§ 7118. Plan for acquisition of minority interests in a subsidiary
insurer. (a) Definitions. In this section:

(1) "Parent" means a corporation directly or indirectly owning at
least ninety-five percent of the aggregate issued and outstanding shares
of all classes of voting shares of a subsidiary.

(2) "Subsidiary" means a domestic company whose voting shares are so
owned.

(b) Any parent or subsidiary may, pursuant to a plan for acquisition
of minority interests in such subsidiary, adopted by the board of
directors, trustees or other governing body of the parent or subsidiary,
acquire all of the subsidiary's remaining issued and outstanding voting
shares, by exchange of shares, other securities, cash, other
consideration or any combination thereof.

(c) Such plan shall set forth:

(1) the name of the subsidiary;

(2) the total number of issued and outstanding voting shares of each
class of the subsidiary, the number of its shares owned by the parent
and, if either of the foregoing is subject to change prior to the
effective date of acquisition, the manner in which any change may occur;

(3) the terms and conditions of the plan, including the manner and
basis of exchanging the shares to be acquired for shares or other
securities of the parent, for cash, other consideration, or any
combination of the foregoing, the proposed effective date of acquisition
and a statement clearly describing the rights of dissenting shareholders
to demand appraisal;

(4) if the parent has adopted the plan and is neither a domestic
corporation nor an authorized insurer, its agreement to be bound by
section seven thousand one hundred nineteen of this article with respect
to the plan, its consent to the enforcement against it in this state of
the rights of shareholders pursuant to the plan, and a designation of
the superintendent as the agent upon whom process may be served against
the parent in the manner set forth in section one thousand two hundred
twelve of this chapter in any action or proceeding to enforce any such
rights; and

(5) such other provisions with respect to the plan as the board of
directors, trustees or other governing body deems necessary or
desirable, or which the superintendent may prescribe.

(d) Upon adoption of the plan, it shall be executed by the president
and attested by the secretary, or officers corresponding to either of
them, under the corporate seal of the parent or subsidiary which has
adopted the plan, as the case may be. Thereupon, a certified copy of the
plan, together with a certificate of its adoption subscribed by such
officers and affirmed by them as true under the penalties of perjury and
under the seal of the parent or the subsidiary, as the case may be,
shall be submitted to the superintendent for his approval. The
superintendent shall thereupon consider the plan and, if satisfied that
it complies with this article, is fair and equitable and not
inconsistent with law, he shall approve the plan. If the superintendent
disapproves the plan, notification of his disapproval, assigning the
reasons therefor, shall be given in writing by him to the parent or
subsidiary that submitted the plan. No plan shall take effect unless the
approval of the superintendent has been obtained.

(e) If the superintendent approves the plan, the parent or the
subsidiary which has adopted the plan shall deliver to each person who,
as of the date of delivery, is a holder of record of shares to be
acquired, a copy of the plan, or a summary thereof approved by the
superintendent, in person or by depositing the same in the post office,
postage prepaid, addressed to the shareholder at his address of record.
On or before the date of acquisition proposed in the plan, the parent or
the subsidiary which has adopted the plan shall file with the
superintendent a certificate, executed by its president and attested by
its secretary, or by officers corresponding to either of them, and
subscribed by such officers and affirmed by them as true under the
penalties of perjury, and under the seal of the parent or the
subsidiary, as the case may be, attesting to compliance with this
subsection.

(f) Upon compliance with this section, ownership of the shares to be
acquired pursuant to the plan shall vest in the parent or the subsidiary
which has adopted the plan on the date of acquisition proposed in the
plan whether or not the certificates for such shares have been
surrendered for exchange. If the plan was adopted by the parent it shall
be entitled to have new certificates registered in its name. If the
plan was adopted by the subsidiary the shares shall be retired and the
capital of the subsidiary reduced by the par value of the retired
shares. Shareholders whose shares have been so acquired shall thereafter
retain only the right either to receive the consideration to be paid in
exchange for their shares pursuant to the plan or to demand appraisal
pursuant to section seven thousand one hundred nineteen of this article.

(g) Neither the right granted by this section nor the exercise thereof
by a parent or subsidiary shall preclude the exercise by it of any other
rights it may have under this article.