                                 CODE OF VIRGINIA

ADOPTION AND APPROVAL OF PLAN OF MHC CONVERSION (§ 38.2-1005.1:5)

A. The board of directors of a mutual company may adopt a plan of MHC conversion
that is consistent with the provisions of &#xA7; 38.2-1005.1:4 by the
affirmative vote of not less than two-thirds of the members of the board. At any
time before approval of the plan by the mutual company&#8217;s eligible members,
the board of directors, by affirmative vote of not less than two-thirds of its
members, may amend or withdraw the plan.

B. After a plan of MHC conversion has been adopted by the board of directors,
the plan and all amendments subsequently adopted shall be filed with the
Commission for review and approval. In addition to the plan and supporting
documents, the filing shall include (i) the form of notice to eligible members
required by subdivision E 1 of this section, (ii) the form of any proxy to be
solicited from eligible members together with all material to be distributed in
connection with such solicitation, (iii) the proposed articles of incorporation
and bylaws of the mutual holding company and each intermediate holding company,
if any, and (iv) the revised articles of incorporation and bylaws of the
converted company.

C. Upon receipt of the plan and other documents specified in subsection B of
this section, the Commission shall conduct a review of the plan. The Commission
shall approve the plan if it determines that the provisions of this article have
been complied with and that the plan is fair and equitable as regards the
interests of the members of the mutual company. The Commission may in its
discretion order a public hearing for the purpose of determining whether the
plan complies with the conditions listed in the preceding sentence. The
Commission may retain, at the mutual company&#8217;s expense, any qualified
expert not a member of its staff to assist in its review of the plan.

D. The Commission may condition approval of the plan upon such conditions,
stipulations or provisions as it determines are reasonably necessary to protect
policyholder interests of the converted company, including, but not limited to:

   1. Its prior approval of:
   				a. Any acquisition or formation of affiliate entities of the mutual
   holding company;
   				b. The capital structure of any intermediate holding company or any
   subsequent change thereto;
   				c. Any initial public offering or other issuance of equity or debt
   securities of an intermediate holding company or the converted company by
   private sale or public offering; and
   				d. Expansion of the activities of the mutual holding company into lines of
   business, industries or operations not identified or apparent at the time of
   approval of the plan.

   2. Limitations on:
   				a. Dividends and distributions, in addition to those otherwise provided by
   law, if their effect would be to reduce the capital and surplus of the
   converted company; and
   				b. The pledge, encumbrance or transfer of the stock of the converted
   company.

E. 1. Upon approval of a plan of MHC conversion by the Commission, the plan
shall be submitted to a vote of the eligible members at an annual or special
meeting of the members of the mutual company held not less than twenty-five nor
more than sixty days from the date notice of the meeting is given. Notice of the
members&#8217; meeting to act on the plan shall be given to each eligible member
at the member&#8217;s address as shown on the company&#8217;s records not later
than forty-five days following the date of the Commission&#8217;s approval of
the plan. The notice shall identify in reasonable detail the benefits and risks
of the plan of MHC conversion and shall be accompanied by a copy of the plan or,
if authorized by the Commission, a summary thereof; provided, however, that if a
summary of the plan is sent with the notice, members shall be advised that a
complete copy of the plan will be available without charge upon request. The
notice shall state that the Commission has approved the plan but that such
approval does not constitute a recommendation that members vote to adopt the
plan.

   2. Approval of the plan shall be by the affirmative vote of more than
   two-thirds of the votes cast by eligible members at a meeting at which a
   quorum is present. Eligible members may vote in person or by proxy. The number
   of votes an eligible member may cast shall be determined by the bylaws of the
   mutual company. If the bylaws contain no such provisions, each eligible member
   shall be entitled to cast one vote.

   3. Upon approval of the plan by the eligible members of the mutual company,
   the articles of incorporation of the mutual holding company, any intermediate
   holding company, and the converted company shall be adopted and filed with the
   Commission. In addition, the converted company shall file with the Commission
   a copy of the minutes of the meeting at which the members approved the plan
   together with a copy of the bylaws of the mutual holding company, any
   intermediate holding company, and the converted company. The plan of MHC
   conversion shall become effective on the date that all of the provisions of
   this section have been complied with and the new and revised articles of
   incorporation have been filed and admitted to record in the office of the
   clerk of the Commission in the manner provided by Chapter 9 (&#xA7; 13.1-601
   et seq.) of Title 13.1.

HISTORY: 2001, c. 726.