The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 101 : Insurance Companies Generally

Subchapter 003 : Mergers, Consolidations, Conversions, Mutualizations, Bulk Reinsurance, Subsidiaries

• § 3424. Procedure for merger

  Any domestic insurer subject to the prohibitions of section 3422 of this title may merge with any other insurer in the following manner:

  (1) The board of directors of each insurer shall, by a resolution adopted by a majority vote of the members of such board, approve a joint agreement of merger setting forth:

  (A) The names of the insurers proposed to merge, and the name of the insurer into which they propose to merge, which is hereafter designated as the surviving company.

  (B) The terms and conditions of the proposed merger and the mode of carrying the same into effect.

  (C) The manner and basis of converting the shares of capital stock of stock insurers, if applicable, other than the surviving insurer into shares or other securities or obligations of the surviving insurer.

  (D) A restatement of such provisions of the articles of incorporation of the surviving insurer as may be deemed necessary or advisable to give effect to the proposed merger.

  (E) Such other provisions with respect to the proposed merger as are deemed necessary or desirable.

  (2) The resolution of the board of directors of each insurer approving the agreement shall direct that the agreement be submitted to a vote of the shareholders, members, or policyholders, as the case may be, of such insurer entitled to vote in respect thereof at a designated meeting thereof, which may be an annual meeting of shareholders, members, or policyholders entitled to vote in respect thereof. If the designated meeting of any insurer at which the agreement is to be submitted is an annual meeting, notice of the submission of the agreement shall be included in the notice of such annual meeting. If the designated meeting of any insurer at which the agreement is to be submitted is a special meeting of the shareholders, members, or policyholders, entitled to vote in respect thereof, such special meeting shall be called by the resolution designating the meeting, and notice of such meeting shall be given as provided in the bylaws or charter, as the case may be, of each insurer.

  (3) The agreement of merger so approved shall be submitted to a vote of the shareholders, members, or policyholders, as the case may be, of each insurer entitled to vote in respect thereof at the meeting directed by the resolution of the board of directors of such company approving the agreement, and the agreement shall be adopted by such insurer upon receiving the affirmative vote of such proportion of the shareholders, members or policyholders as provided in section 3427 of this title.

  (4) Following the adoption of the agreement by any insurer, the clerk or secretary thereof, within such time and in such manner as shall be approved by the Commissioner, shall give notice of the adoption of the agreement to each shareholder, member, or policyholder, as the case may be, of record of such insurer entitled to vote who was not present in person or represented by proxy at the meeting at which the agreement was adopted. The insurer shall file an affidavit with the Commissioner, signed by the clerk or secretary of such insurer, that such notice was given.

  (5) Any shareholder, member, or policyholder, as the case may be, of any such insurer, who did not vote in favor of the adoption of the agreement of merger, may object to such merger in the manner and with the effect provided in sections 3428 and 3429 of this title.

  (6) As soon as practicable after the expiration of a period of 30 days after the adoption of the agreement of merger by the shareholders, members, or policyholders, as the case may be, of that one of the merging insurers which is the last, in point of time, to adopt the same, the agreement shall again be considered by the board of directors of each insurer a party thereto, at a regular or special meeting of such board, and if the board of directors of each such insurer, by a majority vote of the members of such board, shall again approve the agreement and shall authorize the execution thereof, the agreement shall be signed on behalf of each such insurer by its president or a vice president and its clerk or secretary or an assistant clerk or secretary and shall have the corporate seal of each such insurer thereto affixed.

  (7) Articles of merger shall be adopted in the following manner:

  (A) Upon the execution of the agreement of merger by all of the insurers parties thereto, there shall be executed and filed, in the manner hereafter provided, articles of merger setting forth the agreement of merger, the signatures of the several insurers parties thereto, the manner of its adoption and the vote by which adopted by each of such insurers.

  (B) The articles of merger shall be signed on behalf of each insurer by its president or a vice president and its clerk or secretary or an assistant clerk or secretary, and acknowledged before a notary public by the officers signing the same, in such multiple copies as shall be required to enable the insurers to comply with the provisions of this subchapter with respect to filing and recording the articles of merger, and shall then be presented to the Commissioner.

  (C) The Commissioner shall approve the articles of merger if he or she finds that the merger will promote the general good of the State in conformity with those standards set forth in section 3305 of this title. If he or she approves the articles of merger, he or she shall indorse his or her approval thereon and shall present the same to the Secretary of State of the State of Vermont at his or her office.

  (8) Upon the presentation of the articles of merger, the Secretary of State, if he or she finds that they conform to law, shall indorse his or her approval on each of the multiple copies of the articles, and, when all fees have been paid as required by law, shall file one copy of the articles of merger in his or her office and issue a certificate of merger, and shall return the remaining copies of the articles bearing the indorsement of his or her approval, together with the certificate of merger, to the surviving insurer, or its representatives.

  (9) The surviving insurer shall obtain a certified copy of the certificate of merger from the Secretary of State and file the same with the Commissioner, accompanied by a copy of the articles of merger bearing the indorsement and approval of the Secretary of State. (Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 1, subch. 4, § 3).)