Capitalization of Insurance Companies

Anne X. Alpern, Attorney General, and Michael J. Stack, Jr., Deputy Attorney General,

You have asked our advice as to whether or not a domestic stock insurance company’s capital structure may be composed of common and preferred stock. In the event it may, you further ask whether the articles of agreement must provide the time when and the conditions under which the preferred stock may be redeemed.

You have informed us that these questions arose in connection with a company to be organized as a stock casualty insurance company for the purpose of engaging in the classes of insurance specified in…