                                 CODE OF VIRGINIA

FORMATION OF MUTUAL HOLDING COMPANY AND CONVERSION OF MUTUAL COMPANY (§
38.2-1005.1:2)

A mutual company, upon approval of the Commission, may reorganize by forming a
mutual holding company and continue the corporate existence of the reorganizing
mutual company as a stock insurance company in accordance with the provisions of
this article. At the time a plan of MHC conversion becomes effective and without
any further action:

1. The mutual company shall become a stock corporation, the membership interests
of the policyholders in the mutual company shall be deemed extinguished and all
eligible members of the mutual company shall become members of the mutual
holding company in accordance with the articles of incorporation and bylaws of
the mutual holding company and the applicable provisions of this article and
Chapter 10 (&#xA7; 38.2-1000 et seq.) of this title; and

2. All of the shares of capital stock of the converted company shall be issued
to the mutual holding company that, at all times thereafter, shall own not less
than a majority of the issued shares of the voting stock of the converted
company; however, either at the time the conversion becomes effective or, with
the Commission&#8217;s approval, at any later time, the voting shares of the
converted company may be held by one or more intermediate holding companies so
long as the mutual holding company at all times owns, directly or indirectly, a
majority of the voting shares of the converted company.

HISTORY: 2001, c. 726.