Chapter 614

614.24(1m)(a)2. 2. The fraternal submits to the commissioner written evidence that the federal securities and exchange commission will not approve the policy, certificate of insurance or contract unless it is exempt from all or part of the requirements of ss. 614.19 (3) and 632.93 (2).

614.24(1m)(b) (b) Extent of exemption. A waiver issued under par. (a) shall exempt a policy, certificate of insurance or contract from ss. 614.19 (3) and 632.93 (2) only to the extent necessary to obtain the federal security exchange commission’s approval of the policy, certificate of insurance or contract.

614.24(2) (2) Special affiliates.

614.24(2)(a) (a) Local lodges. A local lodge may incorporate under ch. 181 or the corresponding law of the state where it is located, to carry out the noninsurance activities of the local lodge.

614.24(2)(b) (b) Institutions for carrying out fraternal activities. Corporations may be formed under ch. 181 to implement s. 614.82 (2).

614.24 History History: 1975 c. 373; 1987 a. 361.

614.28 614.28 Changes in business plan. Section 611.28 applies to fraternals.

614.28 History History: 1975 c. 373.

614.29 614.29 Amendment of articles of incorporation.

614.29(1) (1) Right to amend articles. The articles of a fraternal may provide for amendment by the supreme governing body or by the board of directors, and may provide also for amendment by the members by referendum. If amendment is by referendum, a majority of those members who vote must vote affirmatively. Votes cast within 60 days from the date of mailing of the ballots by the fraternal shall be counted. The timeliness of a vote is determined by the date of its mailing as proved by its postmark or other suitable evidence.

614.29(2) (2) Filing. For 5 years after the initial issuance of a certificate of authority, proposed amendments of the articles which are not changes in the business plan shall be filed with the commissioner at least 30 days before the amendment is submitted for approval to the members or to the supreme governing body, or if neither is required, at least 30 days before its effective date.

614.29(3) (3) Filing of articles of amendment. No amendment is effective until the articles of amendment are filed with the commissioner, together with a statement of the results of the voting on the amendment.

614.29(4) (4) Publication to members. Within 4 months after the filing of the articles of amendment with the commissioner, they shall be furnished to all members either by mail or under s. 614.41 (1).

614.29 History History: 1975 c. 373; 1979 c. 102; 2009 a. 342.

subch. III of ch. 614 SUBCHAPTER III

SECURITIES OF FRATERNALS

614.31 614.31 Securities regulation. Section 611.31 applies to fraternal bonds but does not apply to contribution notes, as they are defined in s. 611.33 as incorporated by s. 614.33.

614.31 History History: 1975 c. 373.

614.33 614.33 Authorized securities. Section 611.33 (2) applies to fraternals, except that the words “mutual” and “nonassessable mutual” shall be read “fraternal”.

614.33 History History: 1975 c. 373.

subch. IV of ch. 614 SUBCHAPTER IV

MANAGEMENT OF FRATERNALS

614.41 614.41 Communications to members.

614.41(1) (1) Official publications. A fraternal may provide in its laws for an official publication in which any notice, report, or statement required by law to be given to members, including notice of election, may be published. It shall be printed conspicuously in the publication.

614.41(2) (2) Copies to commissioner. The commissioner may by rule prescribe that copies of specified classes of communications published generally to members, including the official publication, shall be communicated to the commissioner at the same time they are sent to the members.

614.41(3) (3) Duplicate publications. If the records of a fraternal show that 2 or more members have the same mailing address, an official publication mailed to one member is deemed to be mailed to all members at the same address unless a member requests a separate copy.

614.41 History History: 1975 c. 373, 421.

614.42 614.42 Representative form of government.

614.42(1) (1) Supreme governing body. The fraternal shall have a supreme governing body consisting either of:

614.42(1)(a) (a) Board of directors. A board with some directors elected directly by the members or by their representatives in intermediate assemblies under sub. (2), and other directors prescribed in the fraternal’s laws. The elected directors shall constitute a majority in number and not less than the number of votes required to amend those articles or bylaws of the fraternal that can be amended without consent of the members. The board shall meet at least quarterly to conduct the business of the fraternal. The elected directors shall be elected on a plan that ensures equal weight to each fraternal member’s vote. Voting may be conducted by mail, by electronic means, or by any other method or combination of methods approved by the board and prescribed in the fraternal’s bylaws.

614.42(1)(b) (b) Assembly. Delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates prescribed in the fraternal’s laws. The elected delegates shall constitute a majority in number and shall not have less than two-thirds of the votes and not less than the number of votes required to amend the articles or bylaws that can be amended without consent of the members. The assembly, whatever designated, shall meet at least once every 4 years and shall elect a board of directors to conduct the business of the fraternal between meetings of the assembly. The delegates making up the supreme governing body shall be elected on a plan that ensures equal weight to each fraternal member’s vote.

614.42(2) (2) Intermediate assemblies. The laws of a fraternal may provide that delegates to intermediate assemblies may represent geographical districts or lodges or represent the members in defined classes determined on a reasonable basis and that the vote of a representative to an intermediate assembly shall be treated as the vote of the members represented.

614.42(3) (3) Voting procedure. No votes may be cast by proxy.

614.42 History History: 1975 c. 373, 421; 2009 a. 342.

614.43 614.43 Annual report to fraternal members. Every domestic fraternal shall send to each member having insurance or publish in the official publication under s. 614.41 (1) an annual report which shall contain basic financial and operating data, information about important business and corporate developments and such other information as the fraternal wishes to include or as the commissioner by rule requires it to include in order to keep members adequately informed.

614.43 History History: 1975 c. 373; 1979 c. 102.

614.51 614.51 Board of directors.

614.51(1) (1) General. Sections 181.0801 (1) and (2) and 181.0802 apply to fraternals, except that the supreme governing body may act as the board of directors if it meets at least quarterly. Section 611.51 (2) to (9) applies to fraternals, except that the word “mutual” shall be read “fraternal” and the references to other sections of ch. 611 shall be to the corresponding sections of this chapter.

614.51(2) (2) Terms of directors and officers. The terms of directors and officers may not exceed 4 years.

614.51 History History: 1975 c. 373; 1997 a. 79.

614.53 614.53 Removal of directors and officers and filling of vacancies. 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 or may be removed under ss. 181.0843 (2) and 181.0844. Any vacancy occurring in the board, including a vacancy created by an increase in the number of directors, may be filled until the next succeeding regular election by the affirmative vote of a majority of the directors then in office, although less than a quorum. If the laws of the fraternal provide that at least two-thirds of the directors are elected by the members, elected director vacancies may be filled for the remainder of the terms for which there is a vacancy. If the vacancy is one to be filled in some manner other than by a regular election, the election by the board is effective only until a reasonable time has elapsed for choosing the director in that other manner. In the event that the board of directors ceases to exist and there are no members having voting rights, the members without voting rights shall thereupon have power to elect a new board. A director elected under this section to fill the unexpired term of an elected director is an elected director within the meaning of s. 614.42 (1) (a).

614.53 History History: 1975 c. 373; 1979 c. 102; 1997 a. 79.

614.54 614.54 Supervision of management changes. Section 611.54 applies to fraternals.

614.54 History History: 1975 c. 373.

614.55 614.55 Continuity of management in emergencies. Section 611.55 applies to fraternals.

614.55 History History: 1975 c. 373.

614.56 614.56 Committees of directors. Section 611.56 applies to fraternals, except that reference therein to other sections of ch. 611 shall be to the corresponding sections of this chapter.

614.56 History History: 1975 c. 373.

614.57 614.57 Interlocking directorates and other relationships. Section 611.57 applies to fraternals.

614.57 History History: 1975 c. 373.

614.60 614.60 Transactions with affiliates and in which directors and others are interested. Sections 611.60 and 611.61 apply to fraternals except that local lodges are not required to keep detailed records under s. 611.61 (1) (b) if the fraternal does so.

614.60 History History: 1975 c. 373; 1979 c. 102.

614.62 614.62 Directors’ liability and indemnification. Section 611.62 applies to fraternals, except that the word “mutual” shall be read “fraternal”.

614.62 History History: 1975 c. 373.

614.63 614.63 Executive compensation. Section 611.63 applies to fraternals, except that the word “mutual” shall be read “fraternal”.

614.63 History History: 1975 c. 373.

614.66 614.66 Exclusive agency contracts and management contracts. Sections 611.66 and 611.67 apply to fraternals, except that the reference to s. 611.26 (1) contained in s. 611.66 is to that section as incorporated by s. 614.24.

614.66 History History: 1975 c. 373; 1997 a. 252.

subch. V of ch. 614 SUBCHAPTER V

CORPORATE REORGANIZATION

614.73 614.73 Merger and consolidation of fraternals.

614.73(1) (1) Authorization, domestic fraternals. Any 2 or more domestic fraternals may merge or consolidate under the provisions of subs. (3) and (4).

614.73(2) (2) Authorization, domestic and nondomestic fraternals. Any 2 or more domestic and nondomestic fraternals may merge or consolidate under the provisions of sub. (5).

614.73(3) (3) Procedure for domestic fraternals. The supreme governing body of each domestic fraternal proposing to merge or consolidate shall:

614.73(3)(a) (a) At least 60 days prior to the proposed action submit the text of the proposed contract to its members in the manner provided by s. 614.29 (4);

614.73(3)(b) (b) Approve the proposed consolidation or merger by a two-thirds vote; and

614.73(3)(c) (c) File with the commissioner a certified copy of the written contract containing in full the terms and conditions of the consolidation or merger, a sworn statement by the president and secretary or corresponding officers of each fraternal showing the financial condition of each on a date to be fixed by the commissioner but no earlier than the December 31 of the year preceding the proposed contract, and evidence of compliance with pars. (a) and (b).

614.73(4) (4) Issuance of certificate by commissioner. The commissioner shall issue a certificate approving the merger or consolidation, upon a finding that:

614.73(4)(a) (a) The contract conforms to the provisions of this chapter;

614.73(4)(b) (b) The parties to the proposed contract have complied with the provisions of sub. (3); and

614.73(4)(c) (c) The proposed contract is just and equitable to the members of each fraternal.

614.73(5) (5) Procedure for nondomestic fraternals. Where a nondomestic fraternal is a party to the proposed contract, the parties shall follow the procedure for domestic fraternals under subs. (3) and (4), but the commissioner may not issue a certificate of compliance until the parties file a certificate that the proposed contract has been approved in the manner provided by the laws of the jurisdiction under which the fraternal is incorporated, or, if such laws contain no procedure for approval, that the proposed contract has been approved by the commissioner of insurance for that jurisdiction.

614.73(6) (6) Effective date. The merger or consolidation is effective when the commissioner issues a certificate of approval.

614.73(7) (7) Effect of consolidation or merger. When the merger or consolidation is effective, the surviving or new fraternal shall have all the assets and be liable for all of the obligations of each of the participating fraternals.

614.73 History History: 1975 c. 373, 421; 1979 c. 102.

614.74 614.74 Voluntary dissolution of solvent domestic fraternals.

614.74(1) (1) Plan of dissolution. At least 60 days prior to the submission to the supreme governing body or the members of any proposed voluntary dissolution, the proposal shall be filed with the commissioner. The commissioner may require the submission of additional information necessary to establish the financial condition of the fraternal or other facts relevant to the proposed dissolution. If the supreme governing body or the members adopt the resolution to dissolve by a majority of those voting or such larger number as the laws of the fraternal require, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the fraternal. The commissioner shall approve the dissolution unless finding, after a hearing, that it is insolvent or may become insolvent in the process of dissolution. Upon approval, the fraternal may dissolve under ss. 181.1401 to 181.1407. Upon disapproval, the commissioner shall petition the court for liquidation under s. 645.41 (10).

614.74(2) (2) Conversion to involuntary liquidation. The fraternal may at any time during the liquidation under ss. 181.1401 to 181.1407 apply to the commissioner to have the liquidation continued under the commissioner’s supervision; thereupon the commissioner shall apply to the court for liquidation under s. 645.41 (10).

614.74(3) (3) Revocation of voluntary dissolution. If the fraternal revokes the voluntary dissolution proceedings under s. 181.1404, a copy of the revocation of voluntary dissolution proceedings shall be filed with the commissioner.

614.74 History History: 1975 c. 373, 421; 1979 c. 102; 1997 a. 79.

614.76 614.76 Voluntary conversion of fraternals to mutuals. A domestic fraternal may be converted into a mutual, as follows:

614.76(1) (1) Action by board or supreme governing body. The board or the supreme governing body shall adopt a plan of conversion stating:

614.76(1)(a) (a) The reasons for and the purposes of the proposed action;

614.76(1)(b) (b) The proposed terms, conditions and procedures and the estimated expenses of implementing the conversion;

614.76(1)(c) (c) The proposed name of the corporation; and

614.76(1)(d) (d) The proposed articles and bylaws.

614.76(2) (2) Disagreement. If the board and the supreme governing body disagree on the conversion plan, the decision of the latter shall govern.

614.76(3) (3) Approval by commissioner. The plan shall be filed with the commissioner for approval, together with so much of the information under s. 611.13 (2) as the commissioner reasonably requires. The commissioner shall approve the plan unless finding, after a hearing, that it would be contrary to the law, that the new mutual would not satisfy the requirements for a certificate of authority under s. 611.20 or that the plan would be contrary to the interests of members or the public.

614.76(4) (4) Approval by members. After being approved by the commissioner, the plan shall be submitted for approval to the persons who were voting members on the date of the commissioner’s approval under sub. (3). At least a majority of the votes cast must be in favor of the plan, or a larger number if required by the laws of the fraternal.