Converting assessable mutual insurer.

(1) An assessable mutual insurer may become a stock insurer by filing an application which complies with s. 628.051 and by submitting a plan of conversion which is approved by the office. The office shall not approve any such plan unless the plan:

(a) Is equitable to the insurer’s members.

(b) Is subject to approval by vote of not less than two-thirds of the insurer’s current members voting thereon in person, by proxy, or by mail at a meeting of members called for the purpose pursuant to such reasonable notice and procedure as may be approved by the office. In no event shall the failure to vote constitute a vote for approval.

(c) Provides for the determination of the membership interests of each policyholder in the insurer, taking into account the relative corporate equity of the policyholder, other than as to unearned premiums and benefit claims under the policy, under a fair formula approved by the office.

(d) Provides for the payment of consideration to each policyholder in return for his or her membership interests in the assessable mutual insurer.

(e) Provides for the payment of consideration to be given in exchange for the policyholders’ membership interests in cash, securities of the reorganized insurer, securities of another company, surplus notes or other evidence of borrowed surplus, additional insurance, premium credits, additional benefits, increased dividends, cancellation of future assessment obligations, or other consideration or any combination of any such forms of consideration.

(f) Provides that persons who had been policyholders of the insurer within 3 years prior to the date such plan was submitted to the office shall participate in the distribution of consideration to policyholders.

When the plan of reorganization becomes effective, the assessable mutual insurer shall become a stock insurer and the stock insurer shall be deemed to be a continuation of the corporate existence of the assessable mutual insurer. The provisions of s. 628.441 do not apply to the conversion of an assessable mutual insurer into a stock insurer. The provisions of s. 628.441 shall not apply to the conversion of an assessable mutual insurer to a stock insurer.

(2) An assessable mutual insurer may become a nonassessable mutual pursuant to s. 628.341 if the assessable mutual insurer’s ratio of actual annual written premiums, as adjusted in accordance with subsection (3), to current surplus as to policyholders does not exceed 10 to 1 for gross written premiums and does not exceed 4 to 1 for net written premiums.

(3) For the purposes of this section, premiums shall be calculated as the product of the actual or projected premiums and the following:

(a) For property insurance, 0.90.

(b) For casualty insurance, 1.25.

(c) For health insurance, 0.80.

(d) For all other kinds of insurance, 1.00.

(4) An assessable mutual insurer becoming a stock insurer or a nonassessable mutual insurer is not subject to s. 627.215 or s. 627.351(5) for 5 years following authorization of the conversion by the office. However, the converted stock insurer or nonassessable mutual insurer must file all necessary data required by s. 627.215. Such amounts otherwise subject to s. 627.215(8) must be maintained as surplus as to policyholders and are not available for dividends for 5 years.

(5) Neither the Florida Insurance Guaranty Association nor the Florida Life and Health Insurance Guaranty Association shall be liable for any liability of an assessable mutual insurer except for claims incurred on policies issued on or after the date on which the assessable mutual insurer became a stock insurer or a nonassessable mutual insurer.