Redomestication of Mutual Insurers Law and Legal Definition
Redomestication of mutual insurers refers to a method adopted by a mutual insurance company in a state which expressly establishes reasonable terms and conditions for a mutual insurance company domiciled in such state to reorganize into a mutual holding company. Under redomestication of mutual insurers, a mutual insurer organized under the laws of any state may transfer its domicile to a transferee domicile as a step in reorganization. Redomestication of mutual insurers makes a mutual insurer as a stock insurer that is a direct or indirect subsidiary of a mutual holding company. However, all outstanding insurance policies and annuities contracts of a redomesticated insurer remain in full force and need not be endorsed as to the new domicile of the insurer.[15 USCS § 6732].
In addition, redomesticating insurer will be exempted from any state law of the licensed state upon following conditions:
1.Compliance with the unfair claim settlement practices law of the licensed state;
2.Payment on a nondiscriminatory basis, applicable premium and other taxes which are levied on licensed insurers or policyholders under the laws of the licensed state;
3.Registration with and designating the State insurance regulator as its agent solely for the purpose of receiving service of legal documents or process.