Chapter 611

611.425(1) (1) Definition. In this section, “electronic transmission” means transmission by the Internet, telephone, electronic mail, telegram, cablegram, datagram, or any other form or process of communication that does not directly involve the physical transfer of paper and that is capable of retention, retrieval, and reproduction of information by the recipient.

611.425(2) (2) Generally.

611.425(2)(a) (a) Unless the articles of incorporation or bylaws prohibit or limit proxy voting, a policyholder may appoint another person as proxy to vote or otherwise act for the policyholder at a meeting of policyholders or to express consent or dissent in writing to any corporate action without a meeting of policyholders.

611.425(2)(b) (b) A policyholder or the policyholder’s authorized officer, director, employee, agent, or attorney-in-fact may validly appoint a proxy by signing or causing the policyholder’s signature to be affixed to an appointment form by any reasonable means, including by facsimile signature.

611.425(2)(c) (c) To the extent authorized by the mutual’s bylaws, a policyholder or the policyholder’s authorized officer, director, employee, agent, or attorney-in-fact may validly appoint a proxy by transmitting or authorizing the transmission of an electronic transmission of the appointment to the person who will be appointed as proxy or to a proxy solicitation firm, proxy support service organization, or like agent authorized to receive the transmission by the person who will be appointed as proxy. Every electronic transmission shall contain, or be accompanied by, information that can be used to reasonably determine that the policyholder transmitted or authorized the transmission of the electronic transmission. Any person charged with determining whether a policyholder transmitted or authorized the transmission of the electronic transmission shall specify the information upon which the determination is made.

611.425(2)(d) (d) Any copy, facsimile telecommunication, or other reliable reproduction of the information in the appointment form under par. (b) or the electronic transmission under par. (c) may be substituted or used in lieu of the original appointment form or electronic transmission for any purpose for which the original appointment form or electronic transmission may be used, but only if the copy, facsimile telecommunication, or other reliable reproduction is a complete reproduction of the information in the original appointment form or electronic transmission.

611.425(3) (3) When effective. An appointment of a proxy is effective when a signed appointment form or, if authorized, an electronic transmission of the appointment is received by the inspector of election or the officer or agent of the mutual authorized to tabulate votes. An appointment is valid for 11 months unless a different period is expressly provided in the appointment.

611.425(4) (4) Revocability.

611.425(4)(a) (a) An appointment of a proxy is revocable unless the appointment form or, if authorized, electronic transmission states that it is irrevocable.

611.425(4)(b) (b) The appointment of a proxy is revoked if the policyholder appointing the proxy does any of the following:

611.425(4)(b)1. 1. Attends any meeting and votes in person.

611.425(4)(b)2. 2. Signs and delivers to the secretary or other officer or agent authorized to tabulate proxy votes either a written statement that the appointment of the proxy is revoked or a subsequent appointment form.

611.425(5) (5) Effect of death or incapacity. The death or incapacity of the policyholder appointing a proxy does not affect the right of the mutual to accept the proxy’s authority unless the secretary or other officer or agent of the mutual authorized to tabulate votes receives notice of the death or incapacity before the proxy exercises his or her authority under the appointment.

611.425(6) (6) Acceptance by mutual. Subject to s. 181.0727 and to any express limitation on the proxy’s authority stated in the appointment form or, if authorized, electronic transmission, a mutual may accept the proxy’s vote or other action as that of the policyholder making the appointment.

611.425 History History: 2013 a. 279.

611.426 611.426 Remote participation in policyholder meetings.

611.426(1) (1) If authorized by the board of directors in its sole discretion, and subject to sub. (2) and any guidelines and procedures adopted by the board of directors, policyholders and proxies of policyholders not physically present at a meeting of policyholders may participate in the meeting by means of remote communication.

611.426(2) (2) If policyholders and proxies of policyholders participate in a meeting of policyholders by means of remote communication, the participating policyholders and proxies of policyholders shall be considered to be present in person and permitted to vote at the meeting, whether the meeting is held at a designated place or solely by means of remote communication, if all of the following apply:

611.426(2)(a) (a) The mutual has implemented reasonable measures to verify that each person considered to be present and permitted to vote at the meeting by means of remote communication is a policyholder or proxy of a policyholder.

611.426(2)(b) (b) The mutual has implemented reasonable measures to provide policyholders and proxies of policyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the policyholders, including an opportunity to read or hear the proceedings of the meeting concurrently with the proceedings.

611.426(2)(c) (c) The mutual maintains a record of voting and other actions by any policyholder or proxy of a policyholder that votes or takes another action at the meeting by means of remote communication.

611.426 History History: 2021 a. 114.

611.43 611.43 Annual report to mutual policyholders. Every domestic mutual shall send to each policyholder requesting it an annual report which shall contain basic financial and operating data, information about important business and corporate developments, and such other information as the corporation wishes to include or as the commissioner by rule requires to be included in order to keep policyholders properly informed.

611.43 History History: 1971 c. 260.

611.51 611.51 Board of directors.

611.51(1) (1) General. Subject to this section, ss. 180.0801 and 180.0802 apply to stock corporations and ss. 181.0801 (1) and (2) and 181.0802 apply to mutuals.

611.51(2) (2) Number of directors.

611.51(2)(a) (a) General. Except under pars. (b) and (c), a corporation shall have at least 5 directors if no more than one director is an employee or representative of the corporation, and shall have at least 9 directors in other cases.

611.51(2)(b) (b) New corporations. During the first 5 years after initial issuance of a certificate of authority, a corporation shall have at least 5 directors.

611.51(2)(c) (c) Exception. The commissioner may by order reduce the number of directors required under this subsection, if he or she finds that it would be an unreasonable burden on the corporation to comply with the requirement and that the interests of policyholders and shareholders can be otherwise protected.

611.51(3) (3) Inside directors. Employees and representatives of a corporation may not constitute a majority of its board.

611.51(4) (4) Subsidiaries and closely held corporations. Subsections (2) (a) and (3) do not apply to an insurance subsidiary authorized under s. 611.26 (1) nor to a stock insurance corporation more than 95 percent of whose outstanding shares entitled to vote are owned by a single person or all of whose voting shareholders are either members of or are individually represented on the board.

611.51(5) (5) Classification of directors. If directors are divided into classes by the articles or the bylaws, no class may contain fewer than 3 members. Subject thereto, s. 180.0806 applies to stock corporations.

611.51(6) (6) Unlawful delegation. The board shall manage the business and affairs of the corporation and may not delegate its power or responsibility to do so, except to the extent authorized by ss. 180.0841, 181.0841, 611.56 and 611.67.

611.51(7) (7) Quorum and voting. Section 180.0824 applies to the board of a stock corporation and s. 181.0824 applies to the board of a mutual except as modified by s. 611.60.

611.51(8) (8) Place and notice of directors’ meetings. Sections 180.0820, 180.0822 and 180.0823 apply to stock corporations. Sections 181.0820, 181.0822 and 181.0823 apply to mutuals.

611.51(9) (9) Books and records.

611.51(9)(a) (a) Stock corporations. Sections 180.1601 to 180.1620 apply to stock corporations.

611.51(9)(am) (am) Mutuals.

611.51(9)(am)1. 1. Each mutual shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its policyholders, board of directors and committees having any authority of the board of directors. Each mutual shall keep at its principal office or at the office of its secretary a record giving the names and addresses of policyholders entitled to vote, or records showing where such information can be obtained.

611.51(9)(am)2. 2. Except for the records of the names and addresses of policyholders entitled to vote, all relevant books and records of a mutual may be inspected by any policyholder or the policyholder’s agent or attorney for any proper purpose at any reasonable time. Inspection of the records of the names and addresses of policyholders of mutuals entitled to vote shall be permitted only for the purpose of communicating with other policyholders with regard to the nomination and election of candidates for the board or other corporate matters which may be submitted to a vote of the policyholders. No person may, directly or indirectly, use any information so obtained for any other purpose.

611.51(9)(am)3. 3. In any pending action or proceeding, or upon petition, a court of record in this state may, upon notice fixed by the court, hearing and a showing of proper cause, and upon suitable terms, order any books and records of account, minutes and records of policyholders of a mutual and any other pertinent documents in the mutual’s possession, or transcripts from or duly authenticated copies thereof, to be brought within this state and kept at such place and for such time and for such purposes as may be designated in the order. A mutual failing to comply with an order under this subdivision is subject to involuntary dissolution under this chapter and all of its directors and officers may be punished for contempt of court for disobedience of the order.

611.51(9)(b) (b) Form of books, records or minutes. Any books, records or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

611.51(9)(c) (c) Records of policyholders entitled to vote. Any provision of this chapter or of any articles or bylaws of a mutual, which requires the keeping of records concerning the names and addresses of policyholders entitled to vote shall be deemed to be complied with by the keeping of a record of the names of policyholders and the names and addresses of insureds or persons paying premiums. Any such provision which requires the mailing or sending of notices, reports, proposals, ballots or other materials to policyholders shall be deemed to be complied with if mailing thereof is made to the insured or the person paying premiums on the policy for delivery to the policyholder.

611.51 History History: 1971 c. 260; 1975 c. 373; 1979 c. 102 ss. 99, 236 (5); 1983 a. 321 s. 5; 1989 a. 303, 308, 359; 1991 a. 16; 1997 a. 35, 79.

611.51 Annotation Legislative Council Note to (2) (a), 1975: This amendment accommodates the needs of small corporations while continuing to satisfy the purposes for having large boards, as explained in the note to s. 611.51 (2) (a) in chapter 260, laws of 1971. [Bill 643-S]

611.52 611.52 Election and removal of directors and officers of stock corporations.

611.52(1) (1) Resignation and removal of officers. Sections 180.0843 and 180.0844 apply to stock corporations.

611.52(2) (2) Election. At each annual meeting of shareholders, the shareholders shall elect directors to hold office until the next succeeding annual election except as provided in sub. (3) or under s. 180.0806. Each director shall hold office for the term for which he or she is elected and until his or her successor is elected and qualified if qualification is required. Section 180.0804 applies to a stock corporation.

611.52(3) (3) Resignation and removal of directors. Sections 180.0807 to 180.0810 apply to stock corporations.

611.52 History History: 1971 c. 260; 1973 c. 184; 1979 c. 102; 1989 a. 303.

611.53 611.53 Selection and removal of directors and officers of mutuals.

611.53(1) (1) Public selection of directors. The articles of a mutual may provide that any number of the directors shall be public directors chosen under a plan proposed by the corporation and approved by the commissioner. The plan shall be designed to assure true public representation on the board. The persons to be nominated as directors shall be persons whose insurance business or general experience qualifies them to serve responsibly and impartially.

611.53(2) (2) Election of directors. Directors not to be chosen under sub. (1) shall be elected by the policyholders.

611.53(3) (3) Resignation, vacancies and removal of directors. Subject to subs. (1) and (2), ss. 181.0807 and 181.0811 apply to a mutual. A director may be removed from office for cause by an affirmative vote of a majority of the full board at a meeting of the board called for that purpose.

611.53(4) (4) Resignation, vacancies and removal of officers. Sections 181.0843 and 181.0844 apply to a mutual.

611.53 History History: 1971 c. 260; 1997 a. 79.

611.54 611.54 Supervision of management changes.

611.54(1) (1) Report of selection.

611.54(1)(a) (a) General. The name of any person selected as a director or principal officer of a corporation, together with such pertinent biographical and other data as the commissioner requires by rule, shall be reported to the commissioner immediately after the selection.

611.54(1)(b) (b) New corporations. For 5 years after the initial issuance of a certificate of authority to a corporation, the commissioner may within 30 days after receipt of a report under par. (a) disapprove any person selected who fails to satisfy the commissioner that the person is trustworthy and has the competence, experience and freedom from conflict of interest necessary to discharge his or her responsibilities.

611.54(2) (2) Report of removal. Whenever a director or principal officer of a corporation is removed under s. 180.0843 (2), 181.0843 (2) or 611.53 (3), the removal shall be reported to the commissioner immediately together with a statement of the reasons for the removal.

611.54(3) (3) Removal by commissioner. If the commissioner finds, after a hearing, that a director or officer has a conflict of interest, is incompetent, untrustworthy or has willfully violated chs. 600 to 646, a rule promulgated under s. 601.41 (3) or an order issued under s. 601.41 (4), and that the conflict of interest, incompetence or the violation endangers the interests of insureds or of the public, the commissioner may order that the director or officer be removed.

611.54 History History: 1971 c. 260; 1979 c. 89, 102; 1989 a. 303; 1997 a. 79.

611.54 Cross-reference Cross-reference: See also s. Ins 6.52, Wis. adm. code.

611.55 611.55 Continuity of management in emergencies.

611.55(1) (1) Purpose. The legislature declares it to be desirable for the general welfare and in particular for the welfare of insurance beneficiaries, policyholders, claimants and others that the business of domestic insurance corporations be continued even in a national emergency. The specific purpose of this section is to facilitate the continued operation of such corporations if a national emergency is caused by an attack on the United States or by a nuclear, atomic or other disaster which makes it impossible or impracticable for a corporation to conduct its business in strict accord with applicable provisions of law, its articles, bylaws or its charter.

611.55(2) (2) Emergency bylaws. The board of any corporation may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws, which shall be operative during such a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes or of the corporation’s articles or charter, make any provision that may be reasonably necessary for operation during the emergency.

611.55(3) (3) Emergency authorizations. If the board of a corporation has not adopted emergency bylaws, the following provisions shall become effective upon the occurrence of a national emergency:

611.55(3)(a) (a) Three directors shall constitute a quorum for the transaction of business at all meetings of the board.

611.55(3)(b) (b) Any vacancy on the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.

611.55(3)(c) (c) If there are no surviving directors, but at least 3 officers of the corporation survive, the 3 officers with the longest term of service shall be the directors and shall possess all of the powers of the previous board and such powers as are granted herein or by subsequently enacted legislation. By majority vote such emergency board may elect other directors. If there are not at least 3 surviving officers, the commissioner shall appoint 3 persons as directors who shall possess all of the powers of the previous board and such powers as are granted herein or by subsequently enacted legislation, and these persons by majority vote may elect other directors.

611.55(4) (4) Succession list. At any time the board of a corporation may, by resolution, provide that in the event of such a national emergency and in the event of the death or incapacity of specified officers of the corporation, such officers shall be succeeded by the persons named or described in a succession list adopted by the board. The list may be on the basis of named persons or position titles, shall establish the order of priority and may prescribe the conditions under which the powers of the office shall be exercised.

611.55(5) (5) Home office. At any time the board of a corporation may, by resolution, provide that in the event of such a national emergency the home office or principal place of business shall be at a location named or described in the resolution. The resolution may provide for alternate locations and establish an order of preference.

611.55 History History: 1971 c. 260.

611.56 611.56 Committees of directors.

611.56(1) (1) Appointment. If the articles or bylaws of a corporation so provide, the board by resolution adopted by a majority of the full board may designate one or more committees, each consisting of at least 3 directors serving at the pleasure of the board. The board may designate one or more directors as alternate members of any committee to substitute for any absent member at any meeting of the committee. Any committee under this section may include one or more nonvoting members who are not directors. The designation of a committee and delegation of authority to it shall not relieve the board or any director of any responsibility imposed by law.

611.56(2) (2) Delegation; major committees. When the board is not in session, a committee satisfying all of the requirements for the composition of a board under s. 611.51 (2) to (4) may exercise any of the powers of the board in the management of the business and affairs of the corporation, including action under ss. 611.60 and 611.61, to the extent authorized in the resolution or in the articles or bylaws; except that any such committee may include 7 or more directors if the corporation has 9 or more directors.

611.56(3) (3) Delegation; ordinary committees. When the board is not in session, a committee not satisfying the requirements of sub. (2) may exercise the powers of the board in the management of the business and affairs of the corporation to the extent authorized in the resolution or in the articles or bylaws, except action in respect to:

611.56(3)(a) (a) Compensation or indemnification of any person who is a director, principal officer or one of the 3 most highly paid employees, and any benefits or payments requiring shareholder or policyholder approval;

611.56(3)(b) (b) Approval of any contract required to be approved by the board under s. 611.60 or 611.61, or of any other transaction in which a director has a material interest adverse to the corporation;

611.56(3)(c) (c) Amendment of the articles or bylaws;

611.56(3)(d) (d) Merger under s. 611.72 or 611.73, stock exchanges under s. 611.71, conversion under s. 611.75 or 611.76, voluntary dissolution under s. 611.74 or transfer of business or assets under s. 611.78;

611.56(3)(e) (e) Any other decision requiring shareholder or policyholder approval;

611.56(3)(f) (f) Amendment or repeal of any action previously taken by the full board which by its terms is not subject to amendment or repeal by a committee;

611.56(3)(g) (g) Dividends or other distributions to shareholders or policyholders, other than in the routine implementation of policy determinations of the full board;

611.56(3)(h) (h) Selection of principal officers; and

611.56(3)(i) (i) Filling of vacancies on the board or any committee created under sub. (1) except that the articles or bylaws may provide for temporary appointments to fill vacancies on the board or any committee, the appointments to last no longer than the end of the next board meeting.

611.56(4) (4) Subsequent review. The full board or a major committee of the board authorized to do so under sub. (2) shall specifically review any transaction in which an officer has a material financial interest adverse to the corporation, at the next meeting following action by any ordinary committee.