(215 ILCS 5/Art. X heading)
MERGER, CONSOLIDATION OR PLANS OF EXCHANGE
(215 ILCS 5/156) (from Ch. 73, par. 768)
Sec. 156. Merger and
consolidation permitted.
(a) Upon complying with the provisions of this article, any domestic
company, except a Lloyds, is hereby authorized and empowered to merge or
consolidate with any domestic company or with any foreign or alien company,
except a Lloyds if the surviving company meets the requirements for
authorization to engage in the insurance business in this state and, if
such merger or consolidation is authorized by the laws of the state or
country under which such foreign or alien company is incorporated or
organized.
(b) The Director may permit the formation of a domestic stock company that is established for the sole purpose of merging or consolidating with an existing stock company simultaneously with the effectiveness of a division authorized by this Code. Upon request of the dividing company, the Director may waive the requirements of Section 131.8 of this Code. Each domestic stock company formed under this subsection shall be deemed to exist before a merger and division under this Section becomes effective, but solely for the purpose of being a party to such merger and division. The Director shall not require that such domestic stock company be licensed to transact insurance business in this state before such merger and division. All insurance policies, annuities, or reinsurance agreements allocated to such domestic stock company shall become the obligation of the domestic stock company that survives the merger simultaneously with the effectiveness of the merger and division. The plan of merger or consolidation shall be deemed to have been authorized and approved by such domestic stock company if the dividing company authorized and approved such plan. The certificate of merger shall state that it was approved by the domestic stock company formed under this subsection.
(Source: P.A. 100-1118, eff. 11-27-18.)
(215 ILCS 5/156.1) (from Ch. 73, par. 768.1)
Sec. 156.1.
Acquisition by exchange of stock permitted.
Any domestic stock insurance company may adopt a plan of exchange of the
outstanding stock of its stockholders for the consideration herein
designated to be paid or provided by a corporation which acquires such
stock, in the manner provided in this Article.
The plan of exchange may provide that the acquiring corporation, as
consideration for the stock of the domestic corporation, (1) transfer
shares of its stock, or (2) transfer other securities issued by it, or (3)
pay cash therefor, or (4) pay or provide other consideration, or (5) pay or
provide any combination of the foregoing types of consideration.
“Acquiring corporation”, as used in this Article, means any stock
insurance corporation incorporated under this Code or under prior laws of
this State relating to the incorporation of domestic insurance
corporations; any stock corporation incorporated under the “Business
Corporation Act of 1983” or under prior laws of this State authorizing the
establishment of business corporations; and any foreign or alien stock
corporation qualified to do business in Illinois and registered by the
corporation department; and any foreign or alien stock insurance company
authorized to do business in Illinois.
(Source: P.A. 83-1362.)
(215 ILCS 5/157) (from Ch. 73, par. 769)
Sec. 157.
Powers of
company not enlarged.
Nothing in this article contained shall be construed to authorize any
company to engage in any kind of insurance business not authorized by its
articles of incorporation nor to authorize any foreign or alien company to
engage in any kind of insurance business in this State not covered by its
certificate of authority to do business in this State.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/158) (from Ch. 73, par. 770)
Sec. 158.
Resolutions for merger or consolidation or adoption of a plan of exchange.
The Board of Directors, Trustees or other governing body of each
domestic company desiring to merge or consolidate or to adopt a plan of
exchange shall, by resolution, approve an agreement of merger or
consolidation or plan of exchange, as the case may be, setting forth:
(a) the names of the companies proposing to merge or consolidate or to
adopt a plan of exchange, and the names of the states or countries under
which each of the companies is incorporated or organized;
(b) in the case of a merger, the name of the company into which they
propose to merge, hereafter designated as the surviving company; in the
case of a consolidation, the name of the company into which they propose to
consolidate, hereafter designated as the new company, and the name of the
state or country under the laws of which the new company is to be
incorporated or organized;
(c) the terms and conditions of the proposed merger or consolidation or
plan of exchange, and the mode of carrying the same into effect;
(d) the manner and basis of converting the shares of stock, if any, of
each merging or consolidating company into shares, securities and
obligations, if any are to be issued, of the surviving or new company as
the case may be;
(e) in the case of a merger, a statement of any changes in the articles
of incorporation of the surviving company; in the case of consolidation,
all the statements with respect to the new company required to be set forth
in original articles of incorporation for a similar company formed under
this Code; and
(f) such other provisions with respect to the merger or consolidation or
plan of exchange as are deemed necessary or advisable.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/159) (from Ch. 73, par. 771)
Sec. 159.
Vote of
shareholders and policyholders.
(1) The agreement of merger or consolidation shall be submitted to a
vote at a meeting of the shareholders, if any, of each domestic company and
at a meeting of such policyholders of each domestic company, other than a
fraternal benefit society, as are entitled to vote. The plan of exchange
shall be submitted to a vote at a meeting of the shareholders of the
company to be acquired. The meetings may be either annual, periodic or
special. Written or printed notice shall be given not less than 20 days
before each such meeting, either personally or by mail, to each shareholder
of record and to each policyholder entitled to vote. If mailed, such notice
is deemed to be delivered when deposited in the United States mail, with
postage prepaid, addressed to the shareholder or policyholder, at his
address as it appears on the records of the company. However, a domestic
mutual company licensed in 2 or more States may give notice by publication
in a newspaper of general circulation in the county in which the company
has its principal office and in either of the two largest cities in each
State in which the company shall be licensed to do business except as
provided in paragraph (3). If the domestic mutual company is licensed in
Illinois only, then such notice may be given by publication in a newspaper
of general circulation in the 10 counties that have the largest
concentration of its policyholders. Notice by publication as approved by
the Director shall be published once weekly on 3 successive weeks, the last
publication to be at least 20 days before such meeting and not more than 40
days before such meeting. Such notice, whether the meeting is annual,
periodic or special, shall state the place, day, hour and purpose of the
meeting. A copy or a summary of the agreement of merger or consolidation,
or plan of exchange, as the case may be, shall be included in or enclosed
with such notice. The shareholders or policyholders may vote in person or
by proxy. Each shareholder entitled to vote at such meeting shall have one
vote for each share of stock held by him. In the case of domestic companies
other than fraternal benefit societies the affirmative vote of two-thirds
of all outstanding shares, if any, and if policyholders are entitled to
vote, two-thirds of the votes cast by such policyholders of each such
company, as are represented at the meeting in person or by proxy, is
necessary for the approval of any such agreement or plan.
(2) In the event that a domestic fraternal benefit society is a party to
the agreement of merger or consolidation, the board of managers, directors
or trustees of such society shall submit the agreement to the supreme
legislative and governing body of such society at any regular or special
meeting thereof, provided a copy or summary of such agreement shall have
been included in or enclosed with the notice of such meeting. Such notice
shall be given as provided in the laws of the society for the convening of
such supreme legislative and governing body in regular or special session,
as the case may be. The affirmative votes of two-thirds of all members of
such supreme legislative and governing body is necessary for the approval
of the agreement.
(3) The provisions of paragraph (1) relating to notice by publication
shall not apply to a merger or consolidation between a mutual company and a
stock company if the agreement provides that the stock company is the
surviving company. In such case, notice either mailed or personal as
provided by paragraph (1) shall be given to each shareholder of record and
to each policyholder entitled to vote.
(Source: Laws 1968, p. 276.)
(215 ILCS 5/160) (from Ch. 73, par. 772)
Sec. 160.
Execution
of agreement or plan of exchange by domestic company.
Upon such approval of an agreement of merger or consolidation or plan of
exchange it shall be executed by any domestic company party thereto by its
president or a vice-president and secretary or an assistant secretary, or
the executive officers corresponding thereto.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/161) (from Ch. 73, par. 773)
Sec. 161.
Approval
and execution of agreement or plan of exchange by foreign or alien
company.
In the event that a foreign or alien company is a party to the agreement
of merger or consolidation or plan of exchange, the agreement or plan shall
be executed by the proper officers of such foreign or alien company when
they are duly authorized thereto by such action on the part of the
directors, shareholders, members, or policyholders of such foreign or alien
company as may be required by the laws of the domiciliary state or country
of such foreign or alien company.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/162) (from Ch. 73, par. 774)
Sec. 162.
Certificate of Merger or Consolidation or Plan of Exchange
and Certificate of Approval.
(1) Upon the execution of an agreement of
merger or consolidation or plan of exchange, there shall be delivered to
the Director:
- (a) two duplicate originals of the agreement or plan;
- (b) affidavits of officers of each of the companies setting forth the facts necessary to show that all requirements of law with respect to notices to persons entitled to vote have been complied with;
- (c) certificates of the secretaries or assistant secretaries or corresponding officers of each of the companies, in case of a merger or consolidation, or of the company to be acquired in case of a plan of exchange, certifying to the number of shares, if any, outstanding, the number of shares voted for and against such agreement or plan, and further in the case of a merger or consolidation (1) the number of policyholders represented at the meeting at which the agreement was considered, and (2) the number of votes cast by policyholders for and against such agreement or (3) in the case of a fraternal benefit society, the number of delegates of the supreme legislative or governing body, and the number of votes cast by the delegates for and against the agreement;
- (d) the certificates required by Section 171;
- (e) if the surviving or new company is a domestic company and any foreign or alien company is a party to the merger or consolidation and the laws of the state or country under which such foreign or alien company is incorporated require approval of the merger or consolidation by an official of such state or country, a certificate of approval of such official; and
- (f) in case of consolidation where the new company is a foreign or alien company, an instrument appointing the Director and his or her successor or successors in office, the attorney of such company for service of process, containing the same provisions and having the same effect as the instrument required of a foreign or alien company in order to be admitted to transact business in this State.
In addition, the Director shall be provided, in substantially the same
form, the information required under Article VIII 1/2 of this Code.
(2) In case the surviving or new company is a domestic company, if
the Director finds that:
- (a) the agreement of merger or consolidation is in accordance with the provisions of this Article and not inconsistent with the laws and the Constitutions of this State and the United States;
- (b) the surviving or new company has complied with all applicable provisions of this Code;
- (c) no reasonable objection exists to such merger or consolidation; and
- (d) the standards established under Article VIII 1/2 are satisfied;
he or she shall approve the agreement. The provisions of any law with
reference to age limits and medical examination shall be inoperative in
so far as agreements of merger or consolidation are concerned. If the
agreement of merger or consolidation be approved by the Director, he or she
shall file the affidavits and certificates and one of the duplicate
originals of the agreement in his or her office, endorse upon the other
duplicate original his or her approval thereof, and deliver it, together
with a
certificate of merger or consolidation, as the case may be, to the
surviving or new company. In the case of a consolidation, the Director
shall also issue a certificate of authority to the new company.
(3) In case the surviving or new company is a foreign or alien
company, if the Director finds that:
- (a) the agreement of merger or consolidation is in accordance with the provisions of this Article and not inconsistent with the laws and the Constitutions of this State and the United States;
- (b) the agreement of merger or consolidation provides for the assumption by the new or surviving company of all the liabilities and obligations of the companies parties to the merger or consolidation and otherwise affords proper protection for creditors and policyholders and that such provisions are not inconsistent with the laws of the state or country of incorporation of such new or surviving company;
- (c) the surviving or new company has complied with all applicable provisions of this Code;
- (d) no reasonable objection exists to such merger or consolidation; and
- (e) the standards established under Article VIII 1/2 are satisfied;
he or she
shall approve the agreement. If the agreement be approved by the
Director, he or she shall file the affidavits and certificates and one of
the
duplicate originals of the agreement in his or her office, endorse upon the
other duplicate original his or her approval thereof, and deliver it,
together
with a certificate of approval of the merger or consolidation, as the
case may be, to the surviving or new company.
(4) In the case of a plan of exchange, if the Director finds that the
parties
to the exchange have established that:
- (a) the plan, if effective, will not tend adversely to affect the financial stability or management of any domestic company which is a party thereto or the general capacity or intention to continue the safe and prudent transaction of the insurance business of such domestic company or companies;
- (b) the interests of the policyholders and shareholders of each domestic insurance company which is a party to the plan are protected;
- (c) the competence, experience and integrity of those persons who would control the operation of the domestic company are such as to be in the best interests of the policyholders of such company to permit such exchange;
- (d) the terms and conditions of the plan are fair and reasonable; and
- (e) the standards established under Article VIII 1/2 are satisfied;
he or she
shall approve the plan of exchange. If the plan of exchange be approved
by the Director, he or she shall file the affidavits and certificates and
one of
the duplicate originals of the plan of exchange in his or her office,
endorse upon
the other duplicate original his or her approval thereof, and deliver it,
together
with a certificate of approval of the plan of exchange to the domestic company.
(5) If the Director refuses to approve the agreement of merger or
consolidation, or plan of exchange, notice of such refusal, assigning
the reasons therefor,
shall be given in writing by the Director to each of the companies party
thereto, within 60 days from the date of the delivery of such agreements
or plan to him or her, and he or she shall grant any of such companies
a hearing
upon
request. The hearing shall be held within 30 days of the Director’s receipt
of request for hearing. All persons to whom it is proposed to issue securities
in such agreements or exchange shall have a right to appear.
Within 30 days after the close of the hearing the Director shall approve
or disapprove or place conditions precedent upon his or her approval of the
merger or consolidation or plan by issuing a written order stating his or
her
determination and the reasons therefor.
(Source: P.A. 90-381, eff. 8-14-97.)
(215 ILCS 5/163) (from Ch. 73, par. 775)
Sec. 163.
Date
merger or consolidation or plan of exchange effected.
(1) If the surviving or new company is a domestic company, the merger or
consolidation is effected upon the issuance of the certificate of merger or
the certificate of consolidation, as the case may be.
(2) If the surviving or new company is a foreign or alien company and
the Director has issued a certificate of approval of the merger or
consolidation, the date upon which the merger or consolidation is effected
shall be determined by the laws of the state or country of incorporation or
organization of the surviving or new company. However, the merger or
consolidation shall in no event become effective in this State until a
certificate of merger or consolidation, as the case may be, or other
evidence that the merger or consolidation is effected is issued by the
proper official of the state or country of incorporation or organization of
the surviving or new company and is filed with and approved by the
Director.
(3) Notice of adoption of the plan and the approval thereof by the
Director shall be delivered or mailed to each shareholder of record of the
domestic insurance company to be acquired who was entitled to vote thereon
and an affidavit of the secretary or assistant secretary of such company or
of an officer of the company’s transfer agent that such notice was given
shall be filed with the Director. The plan shall become effective 10 days
after receipt of the affidavit by the Director. A plan of exchange may be
abandoned pursuant to any provisions for abandonment contained therein at
any time, provided that notice of such abandonment shall be delivered or
mailed to each such stockholder and filed with the Director prior to the
termination of such 10 day period.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/164) (from Ch. 73, par. 776)
Sec. 164.
Removal of
property of domestic, merged or consolidated company from this State.
(1) If the surviving or new company shall be a foreign or alien company,
no property of the domestic merged or consolidated company shall be removed
from this State by reason of such merger or consolidation, prior to, nor
shall title to such property vest in the surviving or new company until,
the merger or consolidation shall become effective in this State as
provided in section 163.
(2) Any director or officer of any domestic company removing or
permitting the removal of any property of company from this State in
violation of this section, shall be guilty of a Class A misdemeanor.
(Source: P.A. 77-2699.)
(215 ILCS 5/165) (from Ch. 73, par. 777)
Sec. 165.
Recording of certificate of merger or consolidation.
Within 15 days after such merger or consolidation has become
effective, the surviving or new company shall file for record with the recorder
of the county in which the principal office of any of the
companies parties to the agreement is located in this State, the agreement
of merger or consolidation, or copy thereof, certified by the Director, any
certificate of approval issued by the Director, or copy thereof, certified
by him and a certificate of merger or consolidation, as the case may be, or
a copy thereof, certified by the Director, or by the official of the state
or country that issued such certificate. The certificate of merger or
consolidation, or a copy thereof so certified, shall also be recorded with
the recorder of each other county in this State in which any of the
companies parties to the agreement, shall have real property at the time of
such merger or consolidation, the title to which will be transferred by the
merger or consolidation.
(Source: P.A. 83-358.)
(215 ILCS 5/166) (from Ch. 73, par. 778)
Sec. 166.
Effect of
merger or consolidation.
(1) If the surviving or new company is a domestic company, when such
merger or consolidation has been effected
(a) the several companies parties to the agreement of merger or
consolidation shall be a single company, which, in the case of a merger,
shall be that company designated in the agreement of merger as the
surviving company, and in the case of a consolidation, shall be the new
company provided for in the agreement of consolidation;
(b) the separate existence of all of the companies parties to the
agreement of merger or consolidation, except the surviving company in the
case of a merger, shall cease;
(c) such surviving or new company shall have all of the rights,
privileges, immunities and powers and shall be subject to all of the duties
and liabilities granted or imposed by this Code;
(d) such surviving or new company shall thereupon and thereafter possess
all the rights, privileges, immunities, powers and franchises of a public
as well as of a private nature, of each of the companies so merged or
consolidated; and all property, real, personal and mixed, and all debts due
on whatever account, including subscriptions to shares, assessments payable
from members or policyholders, and all other choses in action and all and
every other interest of, or belonging to or due to, each of the companies
so merged or consolidated shall be deemed to be transferred to and vested
in such surviving or new company without further act or deed; and the title
to any real estate, or any interest therein, under the laws of this State
vested in any of such companies shall not revert or be in any way impaired
by reason of such merger or consolidation;
(e) such surviving or new company shall thenceforth be responsible and
liable for all the liabilities and obligations of each of the companies so
merged or consolidated; any claim existing or action or proceeding pending
by or against any of such companies may be prosecuted to judgment as if
such merger or consolidation had not taken place, or such surviving or new
company may be substituted in its place; neither the rights of creditors
nor any liens upon the property of any of such companies shall be impaired
by such merger or consolidation, but such liens shall be limited to the
property upon which they were liens immediately prior to the time of such
merger or consolidation, unless otherwise provided in the agreement of
merger or consolidation; and
(f) in case of a merger, the articles of incorporation of the surviving
company shall be supplanted and superseded to the extent, if any, that any
provision or provisions of such articles shall be restated in the agreement
of merger as provided in section 158, and such articles of incorporation,
shall be deemed to be thereby and to that extent amended; in case of a
consolidation, the statements set forth in the agreement of consolidation
as provided in section 158 shall be deemed to be articles of incorporation
of the new company formed by such consolidation.
(2) If the surviving or new company is a foreign or alien company, when
such merger or consolidation has become effective in this State
(a) the effect of the merger or consolidation shall be determined by the
law of the state of incorporation or organization of such company;
(b) the separate existence of all domestic companies parties to the plan
of merger or consolidation shall cease;
(c) all property, real, personal, and mixed, and all debts due on
whatever account including subscriptions to shares, assessments payable
from members or policyholders and all other choses in action and all and
every other interest of or belonging to and due to each of the companies so
merged or consolidated shall be taken and deemed to be transferred to and
vested in such surviving or new company without further act or deed, and
the title to any real estate, or any interest therein, shall not revert or
be in any way impaired by reason of such merger or consolidation.
(3) In the event of a merger or consolidation under this article, the
surviving company or the consolidated company shall be considered as having
the age of the oldest company which is a party to such merger or
consolidation for the purpose of complying with requirements of the laws
relating to age of company.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/167) (from Ch. 73, par. 779)
Sec. 167.
Rights of
dissenting shareholders of domestic company.
(1) If a shareholder entitled to vote of (a) a domestic company which is
a party to a merger or consolidation or (b) a domestic insurance company to
be acquired under a plan of exchange files with such company, prior to or
at the meeting of shareholders at which the agreement of merger or
consolidation or plan of exchange is submitted to a vote, a written
objection to such agreement or plan, and does not vote in favor thereof,
and such shareholder, within 20 days after the merger or consolidation or
plan of exchange has become effective in this State makes written demand on
the surviving or new company or on the domestic insurance company to be
acquired under a plan of exchange for payment of the fair value of his
shares as of the day prior to the date on which the vote of shareholders
was taken approving the merger or consolidation or plan of exchange, such
surviving or new company or domestic insurance company shall pay to such
shareholder upon surrender of his certificate or certificates representing
such shares, the fair value thereof. Any shareholder who makes such
objection and demand shall cease to be a shareholder and shall have no
rights with respect to such shares except the right to receive payment
therefor. If within 30 days after the effective date, the value of such
shares is agreed upon between the shareholder and the surviving or new
company or the domestic insurance company to be acquired under a plan of
exchange, as the case may be, and such agreement is approved in writing by
the Director, payment therefor shall be made within 90 days after the
effective date. If within 30 days after the effective date the surviving or
new company or the domestic insurance company to be acquired under a plan
of exchange, as the case may be, and the shareholders do not so agree, or
any agreement as to value is not approved in writing by the Director,
either such company or the shareholder may, within 90 days after the
effective date, petition the circuit court of the county in which the
principal office of the surviving or new company or domestic insurance
company is located, to appraise the value of such shares. In the event the
surviving or new company has no office in this State, then such petition
may be filed in the circuit court of the county in which the principal
office of the company in which such shareholder holds shares was located,
immediately prior to such merger or consolidation. A copy of the petition
shall be delivered or mailed by registered mail to the Director within 5
days after the filing thereof and proof of such delivery or mailing shall
be filed with the court. The Director has the right to appear through the
Attorney General and be heard upon all questions and issues in the
proceeding. The practice, procedure and judgment in the circuit court upon
such petition shall be the same, so far as practicable, as that under the
eminent domain laws in this State.
(2) Payment of the appraised value of such shares shall be made within
60 days after the entry of the judgment or order finding such appraised
value and the judgment shall be payable only upon and simultaneously with
the surrender to the surviving or new company or the domestic insurance
company to be acquired under a plan of exchange of the certificate or
certificates representing such shares. The right of a dissenting
shareholder to be paid the fair value of his shares as herein provided
shall cease if and when the Director revokes the approval to the merger or
consolidation, as provided in Section 168, or if the merger or
consolidation or plan of exchange be abandoned.
(3) Every shareholder who did not vote in favor of such merger or
consolidation or plan of exchange and who does not object in writing and
demand payment of the value of his shares at the time and in the manner
aforesaid, or does not file a petition within the time herein limited, is
conclusively presumed to have assented to such merger or consolidation or
plan of exchange and shall be bound by the terms thereof.
(4) All shares of dissenting shareholders so acquired by a domestic
insurance company party to a plan of exchange shall be cancelled by the
board of directors of such company upon the plan of exchange becoming
effective or at any time thereafter, and the capital stock of the company
shall be decreased in accordance with Section 33.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/168) (from Ch. 73, par. 780)
Sec. 168.
Rights of
dissenting policyholder of domestic company.
(1) If not less than five per centum of all the policyholders in any
domestic company who were entitled to vote with respect to any merger or
consolidation and who did not vote in favor of such merger or consolidation
at the meeting at which the agreement of merger or consolidation was
adopted by the policyholders of such company, or if not less than five per
centum of the members of any domestic fraternal benefit society party to a
merger or consolidation shall file, at any time within thirty days after
the agreement of merger or consolidation is effected, a petition with the
Director for a hearing upon such agreement of merger or consolidation, the
Director shall order a hearing upon said petition, fix the time and place
of such hearing, and give written notice to the companies that are parties
to the merger or consolidation, at least fifteen days before the date of
such hearing. Any member or policyholder so petitioning may appear before
the Director at such hearing, either in person or by an attorney, and be
heard with reference to said agreement. If, upon such hearing being had,
the Director finds that the interests of the members or policyholders, as
the case may be, of such company are not properly protected, or if he finds
that any reasonable objection exists to such agreement, he shall enter an
order revoking the approval already given, and the agreement of merger or
consolidation shall, thereupon, become null and void.
(2) The Director shall have like power to revoke any approval of any
such agreement if any officer, director or employee of any company party to
such agreement shall, after reasonable notice, fail or refuse without
reasonable cause to attend and testify at such hearing, or to produce any
books or papers called for by said Director.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/169) (from Ch. 73, par. 781)
Sec. 169.
Rights of
dissenting shareholders and policyholders of foreign or alien company.
The rights of any dissenting shareholder, member or policyholder of any
foreign or alien company party to a merger or consolidation, shall be those
afforded to such shareholder, member, or policyholder by the laws of the
domiciliary state or country of such foreign or alien company.
(Source: Laws 1937, p. 696.)
(215 ILCS 5/169.1) (from Ch. 73, par. 781.1)
Sec. 169.1.
Effect
of exchange under plan of exchange.
(1) Upon a plan of exchange becoming effective, the exchange provided
for therein is considered to have been consummated and each shareholder of
the domestic stock insurance company acquired ceases to be a shareholder of
such company. The ownership of all shares of the issued and outstanding
stock of such company, except shares payment of the value of which is
required to be made by such company under Section 167, vests in the
acquiring corporation automatically without any physical transfer or
deposit of certificates representing such shares. All shares payment of the
value of which is required to be made by such company under Section 167 are
considered no longer outstanding shares of such company. The acquiring
corporation thereupon becomes the sole shareholder of such domestic stock
insurance company and has all the rights, privileges, immunities and powers
and, except as otherwise provided herein, is subject to all of the duties
and liabilities to the extent provided by law of a shareholder of an
insurance company organized under the laws of this State.
(2) Certificates representing shares of the domestic insurance company
to be acquired prior to the plan of exchange becoming effective, except
certificates representing shares payment of the value of which is required
under Section 167, shall after the plan of exchange becomes effective,
represent (a) shares of the issued and outstanding capital stock or other
securities issued by the acquiring corporations and (b) the right, if any,
to receive cash or other consideration upon such terms as are specified in
the plan of exchange. However, the plan of exchange may specify that all
such certificates shall after the plan of exchange becomes effective
represent only the right to receive shares of stock or other securities
issued by the acquiring corporation, or cash or other consideration or any
combination thereof upon such terms as are specified in the plan of
exchange.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/169.2) (from Ch. 73, par. 781.2)
Sec. 169.2.
Acquiring and acquired corporations under a plan of exchange to be
separate.
The domestic stock insurance company acquired under a plan of exchange
and the acquiring corporation are in all respects separate and distinct
corporations, with neither corporation having any liability to the
creditors or policyholders, if any, or shareholders of the other, for any
acts or omissions of the officers, directors or shareholders of either or
both of such corporations.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/170) (from Ch. 73, par. 782)
Sec. 170.
Transfer
of deposits.
(1) If the surviving or new company shall be a foreign or alien company
and the laws of the state or country under which such surviving or new
company is incorporated or organized shall require the maintenance with any
official of such State or country of a deposit of the legal reserve on any
policies, then the Director is authorized to deliver to the proper
custodian of such deposits of such state or country any deposits
theretofore made with the Director pertaining to policies of any of the
merged or consolidated companies. If the surviving or new company shall be
a domestic company into which has been merged or consolidated a foreign or
alien company incorporated or organized in a state or country the laws of
which require the maintenance with an official of a deposit of the legal
reserve on any policies, then the Director is hereby authorized to receive
from such official any deposit theretofore made with such official
pertaining to the policies of any of the merged or consolidated companies.
(2) Any surviving or new company shall, within 60 days after the
transfer of such deposit, notify the holder of every policy secured by such
transferred deposit, that the transfer has been made. The president or
vice-president and secretary or assistant secretary of such company, or the
executive officers corresponding thereto, shall within 30 days thereafter,
file with the Director an affidavit of the fact that due notice to
policyholders, as provided for herein, has been given. If a surviving or
new company shall be a foreign or alien company, the Director shall require
from such company, before transferring any deposit to any official of the
state or country under the laws of which such foreign or alien company is
incorporated or organized, a written agreement that notice of such transfer
will be given to policyholders and that an affidavit with regard to such
notice will be furnished to the Director as in this section provided.
(3) In the event any deposit is to be maintained in this State by reason
of this section, the amount thereof from time to time for each such policy
shall be at least equal to the amount which would be required in the state
where such deposit was theretofore maintained under the provisions of the
law of such state in effect on the date the merger or consolidation was
effected. The deposits so maintained in this State shall consist of
securities of the kinds authorized for investment by Article VIII of this
Code.
(Source: Laws 1959, p. 1431.)
(215 ILCS 5/171) (from Ch. 73, par. 783)
Sec. 171.
Certificates of fees and commissions paid.
Whenever agreements of merger or consolidation or plans of exchange are
filed with the Director, there shall also be filed a certificate executed
by the president or a vice-president and attested by the secretary or an
assistant secretary, or the executive officers corresponding thereto, and
under the corporate seal of each of the companies party to the agreement of
merger or consolidation or plan of exchange, verified by the affidavits of
such officers, setting forth all fees, commissions or other compensations,
or valuable considerations paid or to be paid, directly or indirectly, to
any person in any manner securing, aiding, promoting or assisting in any
such merger or consolidation or plan of exchange.
(Source: Laws 1967, p. 2406.)
(215 ILCS 5/172) (from Ch. 73, par. 784)
Sec. 172.
Payment of
fees to officer or director prohibited.
(1) No director or officer of any company party to a merger or
consolidation or plan of exchange, except as fully expressed in the
agreement of merger or consolidation or plan of exchange shall receive any
fee, commission, other compensation or valuable consideration whatever,
directly or indirectly for in any manner aiding, promoting or assisting in
such merger or consolidation or plan of exchange.
(2) Any person violating the provisions of this Section shall be guilty
of a Class A misdemeanor.
(Source: P.A. 77-2699.)