P.R. Laws tit. 26, § 2943
(1) A domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as are approved by the Commissioner in advance of such mutualization.
(2) The Commissioner shall not approve any such plan, procedure, or mutualization unless:
(a) It is equitable to both shareholders and policyholders.
(b) It is approved by a vote of the holders of not less than three-fourths of the insurer’s outstanding capital stock (whether or not nominally having voting rights), and by a vote of not less than two-thirds of the insurer’s policyholders who vote on such plan, pursuant to such notice and procedure as may be approved by the Commissioner. Such vote may be in person, by mail, or by proxy.
(c) If a life insurer, the right to vote thereon is limited to those whose policies have face amounts of not less than five hundred dollars ($500) and have been in force one (1) year or more.
(d) Mutualization will result in retirement of shares of the insurer’s capital stock at a price not in excess of its fair market value as determined by competent disinterested appraisers.
(e) The plan requires that non-consenting shareholders deposit their shares by a date specified therein for redemption at the same price as is set for shares in general. All rights of any such stockholder shall terminate upon expiration of such date, save only the right to receive in cash the said price for his shares when surrendered for the purpose.
(f) The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization shall be deemed effective.
(g) The mutualization leaves the insurer with surplus funds reasonably adequate to preserve the security of its policyholders and its ability to continue successfully in business in the jurisdictions in which it is to be authorized, and in the kinds of insurance it is then authorized to transact.
(3) This section shall not apply to a mutualization under orders of court pursuant to rehabilitation or reorganization of an insurer under §§ 4001–4024 of this title.
History —Ins. Code § 29.430.