<PAGE> 1
EXHIBIT 8.1
August 16, 2000
Mutual Insurance Company of America
1301 North Hagadorn Road
East Lansing, MI 48223
Ladies and Gentlemen:
Pursuant to your request, we are providing our opinion of certain U.S. Federal
income tax consequences of: (a) the conversion of Mutual Insurance Company of
America ("MICOA") to a stock property and casualty insurance company under
Michigan law (the "Conversion"); (b) the receipt by MICOA Eligible Policyholders
of Subscription Rights to purchase shares of American Physicians Capital, Inc.,
a Michigan business corporation ("AP Capital"); and (c) the issuance of
Subscription Rights or stock by AP Capital for cash. All of the foregoing are to
occur pursuant to the Plan of Conversion, as adopted by the MICOA Board of
Directors and filed with the Office of Financial and Insurance Services of the
Michigan Department of Consumer and Industry Services ("MOFIS") on June 30, 2000
(the "Plan of Conversion").
In rendering the our opinion set forth below, we have relied upon (a) the Plan
of Conversion; (b) the prospectus included in the registration statement on Form
S-1 (the "Registration Statement") filed by MICOA with the Securities and
Exchange Commission; (c) the representations given by MICOA, which are annexed
hereto; and (d) such other documents as we have deemed necessary or appropriate.
If any of the representations annexed hereto are incorrect in whole or in part,
or if the terms of the Plan of Conversion are altered before consummation of the
Conversion, such inaccuracies or alteration may have a material effect upon our
opinion expressed in this letter.
Our opinion is based on the relevant provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the Treasury regulations thereunder, and the
judicial and administrative interpretations thereof. There are no assurances
that the conclusions reached herein will be accepted by the Internal Revenue
Service or judicial authorities if challenged. Any legislative, regulatory,
administrative, or judicial decisions subsequent to the date of this opinion may
have an impact on the validity of our conclusions.
Unless you specifically request otherwise, we will not update our opinion for
changes to the law, regulations, or the judicial and administrative
interpretations thereof. Additionally, pursuant to your request, we have not
analyzed the impact this transaction
<PAGE> 2
may have to any foreign policyholders or specific state or local income tax
consequences associated with the transaction.
Unless otherwise noted, all capitalized terms (other than proper nouns) and
acronyms not defined herein shall have the meaning set forth in Article I of the
Plan of Conversion.
Based upon and subject to the foregoing, the following constitutes the opinion
of PricewaterhouseCoopers, L.L.P.
1. The Conversion should constitute a tax-free reorganization within the
meaning of section 368(a)(1)(E) of the Code. As such, MICOA or the
Converted Company should recognize no gain or loss as a result of the
reorganization.
2. The tax attributes of MICOA, including the basis and holding period of each
asset in the hands of MICOA and the items described in Code section 381(c)
with respect to MICOA, should remain unchanged as tax attributes of the
Converted Company following the Conversion.
3. Neither MICOA nor the Converted Company should recognize gain or loss on
receipt of property in exchange for its stock.
4. The Eligible Policyholders should be treated as transferring their voting
rights and rights to share in a liquidation surplus of MICOA ("Membership
Rights") to AP Capital in exchange for the Subscription Rights. An Eligible
Policyholder will recognize gain or loss to the extent that the fair market
value of the Subscription Rights received, if any, differs from the
adjusted basis of such Eligible Policyholder in the Membership Rights
surrendered therefor.
5. AP Capital should recognize no gain or loss on its granting of Subscription
Rights to Eligible Policyholders and Officers, and should recognize no gain
or loss on the lapse of any Subscription Right.
6. An Eligible Policyholder or Officer who acquires a Share by exercising a
Subscription Right should have a basis in such Share equal to the amount of
cash paid therefor plus the basis in the Subscription Right, if any. Such
person's holding period in such Share should commence on the day the
Subscription Right is exercised.
7. Any person acquiring a share of AP Capital common stock other than through
exercise of a Subscription Right should have a basis in such share equal to
the cash paid.
8. AP Capital should recognize no gain or loss on the receipt of cash or other
property in exchange for its stock.
9. AP Capital should have a basis in the stock of Converted Company equal to
the fair market value of property exchanged therefor.
<PAGE> 3
10. AP Capital should recognize no gain or loss on the deemed exchange of
Membership Rights in MICOA, treated as received from MICOA policyholders in
exchange for Subscription Rights, for stock of the Converted Company.
11. Officers and Directors who receive Subscription Rights should recognize
income in an amount equal to the fair market value of the Subscription
Rights received, if any.
We hereby consent to the filing of this opinion as an exhibit to the
aforementioned Registration Statement and to the reference to this firm under
the caption "Material Federal Income Tax Consequences" in the Registration
Statement. The giving of this consent, however, does not constitute an admission
that we are "experts" within the meaning of section 11 of the Securities Act of
1933, as amended, or within the category of persons whose consent is required by
Section 7 of such Act.
Except as set forth above, this opinion is being furnished only to you in
connection with the events described in the Plan of Conversion and solely for
your benefit in connection therewith and may not be used or relied upon for any
other purpose and may not be circulated, quoted or otherwise referred to for any
other purpose without our express written consent.
Very truly yours,
/s/ PricewaterhouseCoopers, L.L.P.
PricewaterhouseCoopers, L.L.P.
<PAGE> 4
[PRICEWATERHOUSECOOPERS LETTERHEAD]
October 23, 2000
Mutual Insurance Company of America
1301 North Hagadorn Road
East Lansing, MI 48223
Ladies and Gentlemen:
Pursuant to your request, we are reaffirming our opinion of certain U.S. Federal
income tax consequences expressed in our letter dated August 16, 2000 (copy
attached), related to: (a) the conversion of Mutual Insurance Company of America
("MICOA") to a stock property and casualty insurance company under Michigan law
(the "Conversion"); (b) the receipt by MICOA Eligible Policyholders of
Subscription Rights to purchase shares of American Physicians Capital, Inc., a
Michigan business corporation ("AP Capital"); and (c) the issuance of
Subscription Rights or stock by AP Capital for cash.
In reaffirming our opinion, we have relied upon (a) the Plan of Conversion, as
amended an accepted by the Office of Financial and Insurance Services of the
Michigan Department of Consumer and Industry Services; (b) the prospectus
included in the registration statement on Form S-1 (the "Registration
Statement") filed by MICOA with the Securities and Exchange Commission; (c) the
representations given by MICOA, which were reaffirmed as of October 23, 2000;
and (d) such other documents as we have deemed necessary or appropriate. If the
terms of the Plan of Conversion are altered before consummation of the
Conversion, such alteration may have a material effect upon our opinions
expressed in this letter.
Our opinions are based on the relevant provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), the Treasury regulations thereunder, and the
judicial and administrative interpretations thereof. There are no assurances
that the conclusions reached herein will be accepted by the Internal Revenue
Service or judicial authorities if challenged. Any legislative, regulatory,
administrative, or judicial decisions subsequent to the date of this opinion may
have an impact on the validity of our conclusions.
Unless you specifically request otherwise, we will not update our opinion for
changes to the law, regulations, or the judicial and administrative
interpretations thereof. Additionally, pursuant to your request, we have not
analyzed the impact this transaction may have to any foreign policyholders or
specific state or local income tax consequences associated with the transaction.
<PAGE> 5
[PRICEWATERHOUSECOOPERS LETTERHEAD]
We hereby consent to the filing of this opinion as an exhibit to the
aforementioned Registration Statement and to the reference to this firm under
the caption "Material Federal Income Tax Consequences" in the Registration
Statement. The giving of this consent, however, does not constitute an admission
that we are "experts" within the meaning of section 11 of the Securities Act of
1933, as amended, or within the category of persons whose consent is required by
Section 7 of such Act.
Except as provided in our letter of August 16, 2000, our opinion is being
furnished only to you in connection with the events described in the Plan of
Conversion and solely for your benefit in connection therewith and may not be
used or relied upon for any other purpose and may not be circulated, quoted or
otherwise referred to for any other purpose without our express written consent.
Very truly yours,
/s/ PricewaterhouseCoopers, LLP
PricewaterhouseCoopers, LLP
