Colorado § 10-3-1711 - After division is effective.

§ 10-3-1711. After division is effective.

(1) (a) On the effective date of a division, if the dividing insurer survives, all of the following apply:

(I) The dividing insurer continues to exist;

(II) The dividing insurer must amend its articles of incorporation if the amendments are provided for in the plan of division; and

(III) The dividing insurer must amend its bylaws if the amendments are provided for in the plan of division.

(b) On the effective date of a division, if the dividing insurer does not survive, then the dividing insurer ceases to exist, and any resulting insurer created by the plan of division comes into existence.

(c) Each resulting insurer holds any capital, surplus, and other assets allocated to the resulting insurer by the plan of division as a successor to the dividing insurer by operation of law and not by transfer, whether directly or indirectly. The articles of incorporation and bylaws, if any, of each resulting insurer are effective when the resulting insurer comes into existence.

(d) All capital, surplus, and other assets of the dividing insurer:

(I) That are allocated by the plan of division vest in the applicable resulting insurer as provided in the plan of division or remain vested in the dividing insurer as provided in the plan of division;

(II) That are not allocated by the plan of division remain vested in the dividing insurer if the dividing insurer survives the division and are allocated to, and vest pro rata in, the resulting insurers individually if the dividing insurer does not survive the division; and

(III) Otherwise vest as provided in this section without transfer, reversion, or impairment.

(e) A resulting insurer to which a cause of action is allocated may be substituted or added in any pending action or proceeding to which the dividing insurer is a party when the division becomes effective.

(f) All liabilities, including policy liabilities, of a dividing insurer are allocated between or among any resulting insurers as provided in section 10-3-1710, and each resulting insurer to which liabilities are allocated is liable only for those liabilities, including policy liabilities, allocated as a successor to the dividing insurer by operation of law, and not by transfer or assumption, whether directly or indirectly.

(g) Any shares in the dividing insurer that are to be converted or canceled in the division are converted or canceled, and the shareholders of those shares are entitled only to the rights provided to the shareholders under the plan of division and any appraisal rights that the shareholders may have pursuant to section 10-3-1713.

(2) Except as provided in the dividing insurer's articles of incorporation or bylaws, a division does not give rise to any rights that a shareholder, director of a domestic stock insurer, or third party would have upon a dissolution, liquidation, or winding up of the dividing insurer.

(3) The allocation to a resulting insurer of capital, surplus, or other asset that is collateral covered by an effective financing statement is not effective until a new effective financing statement naming the resulting insurer as a debtor is effective under the "Uniform Commercial Code", title 4.

(4) Unless otherwise provided in the plan of division, the shares in, and any securities of, each resulting insurer are distributed to the dividing insurer, if it survives the division, or are distributed pro rata to the shareholders of the dividing insurer that do not assert any appraisal rights pursuant to section 10-3-1713.

(5) A division that becomes effective pursuant to this part 17 is not an assignment of any insurance policy, annuity, reinsurance agreement, or other type of contract.

Source: L. 2021: Entire part added, (HB 21-1013), ch. 144, p. 852, § 1, effective September 7.