Payment of the principal or interest on mutual bonds or contribution notes may be made in whole or in part only after approval of the commissioner. Approval shall be given if all financial requirements of the issuer to do the insurance business it is then doing will continue to be satisfied after payment and if the interests of its insureds and the public are not endangered. In the event of liquidation under ch. 645
unpaid amounts of principal and interest on contribution notes shall be subordinated to the payment of principal and interest on any mutual bonds issued by the corporation at any time.
Nothing in this section prevents a mutual from borrowing money on notes which are its general obligations, nor from pledging any part of its disposable assets therefor.
Corporate repurchase of shares.
No stock corporation may repurchase any of its own shares within 5 years after initial issuance of the certificate of authority, except pursuant to a plan for the repurchase which has been approved by the commissioner. After 5 years a stock corporation may repurchase its own shares under ss. 180.0631
, and 180.1708 (2)
, but within 10 days after the end of any month in which it purchases more than one percent of any class of its outstanding shares the corporation shall report the price and the names of the registered shareholders from whom the shares are acquired and of any other persons beneficially interested, so far as the latter are known to the corporation. The corporation shall make a like report within 10 days after the end of any 3-month period in which it purchases more than 2 percent of any class of its outstanding shares or within 10 days after the end of any 12-month period in which it purchases more than 5 percent of any class of its outstanding shares.
Number of shareholders.
applies to stock corporations for purposes of this chapter.
History: 1989 a. 303
MANAGEMENT OF INSURANCE CORPORATIONS
Shareholders' meetings. 611.40(1)(1)
Meetings, notices, quorums and voting.
and 180.1708 (3)
apply to stock corporations. Each director of a stock corporation shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.
Communications to shareholders or policyholders and commissioner's attendance at meetings. 611.41(1)(1)
Copies of communications.
The commissioner may by rule prescribe that copies of specified classes of communications circulated generally by a corporation to shareholders or policyholders shall be communicated to the commissioner at the same time.
(2) Attendance at meetings.
The commissioner has the right to attend any shareholders' or policyholders' meeting.
and, so far as it relates to communications to shareholders, sub. (1)
do not apply to stock corporations all of whose voting shares are owned by a single person, or all of whose shareholders are either members of the board or are represented on it.
History: 1971 c. 260
; 1979 c. 102
s. 236 (21)
Mutual policyholders' voting rights. 611.42(1e)(a)
The circuit court for the county where a mutual's principal office is located, or, if the mutual does not have its principal office in this state, where its registered office is located, may, after notice and an opportunity to be heard, order a meeting to be held on petition of a policyholder of the mutual who meets any of the following conditions:
The policyholder is entitled to participate in an annual meeting and the annual meeting has not been held within 15 months after the mutual's last annual meeting.
The policyholder has signed a demand for a special meeting that meets the requirements of s. 181.0702
and the mutual has failed to do any of the following:
Give notice of the special meeting within 30 days after the date that the demand was delivered to the mutual.
The court may fix the time and place of the meeting. The court shall require that the meeting be called and conducted in accordance with the mutual's articles of incorporation and bylaws, in so far as possible, except that the court may do all of the following:
Fix the quorum required for specific matters to be considered at the meeting or direct that the votes represented at the meeting constitute a quorum for action on those matters.
Enter any other orders necessary to accomplish the purpose of the meeting.
Mandatory voting rights.
Policyholders in all mutuals have the right to vote on conversion, voluntary dissolution, amendment of the articles, and the election of all directors except public directors appointed under s. 611.53 (1)
. Voting may be conducted by mail, by electronic means, or by any other method or combination of methods prescribed by the articles or bylaws. Directors may be divided into classes, and in that case one class shall be elected at least every 4 years for terms not exceeding 6 years.
Optional voting rights.
The articles of any mutual may give the policyholders additional voting rights.
(3) Voting procedures.
The articles or bylaws shall contain rules governing voting eligibility consistent with sub. (2)
and voting procedures. No amendment to the rules may be effective until at least 30 days after it has been filed with the commissioner.
The articles may provide for regular or special meetings of the policyholders, or elections in lieu of meetings.
Notice of the time and place of regular meetings or elections shall be given to each policyholder by printing it conspicuously on each policy or in such other reasonable manner as the commissioner approves or requires.
(5) Representative assembly.
The articles may provide that representatives or delegates be selected by the policyholders to represent specific geographical districts, or otherwise to represent defined classes of policyholders, determined on a reasonable basis. After the representative assembly has been selected by the policyholders, the assembly may choose replacements for members unable to complete their terms, if the articles so provide. The vote of a representative shall be treated as the vote of the policyholders he or she represents.
Mutual policyholders' proxy voting. 611.425(1)(1)
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.
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.
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.
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.
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.
(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.
An appointment of a proxy is revocable unless the appointment form or, if authorized, electronic transmission states that it is irrevocable.
The appointment of a proxy is revoked if the policyholder appointing the proxy does any of the following:
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.
(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.
(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.
History: 2013 a. 279
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.
History: 1971 c. 260
Board of directors. 611.51(2)(a)
Except under pars. (b)
, 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.
During the first 5 years after initial issuance of a certificate of authority, a corporation shall have at least 5 directors.
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.
(3) Inside directors.
Employees and representatives of a corporation may not constitute a majority of its board.
(4) Subsidiaries and closely held corporations.
Subsections (2) (a)
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.
(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.
(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
(7) Quorum and voting.
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
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.
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.
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.
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.
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.
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]
Election and removal of directors and officers of stock corporations. 611.52(2)
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.
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.
(2) Election of directors.
Directors not to be chosen under sub. (1)
shall be elected by the policyholders.
(3) Resignation, vacancies and removal of directors.
Subject to subs. (1)
, ss. 181.0807
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.