First, we improve on the existing literature by considering the method of conversion in an effort to gain additional insight into what motivated insurers to demutualize
generally and then to explore if the motivations were similar across the firms that chose to fully demutualize
versus those that chose to adopt the MHC form.
Economical's mutual policyholders are the owners of the Company, as determined by law, the Company's by-laws and by the precedent of the mutual life companies which were allowed to demutualize
in the 1990s.
The National Office also rejected the argument that the payment constituted a charge for the right to demutualize
and thus provided the taxpayer with significant long-term benefits in keeping with INDOPCO, Inc.
Any company planning to demutualize
must submit a conversion plan to its state insurance commissioner for approval, and its policyholders must vote for demutualization by either a 2/3 or 3/4 margin, depending on the state.
If we apply a relative standard to examine the question of whether policyholders of insurers that demutualize
are harmed by underpricing, then the answer becomes "not necessarily.
Apparently, insurers may intend to demutualize
to increase surplus or equity through issuing stock, but their rate of return or financial condition does not improve after conversion.
In addition, he said there will be less push among personal lines companies to demutualize
because their capital needs are smaller than those of their commercial lines counterparts.
16 /PRNewswire/ -- The Pacific Exchange (PCX) announced today that its Board of Governors unanimously approved plans to demutualize
and convert the not-for-profit membership organization into a for-profit shareholder-owned corporation.
In a sponsored demutualization, a mutual company opts to demutualize
as part of a decision to be acquired, most typically by a stock company.
The Board of Directors of Security Mutual has agreed to adopt a plan of reorganization under which the company will demutualize
in order to convert from a mutual insurance company to a stock company and become a wholly owned subsidiary of The Ohio National Life Insurance Company.
but the latter two companies first must demutualize
, converting themselves into stock companies.
Daido Life is the first company to demutualize
and become a listed company in the Japanese life sector.