Meetings of members.
Voting rights of members.
Directors and officers.
Supervision of management changes.
Exclusive agency and management contracts.
Transactions with affiliates and in which directors and others are interested.
Merger of town mutuals.
Merger of town mutuals and mutual insurance corporations.
Conversion of town mutuals into mutual insurance corporations.
Transfer of business.
Voluntary dissolution of town mutuals.
Borrowing and repayment.
Undertaking to pay premiums and assessments.
Licensing of agents.
Waiver of notice and informal action.
Register of deeds.
Ch. 612 Cross-reference
See definitions in ss. 600.03
Ch. 612 Cross-reference
See also ch. Ins 13
, Wis. adm. code.
Purposes, scope, interpretation and definitions. 612.01(1)(1)
The purposes of this chapter are:
To preserve and encourage cooperative low-cost insurance;
To establish a framework in which mutuality in its true sense can be preserved, and small mutual corporations can be kept viable;
To preserve and strengthen the interest of the members in and their control of town mutuals;
To enable town mutuals to satisfy as many of the essential insurance needs of their members as is consistent with the other objectives of chs. 600
To provide financial guaranties sufficient to ensure the solidity of town mutuals, and to encourage them to maintain adequate surpluses.
Except as otherwise provided, this chapter applies to all corporations organized under this chapter.
Whenever a section of ch. 611
is applied to town mutuals by this chapter, the portion to be applied is that portion applicable to a mutual under ch. 611
Organization of town mutuals. 612.02(1)(1)
A town mutual may be organized by 100 or more adult natural persons each of whom owns an interest in a separate insurable risk in the territory described in sub. (2) (c)
, and each of whom agrees to insure those risks in the town mutual, at least against damage by fire.
(2) Articles of incorporation.
The articles shall state:
The address of the principal office, which may be designated as the residence or business office of the holder of a specified corporate office;
The territory within which the corporation plans to operate which may not exceed 8 contiguous counties, except that the commissioner may authorize a broader territory aggregating no more than 16 contiguous counties;
The number of directors and the manner of their selection and of their replacement if there are interim vacancies;
The titles of the officers, their terms of office and the manner in which they are to be selected;
The procedures and quorum requirements for the annual and special meetings and the voting rights of the members;
The general conditions and procedures for levying assessments; and
The procedures for amending the articles and for adopting and amending bylaws.
(3) Model articles.
The commissioner shall promulgate model articles of incorporation which may be used by any town mutual.
(4) Application for certificate of authority.
The incorporating members shall file with the commissioner an application for a certificate of authority which shall be signed by or on behalf of each incorporating member and shall include or have attached:
The names and addresses of all incorporating members and, for the preceding 10 years, the names, all addresses and all occupations of all proposed directors and officers;
The proposed articles which shall be signed by each incorporating member, and the proposed bylaws;
The affidavit of 2 incorporating members stating that they are personally acquainted with all incorporating members and know them to be owners of property described under sub. (1)
and to be the signers of the application and the articles;
All agreements relating to the corporation to which any incorporating member or any proposed director or officer is a party;
The amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement of incorporating members;
The proposed compensation of directors and officers;
The plan for conducting the insurance business including:
The proposed methods for establishing premium rates and classifications for assessments;
Such other relevant documents or information as the commissioner reasonably requires.
The incorporating members shall pay in or procure an initial surplus in an amount at least as large as that specified by the commissioner. The amount specified by the commissioner shall be sufficient to permit the town mutual to commence business and to protect the members in case initial losses are unexpectedly high, but may not be less than $100,000 nor more than $200,000. The surplus may be provided by gifts or by contribution notes bearing interest at a rate approved by the commissioner and repayable under par. (c)
Factors determining amount of initial required surplus.
In determining the amount of initial required surplus, the commissioner shall consider all factors relevant to the financial needs of the corporation, including the matters specified in sub. (4) (e)
, the number of incorporating members, the nature of their properties and financial position and the general economic situation.
Repayment of contribution notes.
No payment on principal or interest on contribution notes may be made without approval of the commissioner. The commissioner shall approve if after payment there will remain surplus in an amount sufficient for the continuing needs of the corporation and to satisfy all other requirements of the law.
(6) Certificate of authority.
The commissioner shall issue a certificate of authority if he or she:
Finds that all requirements of law have been met;
Is satisfied that the proposed directors and officers are trustworthy and individually competent for the tasks assigned them and that collectively they have the competence and experience to administer the affairs of the proposed town mutual;
Is satisfied that the total amount initially at risk and its distribution permit a sound insurance operation; and
Is satisfied that the business plan is consistent with the interests of the members and of the public.
(7) Contents of certificate.
The certificate of authority shall specify the territories and types of insurance authorized and the surplus required under sub. (5)
(8) Effect of certificate.
Upon issuance of the certificate of authority, the town mutual shall have legal existence.
Amendments of articles, bylaws and business plan. 612.04(1)(1)
Right to amend articles and make and amend bylaws.
apply to town mutuals. A town mutual may make and amend bylaws as provided by the articles or, in the absence of any such provision, in the same manner as the articles may be made or amended.
(2) Approval required.
No change in the articles or bylaws or in the business plan is effective until approved by the commissioner, nor may a town mutual depart from its business plan except with the commissioner's approval. No change may be made inconsistent with s. 612.02 (2)
. Section 181.1008
applies to town mutuals.
(3) Grounds for disapproval.
The commissioner shall approve the change unless he or she finds, after a hearing, that it would be:
Inconsistent with the interests of the members or of the public.