HB 1313 Summary

• Creates chapter 26.1-12.2 establishing a comprehensive framework for converting mutual property and casualty insurance companies to stock insurance companies in North Dakota.

• Requires converting mutual companies to obtain two-thirds governing body approval, prepare independent valuations, and secure member approval through voting before conversion becomes effective.

• Grants eligible policyholders nontransferable subscription rights to purchase 100% of converted company stock at a fair price, with minimum subscription amounts not exceeding $500 and minimum share purchases of 25 shares.

• Prohibits company directors and officers from acquiring converted company stock for three years post-conversion (except through broker-dealers or employee benefit plans) and restricts all stock repurchases for two years without commissioner approval.

• Repeals the prior demutualization statute (section 26.1-12-32) and amends related references to reflect the new conversion procedures.