AN ACT relating to insurance.
     Create a new section of Subtitle 37 of KRS Chapter 304 to define "interested person", "intermediate holding company", "Majority of the voting share of the capital stock of the reorganized insurance company", "mutual insurance holding company", "plan of reorganization", and "stock offering"; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that a domestic mutual insurance company, with the commissioner's approval may reorganize by forming an insurance holding company after a public hearing before the commissioner who may require a plan of reorganization, to establish that all of the initial shares of the capital stock of the reorganized company be issued to the mutual holding company, that membership interest of policyholders of a reorganized company be transferred to membership interest in the mutual, that the mutual own a majority of the voting shares of the capital stock of the reorganized company, and to establish the process of reorganization of a domestic mutual insurance company by merger; create a new section of Subtitle 37 of KRS Chapter 304 to establish that a foreign mutual insurance company or a foreign nonprofit health service corporation may reorganize upon the approval of the commissioner and in compliance with the law by merging its policyholders' or subscribers' membership interest into a mutual insurance holding company and continuing the corporate existence of the reorganized foreign mutual insurance company or reorganizing foreign health service corporation as a foreign stock company subsidiary of the mutual, to require a public hearing, and to allow redomestication; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that a mutual holding company resulting from the reorganization of a domestic mutual is to be incorporated under KRS Chapter 271 B, with articles of incorporation or amended articles subject to approval of the commissioner and the Attorney General; create a new section of Subtitle 37 of KRS Chapter 304 to establish that a mutual insurance holding company is deemed to be an insurer subject to Subtitle 33 of KRS Chapter 304 and will automatically be a party to any proceeding thereunder, to set forth that assets of the mutual are deemed to be assets of the estate of the reorganized company for the purpose of satisfying claims of policyholders, and to prohibit a mutual from dissolving or liquidating without the approval of the commissioner; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that KRS 304.24-380 does not apply to reorganization or merger and that KRS 304.24-380 does apply to demutualization of a mutual insurance holding company; create a new section of Subtitle 37 of KRS Chapter 304 to establish that a membership interest in a domestic mutual insurance holding company does not constitute a security; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that the majority of the voting share of the capital stock of the reorganized company are not transferable, assignable, pledgable or able to be a security interest or lien or encumbered, and to establish that any conveyance in the majority of the voting share of the capital stock of the reorganized company will be deemed void in inverse chronological order of the date of the conveyance; create a new section of Subtitle 37 of KRS Chapter 304 to require that each mutual file an annual statement with the department by March 1, with specific information, to establish that the aggregate pledges and encumbrances of a mutual's assets should not affect more than 49% of the company's stock, and that at least 50% of the net worth is to be invested in insurance company subsidiaries; create a new section of Subtitle 37 of KRS Chapter 304 to prohibit a policyholder who is a member of a mutual insurance holding company from receiving payment of a policy credit, dividend or other distribution unless the payment has been approved by the commissioner after a public hearing; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that a reorganization or merger insurer must file with the commissioner an application with certain specific information; create a new section of Subtitle 37 of KRS Chapter 304 to set forth that a reorganizing or merging insurer must file with the commissioner a plan of reorganization with certain specific information; create a new section of Subtitle 37 of KRS Chapter 304 to establish hearing, and notice requirements, to allow the commissioner to retain experts for assistance, to require the commissioner to submit applications and plans to the Attorney General for examination, written findings, recommendations, such examination findings to be filed no later than 5 days prior to a public hearing and to be part of the record at hearing, to establish that the commissioner will have jurisdiction over mutuals and subsidiaries of mutuals, to establish that the commissioner has the discretion to extend the time for reorganization completion or may revoke approval, and to require notice to commissioner of completion of plan, and within 12 months of notice commissioner to examine the mutual for compliance with the plan; create a new section of Subtitle 37 of KRS Chapter 304 to prohibit stock offering by a mutual without prior approval of the commissioner through an application and hearing process, to establish the information to be included in every application for approval of a stock offering, to establish the provisions required in every application for approval of a planned stock offering, to allow more than 1 class of stock to be offered and that no class of common stock may possess greater dividend or other rights, to allow the commissioner to hire experts to assist in application review, to allow the commissioner to hold a public hearing regarding any application for approval of a stock offering, and to clarify that the filing of a registration statement with the Securities and Exchange Commissioner prior to or concurrently with the giving of notice to members will not be inhibited; create a new section of Subtitle 37 of KRS Chapter 304 to prohibit borrowing of funds to finance the purchase of any portion of a stock offering, to pay commissions or fee, and to prohibit entering into an agreement to transfer stock to another to avoid certain rules; create a new section of Subtitle 37 of KRS Chapter 304 to prohibit officers, directors, or insiders from owning more than 18% in the aggregate of the voting stock, to limit not interested directors from owing in the aggregate more than 3% of the voting stock, and to prohibit a person from directly or indirectly offering to acquire beneficial ownership of more than 15% of any class of voting securities.

     Mar 2-introduced in House
     Mar 3-to Banking and Insurance (H)
     Mar 4-posted in committee
     Mar 12-reported favorably, 1st reading, to Calendar with Committee Substitute
     Mar 13-2nd reading, to Rules; recommitted to Appropriations and Revenue (H)
     Mar 16-taken from Committee, placed in the Orders of the Day
     Mar 17-3rd reading, passed 86-0 with Committee Substitute
     Mar 18-received in Senate; to Banking and Insurance (S)
     Mar 19-reported favorably, 1st reading, to Consent Calendar with committee amendment (1)
     Mar 20-2nd reading, to Rules
     Mar 23-posted for passage in the Consent Orders of the Day for March 25, 1998
     Mar 24-floor amendment (2) filed
     Mar 25-taken from the Consent Orders of the Day, placed in the Regular Orders of the Day
     Mar 26-3rd reading, passed 27-5-2 with committee amendment (1) and floor amendment (2)
     Mar 27-received in House; posted for passage for concurrence in Senate amendments
     Mar 31-House concurred in Senate committee amendment (1) and Senate floor amendment (2); passed 89-0
     Apr 1-enrolled, signed by each presiding officer, delivered to Governor
     Apr 13-signed by Governor