HB 7025 - Summary

• Allows domestic insurers to divide into two or more resulting insurers through a plan of division that allocates assets, liabilities, and policies between the new entities, effective October 1, 2017.

• Requires division plans to include detailed allocation of property, policies, and liabilities; public organic documents for new insurers; and methods for distributing interests to shareholders or interest holders.

• Mandates Insurance Commissioner approval of division plans after reasonable notice and public hearing, with authority to reject divisions that inadequately protect policyholders or constitute fraudulent transfers.

• Makes resulting insurers jointly and severally liable for undivided liabilities of the original insurer and establishes succession rights, with property vesting directly in new insurers without transfer or reversion.

• Grants shareholders appraisal rights in divisions comparable to merger rights under existing law, and permits formation of temporary domestic insurers solely for purposes of merging with dividing insurers.