Stock offerings - Content of application

1. A stock offering by an insurance company subsidiary of a mutual insurance holding company, an intermediate holding company subsidiary of a mutual insurance holding company, or an insurance company subsidiary of an intermediate holding company subsidiary to a mutual insurance holding company may not occur without the prior written approval of the commissioner secured through the application and hearing process under this chapter. An application for approval of a stock offering must contain the following: a. A description of the stock intended to be offered by the applicant, including a description of all shareholder rights. b. The total number of shares authorized to be issued, the estimated number the applicant requests permission to offer, the intended date or range of dates for the offer, and the manner in which the offer is to be conducted. c. A justification for a uniform planned offering price or a justification of the method by which the offering price will be determined. d. The name of any underwriter, syndicate member, or placement agent involved and, if known, the name of each entity, person, or group of persons to whom the offering is to be made who will, as a result of the offering, directly or indirectly control five percent or more of the total outstanding class of shares. If any involved underwriter, syndicate member, or placement agent is a corporation, or other entity, the name of each member of its board of directors or equivalent management team, with the names of the offeror's board of directors, must be provided. A copy of any offering documents, including any filing with the securities and exchange commission or a state securities regulator, must be included in the application. e. A description of any subscription rights to be afforded a member of the mutual insurance holding company. f. A detailed description of all expenses projected to be incurred in connection with the offering. g. A statement as to the intended use of the funds raised by the offering. h. A description of any fee, commission, or other valuable consideration earned by a director, officer, agent, or employee of the mutual insurance holding company or its affiliates specifically for aiding, promoting, or assisting in the structuring or placement of the offering. The commissioner may disallow any fee, commission, or other valuable consideration deemed to be unreasonable. This subdivision does not apply to the payment of reasonable fees and compensation to attorneys at law, accountants, actuaries, and investment bankers for services performed in the independent practice of their professions, even though the underwriters of such services are also directors of the mutual insurance holding company, its subsidiaries, or affiliates. i. A statement that the mutual insurance holding company, either directly or indirectly through an intermediate holding company of a mutual insurance holding company, shall retain ownership of at least a majority of the voting shares of the capital stock of the subsidiary stock insurance company as required by North Dakota Century Code section 26.1-12.1-02. j. Such other information as the commissioner shall require. 2. An application for a stock offering must include the following provisions: a. A restriction prohibiting an officer, director, employee, or other interested person of the mutual insurance holding company or its subsidiaries or its affiliates from the purchase or ownership of a share of the offering or receipt of an option to or for the benefit of an officer, director, employee, or other interested person, for a period of at least six months following the conclusion of the offering. This subdivision does not limit the rights of an officer, director, or other interested person from exercising a subscription right generally accorded a member of the mutual insurance holding company, except that, pursuant to such subscription right, an officer, director, or other interested person of the mutual insurance holding company or its subsidiaries or affiliates may not purchase or own, in the aggregate, directly or indirectly, more than five percent of the securities offered in the offering for a period of at least six months following the conclusion of the offering. b. A provision that an entity created under a plan of reorganization may issue more than one class of securities provided, however, that at all times a voting majority of each class must be held, directly or indirectly, by the mutual insurance holding company and, provided further, that no class of common stock may receive a dividend or other right greater than the class held, directly or indirectly, in the mutual insurance holding company.