If a life insurer, the right to vote thereon is limited to holders of policies other than term or group policies, whose policies have been in force for more than 1 year;

(d) Mutualization will result in retirement of shares of the insurer’s capital stock at a price not in excess of the fair market value thereof as determined under a fair and reasonable formula approved by the Commissioner or, if so ordered, by an examination of the insurer and all of its controlled affiliates or by an appraisal committee, consisting of at least three qualified persons, to be appointed by the Commissioner;

(e) The plan provides for the purchase of the shares of any nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by the general corporation law of the state as to rights of nonconsenting stockholders, with respect to consolidation or merger of private corporations;

(f) The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will become effective; and

(g) The mutualization leaves the insurer with a surplus reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the states in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificates of authority in such states.

3. No director, officer, agent or employee of the insurer, or any other person, may receive any fee, commission or other valuable consideration whatsoever, other than his or her customary salary or other regular compensation, for in any manner aiding, promoting or assisting in the mutualization, except as set forth in the plan of mutualization as approved by the Commissioner.

4. This section does not apply to mutualization under an order of court pursuant to rehabilitation or reorganization of an insurer under chapter 696B of NRS.

(Added to NRS by 1971, 1809; A 2001, 2247)