§232.4. Capital stock of a reorganized insurance company

            A.(1) A mutual insurance holding company established pursuant to R.S. 22:231 shall at all times own a majority of the voting shares of the capital stock of insurance companies reorganized under R.S. 22:231.

            (2) As used in this Section, "majority of the voting shares of the capital stock" means shares of the capital stock of the reorganized insurance company which carry the right to cast a majority of the votes entitled to be cast by all of the outstanding shares of the capital stock of the reorganized insurance company for the election of directors and on all other matters submitted to a vote of the shareholders of the reorganized insurance company.

            (3) Ownership of a majority of the voting shares of the capital stock of the reorganized insurance company, which are required by this Section to be at all times owned by a parent mutual insurance holding company, includes indirect ownership through an intermediate holding company in a corporate structure approved by the commissioner. However, indirect ownership through an intermediate holding company shall not result in the mutual insurance holding company owning less than the equivalent of a majority of the voting shares of the capital stock of the reorganized insurance company.

            B. In addition to the limitations on dividends set forth in the Insurance Holding Company System Regulatory Law, R.S. 22:691.1 et seq., any dividends paid by an insurance company reorganized pursuant to R.S. 22:231 shall be paid to the shareholders of record in an equal amount with respect to each issued and outstanding share, regardless of the classes of stock issued by the insurance company.

            C. The majority of the voting shares of the capital stock of an insurance company reorganized under R.S. 22:231 shall not be conveyed, transferred, assigned, pledged, subjected to a security interest or lien, encumbered, or otherwise hypothecated or alienated by the mutual insurance holding company or intermediate holding company. Any conveyance, transfer, assignment, pledge, security interest, lien, encumbrance, or hypothecation or alienation of, in or on the majority of the voting shares of the reorganized insurance company which is required by this Section to be at all times owned by a mutual insurance holding company, is in violation of this Section and shall be void in inverse chronological order of the date of such conveyance, transfer, assignment, pledge, security interest, lien, encumbrance, or hypothecation or alienation, as to the shares necessary to constitute a majority of such voting shares. The majority of the voting shares of the capital stock of the reorganized insurance company which is required by this Section to be at all times owned by a mutual insurance holding company shall not be subject to execution and levy as provided in Book IV, Execution of Judgments, and Book V, Summary and Executory Proceedings, of the Louisiana Code of Civil Procedure.

            D. The shares of the capital stock of the surviving or new company resulting from a merger or consolidation of two or more reorganized insurance companies or two or more intermediate holding companies which were subsidiaries of the same mutual insurance holding company are subject to the same requirements, restrictions, and limitations as provided in this Section to which the shares of the merging or consolidating reorganized insurance companies or intermediate holding companies were subject by this Section prior to the merger or consolidation.

            Acts 1997, No. 1482, §1; Redesignated from R.S. 22:1004.4 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Redesignated from R.S. 22:698 by Acts 2012, No. 294, §3; Acts 2022, No. 161, §1.