AB551: Bill Text

AB551, s. 23 Section 23. 644.04 (3) (intro.) of the statutes is amended to read:

AB551,11,4 644.04 (3) (intro.) Subject to s. 611.33, the The converted insurance company , subject to s. 611.33, and any intermediate stock holding company may thereafter issue to 3rd parties debt securities, stock other than voting stock and, subject to s. 644.15, voting stock, so long as all of the following are true:

AB551, s. 24 Section 24. 644.05 (1) of the statutes is amended to read:

AB551,11,7 644.05 (1) Powers. Section 181.04 Subject to s. 644.19 (2) and (3), s. 181.0302 (intro.), (1) to (15), (18) and (19) applies to mutual holding companies.

AB551, s. 25 Section 25. 644.05 (2) of the statutes is amended to read:

AB551,11,11 644.05 (2) Effect of unauthorized corporate acts. Section 181.057 (1) and (2) 181.0304 applies to mutual holding companies , except that, for purposes of this subsection, "attorney general" used in s. 181.0304 (3) means "commissioner".

AB551, s. 26 Section 26. 644.05 (3) of the statutes is repealed.

AB551, s. 27 Section 27. 644.05 (4) of the statutes is amended to read:

AB551,11,17 644.05 (4) Waiver of notice and informal action by members or directors. Sections 181.70 and 181.72 181.0704, 181.0706, 181.0821 and 181.0823 apply to mutual holding companies. For purposes of this subsection, "board" used in s. 181.0821 includes "committee of the board of a mutual holding company".

AB551, s. 28 Section 28. 644.08 of the statutes is amended to read:

AB551,11,20 644.08 Reservation of corporate name. Section 181.07 applies Sections 181.0402 and 181.0403 (2), (3) and (3m) apply to mutual holding companies.

AB551, s. 29 Section 29. 644.09 (1) (intro.) of the statutes is amended to read:

AB551,11,23 644.09 (1) Articles. (intro.) Section 181.31 181.0202 applies to the articles of a mutual holding company, except that all of the following apply:

AB551, s. 30 Section 30. 644.09 (1) (a) of the statutes is amended to read:

AB551,12,2 644.09 (1) (a) The name of the mutual holding company shall include the word "mutual" and shall comply with s. 181.06 (3) 181.0401 (2) to (4).

AB551, s. 31 Section 31. 644.09 (2) of the statutes is amended to read:

AB551,12,20 644.09 (2) Amendment of articles. A mutual holding company may amend its articles in the manner provided in ss. 181.35 to 181.37 and 181.39 181.1001, 181.1002 (1), 181.1003, 181.1005 and 181.1006, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner. The articles may be amended in any desired respect, including substantial changes of its original purposes, except that no amendment may be made that is contrary to sub. (1). In addition to the requirements of s. 181.37 181.1005, the articles of amendment of a mutual holding company shall, if mail voting is used, state the number of members voting by mail and the number of such members voting for and against the amendment. No amendment may become effective until the articles of amendment have been filed with the commissioner. No amendment shall affect any existing cause of action in favor of or against such mutual holding company, any pending suit civil, criminal, administrative or investigatory proceeding to which the mutual holding company is a party or the existing rights of persons other than members. In the event that the corporate name is changed by amendment, no suit brought by or against such mutual holding company under its former name shall abate for that reason.

AB551, s. 32 Section 32. 644.09 (3) of the statutes is amended to read:

AB551,13,2 644.09 (3) Bylaws. The bylaws of a mutual holding company shall comply with this chapter. A copy of the bylaws and any amendments to the bylaws shall be filed with the commissioner within 60 days after adoption. Subject to this subsection, s. 181.13 applies ss. 181.0206, 181.0207 and 181.1021 apply to mutual holding companies.

AB551, s. 33 Section 33. 644.09 (4) of the statutes is amended to read:

AB551,13,5 644.09 (4) Principal officers. Section 181.25 (1) and (2) applies Sections 181.0840 and 181.0841 apply to mutual holding companies.

AB551, s. 34 Section 34. 644.14 (1) of the statutes is amended to read:

AB551,13,9 644.14 (1) Communication to members; member voting. Subject to this section, ss. 611.41, 611.42 (1), (1e), (1m), (2), (3), (4) (a) and (5), 611.43 and 611.53 (2) apply to mutual holding companies.

AB551, s. 35 Section 35. 644.16 (1) of the statutes is amended to read:

AB551,13,17 644.16 (1) Board of directors. Subject to this section, ss. 181.18, 181.21 181.0801 (1) and (2), 181.0802, 181.0811, 611.51 (2), (3), (5) and (8) and 611.53 (1) and (3) apply to mutual holding companies. Section 181.22 181.0824 applies to the board of a mutual holding company except as modified by s. 181.225 611.10. 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. 181.23 and 181.25 (2) 181.0825 and 181.0841.

AB551, s. 36 Section 36. 644.16 (2) of the statutes is amended to read:

AB551,13,20 644.16 (2) Committees of directors. Section 181.23 181.0825 applies to mutual holding companies.

AB551, s. 37 Section 37. 644.16 (3) (a) of the statutes is amended to read:

AB551,13,23 644.16 (3) (a) Section 611.51 (9) (a) (am) and (b) applies to mutual holding companies.

AB551, s. 38 Section 38. 644.16 (4) of the statutes is amended to read:

AB551,14,2 644.16 (4) Director conflicts of interest. Section 181.225 611.60 applies to mutual holding companies.

AB551, s. 39 Section 39. 644.17 of the statutes is amended to read:

AB551,14,5 644.17 Removal of officers. Section 181.26 applies Sections 181.0843 and 181.0844 apply to mutual holding companies.

AB551, s. 40 Section 40. 644.18 of the statutes is amended to read:

AB551,14,9 644.18 Directors' and officers' liability and indemnification. (1) Liability. Sections 181.283 to 181.29 181.0850 to 181.0855, except s. 181.0855 (2) (c), apply to mutual holding companies.

AB551,14,11 (2) Indemnification. Sections 181.041 to 181.051 181.0871 to 181.0881 and 181.0889 apply to mutual holding companies.

AB551,14,12 (3) Insurance. Section 181.053 181.0883 applies to mutual holding companies.

AB551,14,14 (4) Derivative actions. Section 181.295 applies Sections 181.0740 to 181.0747 apply to mutual holding companies.

AB551, s. 41 Section 41. 644.19 of the statutes is amended to read:

AB551,14,17 644.19 Executive compensation. (1) General. Sections 181.19 and Section 611.63 (4) and (5) apply applies to mutual holding companies.

AB551,15,2 (2) Approval by members. A benefit plan or amendment to a benefit plan that proposes to provide benefits in the form of stock or stock options of a converted insurance company or any intermediate stock holding company to the directors or officers of the converted insurance company, intermediate stock holding company or mutual holding company may not take effect unless it is submitted to a vote of the members of the mutual holding company and approved by a majority of the members voting. Notice of a meeting at which a vote under this subsection will be taken shall be given in accordance with s. 181.15, as provided in s. 644.14 (1), or in accordance with s. 644.14 (2).

AB551,15,7 (3) Notice to commissioner. The commissioner may by rule require that any action taken by the board of a mutual holding company, or the board of any intermediate stock holding company, on any of the subjects specified in ss. 181.04 (15) and 181.19 s. 181.0302 (11) to (14) be reported to the commissioner within 30 days after the action is taken.

AB551, s. 42 Section 42. 644.26 of the statutes is repealed and recreated to read:

AB551,15,17 644.26 Transfer of business or assets of mutual holding companies. (1) A sale, lease, exchange or other disposition of less than substantially all of the property and assets of a mutual holding company, and the mortgage or pledge of any or all property and assets of a mutual holding company, whether or not made in the usual and regular course of its affairs, may be made upon the terms and conditions authorized by the mutual holding company's board of directors. Unless otherwise provided by the articles of incorporation, consent of the members is not required for a sale, lease, exchange or other disposition of property, or for a mortgage or pledge of property, authorized under this subsection.

AB551,15,20 (2) A sale, lease, exchange or other disposition of all or substantially all of the property and assets of a mutual holding company may be made upon such terms and conditions as may be authorized in the following manner:

AB551,16,13 (a) If the articles of incorporation give members the right to vote on the sale, lease, exchange or other disposition of all or substantially all of the mutual holding company's property and assets, the board of directors shall adopt a resolution recommending the sale, lease, exchange or other disposition and directing that it be submitted to a vote at an annual or special meeting of the members. Written notice stating that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange or other disposition of all or substantially all of the property and assets of the mutual holding company shall be given to each member entitled to vote at the meeting, within the time and in the manner provided by this chapter for providing notice of member meetings. At the meeting, the members may authorize the sale, lease, exchange or other disposition and may authorize the board of directors to fix any or all of the terms and conditions of the sale, lease, exchange or other disposition. The authorization shall be by the affirmative vote of at least two-thirds of the members present or represented by proxy at the meeting. After the authorization by a vote of the members, the board of directors, nevertheless, in its discretion, may abandon the sale, lease, exchange or other disposition, subject to the rights of 3rd parties under any contracts relating thereto, without further action or approval by the members.

AB551,16,17 (b) If the articles of incorporation do not give members the right to vote on the sale, lease, exchange or other disposition of all or substantially all of a mutual holding company's property and assets, the sale, lease, exchange or other disposition may be authorized by the vote of the majority of the directors in office.

AB551, s. 43 Section 43. 644.28 (1) of the statutes is amended to read:

AB551,16,21 644.28 (1) Plan of dissolution. Subject to this section, ss. 181.50 to 181.54 and 181.555 181.1401 to 181.1407 apply to mutual holding companies, except that the last sentence of s. 181.555 does not apply.

AB551, s. 44 Section 44. 644.28 (2) (a) of the statutes is amended to read:

AB551,17,7 644.28 (2) (a) At least 60 days prior to the submission to members of any proposed voluntary dissolution of a mutual holding company under s. 181.50 181.1401, the plan shall be filed with the commissioner. The commissioner may require the submission of additional information relevant to the effect of the proposed dissolution on the solvency of the converted insurance company. The commissioner shall approve the dissolution unless, after a hearing, the commissioner finds that dissolution of the mutual holding company would cause the converted insurance company to become insolvent, would be unfair or inequitable to the members of the mutual holding company or would not be in the best interests of the policyholders of the converted insurance company or the public.

AB551, s. 45 Section 45. 644.28 (3) of the statutes is amended to read:

AB551,17,12 644.28 (3) Revocation of voluntary dissolution. If the mutual holding company revokes the voluntary dissolution proceedings under s. 181.53 181.1404, a copy of the resolution revoking the voluntary dissolution proceedings adopted under s. 181.53 181.1404 shall be filed with the commissioner.

AB551, s. 46 Section 46. 644.28 (4) of the statutes is amended to read:

AB551,17,21 644.28 (4) Filing and recording articles of dissolution and effect thereof. Upon approval by the commissioner under sub. (2) and by the members under s. 181.50 181.1401, the mutual holding company shall file articles of dissolution with the commissioner. When the articles are filed, the existence of the mutual holding company shall cease, except for the purpose of suits, other proceedings and appropriate corporate action of members, directors and officers as provided in this chapter and in ss. 181.50 to 181.54 and 181.555 181.1401 to 181.1407. Upon the filing of the articles, the commissioner may issue a certificate of dissolution.

AB551, s. 47 Section 47. 644.29 of the statutes is amended to read:

AB551,18,6 644.29 Involuntary dissolution of domestic mutual holding companies. A mutual holding company may at any time during a voluntary dissolution under ss. 181.51 to 181.555 181.1401 to 181.1407 apply to the commissioner to have dissolution continued under the commissioner's supervision , in which case, subject to this section, s. 181.56 (1) and (2) applies to the mutual holding company except that for purposes of this section "attorney general" means the commissioner. Any distribution to members shall be limited in the same manner as under s. 644.28 (5) and any excess over such amounts shall be paid into the state treasury to the credit of the common school fund.

AB551, s. 48 Section 48. 645.68 (intro.) of the statutes is amended to read:

AB551,18,23 645.68 Order of distribution. (intro.) The order of distribution of claims from the insurer's estate shall be as stated in this section. The first $50 of the amount allowed on each claim in the classes under subs. (2) (3) to (6), except for claims of the federal government under subs. (3) and (3c), shall be deducted from the claim and included in the class under sub. (8). Claims may not be cumulated by assignment to avoid application of the $50 deductible provision. Subject to the $50 deductible provision, every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. No subclasses shall be established within any class. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant shall not be included in the classes under subs. (3) and (3m), other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to an employe shall be treated as a gratuity. The claims described in s. 645.69 are among the claims not subject to subs. (3) and (3m).

AB551, s. 49 Section 49. 645.68 (2) of the statutes is renumbered 645.68 (3r).

AB551, s. 50 Section 50. 645.68 (3) of the statutes is amended to read:

AB551,19,15 645.68 (3) Loss claims. All claims under policies for losses incurred, including third party claims, and all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under policies and federal, state and local government claims, except the first $200 of losses otherwise payable to any claimant under this subsection other than the federal government. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds or investment values, shall be treated as loss claims. Claims may not be cumulated by assignment to avoid application of the $200 deductible provision. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to an employe shall be treated as a gratuity. The claims described in s. 645.69 are among the claims not subject to this subsection.

AB551, s. 51 Section 51. 645.68 (3c) of the statutes is created to read:

AB551,19,22 645.68 (3c) Federal government claims and interest. Claims of the federal government not included under sub. (3), and interest at the legal rate compounded annually on all claims in the class under this subsection, and on all claims of the federal government in the class under sub. (3), from the date of the petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared.

AB551, s. 52 Section 52. 645.68 (3m) of the statutes is created to read:

AB551,20,3 645.68 (3m) Certain injury claims. Claims against the insurer that are not under policies and that are for liability for bodily injury or for injury to or destruction of tangible property.

AB551, s. 53 Section 53. 645.68 (3r) (c) of the statutes is created to read:

AB551,20,7 645.68 (3r) (c) Notwithstanding pars. (a) and (b) and subs. (3), (3c) and (3m), if there are no claims of the federal government, the claims in the class under this subsection shall have priority over all claims in the classes under subs. (3) to (11).

AB551, s. 54 Section 54. 645.68 (5) of the statutes is amended to read:

AB551,20,16 645.68 (5) Residual classification. All other claims, including claims of the federal or any state or local government, not falling within other classes under this section and claims described in s. 645.69. Claims, including those of any state or local governmental body, for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims under sub. (8).

AB551, s. 55 Section 55. 645.68 (7) of the statutes is amended to read:

AB551,20,25 645.68 (7) Interest on claims already paid. Interest at the legal rate compounded annually on all claims in the classes under subs. (1) to (6), except for claims of the federal government in the classes under subs. (3) and (3c), from the date of the petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared. The liquidator, with the approval of the court, may make reasonable classifications of claims for purposes of computing interest, may make approximate computations and may ignore certain classifications and time periods that are trifling.

AB551, s. 56 Section 56. 645.68 (8) (a) of the statutes is amended to read:

AB551,21,4 645.68 (8) (a) The Except for claims of the federal government under subs. (3) and (3c), the first $50 of each claim in the classes under subs. (2) (3) to (6) subordinated under this section;.

AB551, s. 57 Section 57. 645.68 (8) (b) of the statutes is amended to read:

AB551,21,6 645.68 (8) (b) Claims under s. 645.63 (2); .

AB551, s. 58 Section 58. 645.68 (8) (c) of the statutes is amended to read:

AB551,21,8 645.68 (8) (c) Claims subordinated by s. 645.90;.

AB551, s. 59 Section 59. 645.68 (8) (d) of the statutes is amended to read:

AB551,21,10 645.68 (8) (d) Claims filed late;.

AB551, s. 60 Section 60. 645.68 (8) (e) of the statutes is amended to read:

AB551,21,12 645.68 (8) (e) Portions of claims subordinated under sub. (5);.

AB551, s. 61 Section 61. 645.68 (8) (f) of the statutes is amended to read:

AB551,21,15 645.68 (8) (f) Claims or portions of claims payment of which is provided by other benefits or advantages recovered or recoverable by the claimant; and.

AB551, s. 62 Section 62. 646.13 (1) (b) (intro.) of the statutes is renumbered 646.13 (1) (b) and amended to read:

AB551,21,22 646.13 (1) (b) Stand in the position of the insurer in the investigation, compromise, settlement, denial and payment of claims under s. 646.31 and the defense of 3rd party claims against insureds, subject to the limitations of s. 645.43. The board shall consult and cooperate with the liquidator in carrying out these duties. The board has no duties or liabilities with respect to any claim filed as follows:

AB551, s. 63 Section 63. 646.13 (1) (b) 1. of the statutes is renumbered 646.13 (3) (a) and amended to read:

AB551,22,5 646.13 (3) (a) With the liquidator under s. 645.61 after the date for filing specified by the liquidator under s. 645.47 (2), unless the liquidator determines that the claim is considered to have been timely filed under s. 645.61 (2) and the claim participates fully in the same every distribution to the same extent as other timely filed claims in the same class.

AB551, s. 64 Section 64. 646.13 (1) (b) 2. of the statutes is renumbered 646.13 (3) (b) and amended to read: