The bill establishes a framework for the reorganization of domestic mutual insurers in Washington, allowing them to convert into domestic stock insurers under a mutual holding company structure. It introduces new definitions such as "converting mutual insurer," "converted stock insurer," and "mutual holding company," which clarify the roles and processes involved in these conversions. The bill requires the board of directors of a converting mutual insurer to pass a resolution affirming the fairness of the reorganization to policyholders and outlines the steps for filing plans with the commissioner, obtaining member approval, and protecting policyholder rights throughout the process.

Additionally, the bill amends RCW 48.09.350 to facilitate the conversion of domestic mutual insurers into stock corporations while ensuring fair compensation for members. It specifies that mutual holding companies are not classified as insurers under certain provisions but remain subject to specific regulations. The bill allows for the concurrent reorganization of multiple mutual insurers into a single mutual holding company and provides a pathway for foreign mutual insurers to merge their membership interests into a domestic mutual holding company. The approval process for reorganization plans requires a two-thirds majority vote from members, and upon conversion, the mutual insurer will become a converted stock insurer, extinguishing all membership interests and transferring members to the mutual holding company.

Statutes affected:
Substitute Bill: 48.09.350