The Oklahoma Insurance Commissioner has approved a significant restructuring plan for workers’ compensation insurer CompSource Mutual Insurance Company, marking the first conversion of its kind under a recently enacted state law designed to modernise insurance company structures.
In a decision announced in Oklahoma City, Insurance Commissioner Glen Mulready authorised the reorganisation of CompSource Mutual Insurance Company into a mutual holding company structure. The move will allow the insurer to transition from its current mutual structure into a stock insurance company while maintaining policyholder ownership through a newly formed parent entity.
Under the approved plan, CompSource will convert into a stock insurer named CompSource Mutual Insurance Company, S.I. Policyholders will become members of a newly created parent entity, CompSource Mutual Insurance Holding Company, which will indirectly own the converted stock insurer through CompSource Intermediate Holding Company.
The restructuring framework was enabled by new legislation adopted in 2024 through HB 3090. The law was introduced to streamline the transition of mutual insurers into alternative corporate structures and encourage greater flexibility and competitiveness within Oklahoma’s insurance market.
CompSource’s conversion will be the first time the mutual holding company structure has been implemented under the legislation in Oklahoma.
Policyholder approval required
State law requires that any such restructuring proposal must first be reviewed and approved by the state’s insurance regulator. Following regulatory approval, the plan must then be put to eligible members — the company’s policyholders — and receive support from at least two-thirds of those voting on the proposal.
Commissioner Mulready said protecting policyholders remained the central priority during the review process.
“Protection of policyholders has been our greatest concern in this review process,” said Insurance Commissioner Glen Mulready. “My office has employed significant due diligence in its review. Though not required, I held a public comment hearing and offered a written public comment period because I wanted to hear any concerns from the public. In addition to our own review, I also exercised my authority under the law to engage an independent and qualified third-party expert to review and ensure the plan of reorganization is fair and equitable to policyholders and protects policyholders’ rights.”
The public comment hearing also served another purpose. Because the Plan of Reorganization is otherwise confidential under Oklahoma law, the hearing created a formal avenue through which the document could be publicly disclosed and reviewed by stakeholders.
Safeguards for existing policyholders
According to the approval order issued by the state regulator, the proposed restructuring was assessed against several criteria including fairness to policyholders, financial stability, and the continuity of insurance services.
The Insurance Commissioner determined that the reorganisation plan protects policyholder rights and does not materially weaken the financial security or service standards currently provided by the company.
Existing policies will remain unchanged following the conversion. Every policy that is in force at the effective date of the restructuring will continue under its current terms and conditions, and premiums will not be altered mid-term solely because of the corporate conversion.
Policyholder governance rights will also be preserved through the new structure. While membership voting rights in CompSource itself will cease once the conversion is completed, they will be replaced by substantially similar voting rights and rights to surplus within the parent holding company.
Financial stability and regulatory oversight
Regulators also evaluated the financial position and leadership structure of the reorganised insurer. The plan satisfies capital and surplus requirements applicable to domestic stock insurers in Oklahoma, indicating that the company will remain financially stable after the conversion.
Additionally, the regulator concluded that the individuals who will control the new stock insurer possess the necessary competency, experience and integrity, and that their leadership is not contrary to the interests of policyholders or the wider public.
To further protect policyholders, the approval order includes a range of conditions and oversight measures designed to maintain strong regulatory supervision during the transition period.
Among the safeguards imposed are requirements that the insurer maintain a minimum risk-based capital level of 300% for three years. The Oklahoma Insurance Department must also pre-approve any dividends issued by the stock insurer during that same period.
Further provisions require advance notice to regulators of any changes involving directors or senior officers for three years, as well as regulatory approval for any stock distribution or sale for five years, including an independent valuation process.
The order also prohibits stock or stock option grants to company officers or management for a five-year period.
Public access to reorganisation plan
Details of the proposal were previously made available through the Notice of Comment Hearing issued in August 2025 by the Oklahoma Insurance Department.
A copy of the Plan of Reorganization was attached to that notice and remains publicly accessible through the department’s website.
The approval represents a significant milestone for Oklahoma’s insurance sector, signalling the first use of the state’s new mutual holding company legislation and potentially setting a precedent for similar corporate restructuring efforts in the future.
