The Insurance Commission said it issued a new directive for the demutualization of domestic mutual life insurance companies to protect existing policyholders.
IC issued Circular Letter No. 2017-06 on Jan. 23, 2017, outlining three basic types of demutualization.
Demutalization is the process of converting a mutual life insurance company, which is owned by policyholders, into a publicly traded stock company owned by the shareholders, who may or may not be policyholders.
Insurance commissioner Dennis Funa said the entire process should be transparent, and that policyholders and members should be timely informed and the entire process should be publicly fully disclosed.
“It is the policy of the IC to afford full protection to policyholders, ensure fair and equitable treatment of members, and protect the interest of the converting company,” Funa said in a statement.