§237.6. Approval by commissioner after public hearing

            A. The commissioner shall hold a public hearing upon notice as set forth in this Section to hear evidence upon whether the plan of reorganization properly protects the interests of the policyholders as such and as members, serves the best interests of policyholders and members, and is fair and equitable to policyholders and members. The provisions of Subpart G-1 of Part III of this Chapter, R.S. 22:691.1 et seq., shall not be applicable to any hearing held pursuant to this Subpart, and any such hearing shall be governed by the procedures set forth in this Subpart.

            B.(1) Within thirty days after the closing of the administrative record after the public hearing as provided in this Section, the commissioner shall issue a final order or decision approving the plan if satisfied that each of the following conditions are met:

            (a) The interests of the policyholders as such and as members are properly protected.

            (b) The plan of reorganization serves the best interests of policyholders and members.

            (c) The plan of reorganization is fair and equitable to policyholders and members.

            (2) Any such final decision or order by the commissioner shall be subject to any modifications of the plan of reorganization the commissioner finds necessary for the protection of the policyholders and members.

            C. Subject to the review and appeal process under Subsection E of this Section, the commissioner's public hearing shall be the exclusive hearing with respect to the plan of reorganization. Not less than thirty days notice of such public hearing shall be provided by the reorganizing mutual to qualified voters and to such additional persons and in such manner as may be specified by the commissioner. The commissioner may promulgate procedures, rules, and regulations for the conduct of the public hearing.

            D.(1) The commissioner may retain at the reorganizing mutual's expense such attorneys, actuaries, accountants, and other experts as may be reasonably necessary to assist the commissioner in his examination of a proposed conversion, including any part of such examination that may occur, at the request of a reorganizing mutual, prior to a plan of reorganization having been filed with the commissioner pursuant to R.S. 22:237.4. Such experts shall prepare a projection of the amount of time and expenses necessary to complete the examination, and all work of these experts is subject to review. If the projected amount of time and expenses required to complete the examination appear excessive, the reorganizing mutual may petition the commissioner for appropriate relief, and the commissioner's decision shall be final.

            (2)(a) If the reorganizing mutual's plan of reorganization is required to include a disclosure of proposed acquisition pursuant to R.S. 22:237.4(B)(5), the commissioner shall conduct financial and market analysis reviews of the terms, conditions, and price of the proposed acquisition. The financial and market analysis reviews shall include an independent valuation of the reorganizing mutual, conducted by an independent valuation expert with experience valuing similar companies and transactions, as well as a review of the financial and operational viability of the entity proposing to acquire the reorganizing mutual. The commissioner shall conduct the reviews and publish the findings on the department's website prior to the date of the public hearing required by Subsection A of this Section.

            (b) The reorganizing mutual shall publish the commissioner's reviews and findings on the reorganizing mutual's website with the notice of public hearing required by Subsection C of this Section.

            (c) The provisions of this Paragraph do not apply to any reorganizing mutual with less than ten thousand individual or group health insurance policies issued to Louisiana residents. For purposes of this Subparagraph, the number of policies shall be the number reported by the reorganizing mutual in the National Association of Insurance Commissioners' Market Conduct Annual Statement under the Health section, excluding the Other Health section, for the most recent year preceding the submission of the demutualization application to the department.

            E.(1) An aggrieved party may appeal the commissioner's final order to the Nineteenth Judicial District Court within thirty days of the order. The aggrieved party may also apply for a stay of the commissioner's order.

            (2) The district court reviewing an order of the commissioner shall consider only the certified administrative record and the issues raised before the commissioner. The district court reviewing an order of the commissioner shall not modify or set aside the order unless the court finds: (a) error to the prejudice of the appellant's substantial rights arising from the commissioner's application of the law so grossly as necessarily to imply bad faith; (b) the commissioner's order or decision was procured by fraud; (c) the commissioner acted outside of the statutory authority of the Department of Insurance; or (d) the commissioner's action was arbitrary and capricious. Any appeal of the district court's review of the commissioner's order shall be taken within thirty days of the judgment of the district court; if no appeal is taken, the right to have an appellate court review or restrain action under the commissioner's order or decision shall be preempted and shall forever expire. Collateral attacks on an order of the commissioner are impermissible and shall be dismissed by the reviewing court.

            (3) In any action challenging the validity of or arising out of any action taken or proposed to be taken under this Subpart, the reorganizing mutual or reorganized company shall be entitled at any stage of the proceedings before final judgment to petition the court to require the plaintiff or plaintiffs to give security for the reasonable costs, including attorney fees, which may be incurred by the reorganizing mutual or reorganized company, to which security the reorganizing mutual or reorganized company shall have recourse in such amount as the court having jurisdiction of such action shall determine upon termination of such action. The amount of security may thereafter from time to time be increased or decreased in the discretion of the court having jurisdiction of such action upon a showing that the security provided has or may become inadequate or excessive. If the court renders judgment in favor of the reorganizing mutual or reorganized company, the court may in its discretion award attorney fees and costs to such prevailing party.

            F. The provisions of this Section shall apply to all actions challenging the validity of or arising out of any action taken or proposed to be taken under this Subpart and R.S. 22:71 and 72.

            Acts 2009, No. 234, §1; Acts 2022, No. 161, §1; Acts 2024, No. 149, §1, eff. May 22, 2024.