A. A hospital service and medical indemnity corporation, as provided for in Article 26 of the Insurance Code, may be converted to a domestic mutual insurer as provided for in Article 21 of the Insurance Code under such plan and procedure as shall be approved by the order of the Insurance Commissioner.

B. The Commissioner shall approve any such plan or procedure if he finds:

1. That the plan would not be contrary to the interests of the subscribers or contract holders or to the public;

2. That the plan has been approved by the corporation in accordance with its articles of incorporation and bylaws;

3. Upon conversion, the corporation shall have the minimum surplus required of mutual insurers organized pursuant to Article 21 of the Insurance Code;

4. Upon completion of conversion to a mutual insurer as provided for in this section, such corporation shall be subject to and comply with all laws and regulations applicable to a mutual insurer organized pursuant to Article 21 of the Insurance Code;

5. The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective; and

6. The plan provides for the protection of all existing contractual rights of subscribers or contract holders for medical and hospital service or care or claims for reimbursement therefor, and for the mutual insurer organized pursuant to Article 21 of the Insurance Code to assume, without reincorporation, all assets and liabilities of the corporation.

C. The corporation organized pursuant to Article 26 of the Insurance Code shall have such period of time as shall be specified in the order of the Commissioner to complete its conversion to a mutual insurer organized pursuant to Article 21 of the Insurance Code.

Added by Laws 1988, c. 227, § 14, emerg. eff. June 20, 1988.