2011 ORS § 732.620¹
Status of mutual holding company as corporation
- • status as insurer
- • rights and obligations of members
- • voting
- • articles of incorporation
(1) A mutual holding company is a corporation. To the extent not inconsistent with the provisions of the Insurance Code or ORS 732.600 (Definitions for ORS 732.600 to 732.630) to 732.630 (Dissenters rights), ORS chapter 60 governs the powers, duties and relationships of a mutual holding company. The following sections in ORS chapter 60 do not apply to a mutual holding company: ORS 60.004 (Filing requirements), 60.007 (Filing, service, copying and certification fees) to 60.014 (Correcting filed document), 60.016 (Forms), 60.017 (Filing duty of Secretary of State) to 60.024 (Evidentiary effect of copy of filed document), 60.027 (Certificate of existence or authorization), 60.031 (Powers), 60.051 (Incorporation) to 60.057 (Organization of corporation), 60.131 (Authorized shares) to 60.147 (Issuance of shares), 60.154 (Share dividends) to 60.177 (Corporations acquisition of its own shares), 60.224 (Shareholders list for meeting), 60.227 (Voting entitlement of shares), 60.234 (Shares held by nominees), 60.241 (Quorum and voting requirements for voting groups) to 60.265 (Validity of shareholder agreements inconsistent with chapter), 60.470 (Definitions for ORS 60.470 to 60.501) to 60.534 (Sale of assets other than in regular course of business), 60.551 (Definitions for ORS 60.551 to 60.594) to 60.594 (Court costs and counsel fees), 60.701 (Authority to transact business required) to 60.747 (Reinstatement of authority), 60.787 (Annual report), 60.801 (Definitions for ORS 60.801 to 60.816) to 60.816 (Short title) and 60.825 (Definitions for ORS 60.825 to 60.845) to 60.845 (Greater vote of shareholders prohibited). The enumeration in this subsection of inapplicable sections in ORS chapter 60 is not exclusive.
(2) In applying ORS chapter 60 as provided in this section, unless the context requires otherwise, references to:
(a) Corporation shall be deemed references to mutual holding company.
(b) Shareholders shall be deemed references to members.
(c) Secretary of State shall be deemed references to Director of the Department of Consumer and Business Services.
(3) A mutual holding company is not an insurer for purposes of the Insurance Code. However, in the event a mutual holding company engages in an activity described in ORS 732.521 (Activities that are prohibited unless specified procedures followed), then ORS 732.517 (Purpose of ORS 732.517 to 732.546) to 732.546 (Severability) shall apply to the mutual holding company and the effect of such activity shall be governed by ORS 732.517 (Purpose of ORS 732.517 to 732.546) to 732.546 (Severability). A mutual holding company may merge with another corporation in accordance with a plan of restructuring described in ORS 732.622 (Restructuring of mutual holding company) and 732.624 (Approval by Director of Department of Consumer and Business Services of mutual holding company restructuring plan).
(4) A mutual holding company shall not dissolve or liquidate without approval by the director or unless required by judicial order. The director retains jurisdiction over a mutual holding company, any intermediate stock holding company and any subsidiary of an intermediate stock holding company as provided in this section and as provided in ORS 732.517 (Purpose of ORS 732.517 to 732.546) to 732.592 (Recovery from parent corporation or holding company if domestic insurer ordered into liquidation or rehabilitation).
(5) The members of a mutual holding company have the rights and obligations set forth in this section and in the articles of incorporation and bylaws of the mutual holding company. No member of a mutual holding company may transfer membership in the mutual holding company or any right arising from such membership. Such limitation on the transfer of membership or rights arising from membership shall not restrict the assignment of a policy that is otherwise permissible. A member of a mutual holding company is not personally liable for the acts, debts, liabilities or obligations of the mutual holding company merely by reason of being a member. No assessment of any kind may be imposed upon a member of a mutual holding company.
(6) A membership interest in a mutual holding company shall not constitute a security as defined in ORS 59.015 (Definitions for Oregon Securities Law).
(7) Each member of a mutual holding company is entitled to one vote on each matter coming before a meeting of the members and for each director to be elected regardless of the number of policies or amount of insurance and benefits held by such member. The voting rights of the members of a mutual holding company shall be determined in accordance with ORS 732.470 (Voting rights of members of mutual insurer).
(8) Meetings of the members of a mutual holding company shall be governed by ORS 732.475 (Members meetings and procedures of domestic mutual and reciprocal insurers) in the same manner as if the mutual holding company were a domestic mutual insurer, except for provisions governing quorum requirements, the approval of matters by the members and the election of directors by the members. The members present in person or represented by proxy shall constitute a quorum at a duly called meeting of the members. If a quorum exists, action on a matter, other than the election of directors, is approved by the members if the votes cast in favor of the action exceed the votes cast opposing the action, unless the articles of incorporation require a greater number of affirmative votes. Unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the members entitled to vote in the election at a meeting at which a quorum exists.
(9) The articles of incorporation of a mutual holding company must contain the following provisions:
(a) The name of the mutual holding company. The name must include the words mutual holding company or mutual insurance holding company or other words connoting the mutual character of the mutual holding company that are approved by the director.
(b) A provision specifying that the mutual holding company is not authorized to issue capital stock, whether voting or nonvoting.
(c) A provision setting forth any rights of the members of the mutual holding company upon dissolution or liquidation.
(10) A mutual holding company shall automatically be a party to any rehabilitation or liquidation proceeding involving the converted stock insurer that as a result of a reorganization is a direct or indirect subsidiary of the mutual holding company. In such a proceeding, the assets of the mutual holding company shall be counted as assets of the estate of the converted stock insurer for the purpose of satisfying the claims of the policyholders of the converted stock insurer. [1997 c.771 §10]