CHAPTER 612
TOWN MUTUALS
612.01 Purposes, scope, interpretation and definitions.
612.02 Organization of town mutuals.
612.03 General powers and effect of unauthorized corporate acts.
612.04 Amendments of articles, bylaws and business plan.
612.11 Meetings of members.
612.12 Voting rights of members.
612.13 Directors and officers.
612.15 Supervision of management changes.
612.16 Exclusive agency and management contracts.
612.18 Transactions with affiliates and in which directors and others are interested.
612.21 Merger and consolidation of town mutuals.
612.22 Merger and consolidation of town mutuals into mutual insurance corporations.
612.23 Conversion of town mutuals into mutual insurance corporations.
612.24 Transfer of business.
612.25 Voluntary dissolution of town mutuals.
612.31 Authorized business.
612.35 Borrowing and repayment.
612.52 Undertaking to pay premiums and assessments.
612.61 Licensing of agents.
612.70 Waiver of notice and informal action.
612.71 Organization of reinsurance corporations.
612.81 Register of deeds.
Ch. 612 Cross-reference
Cross-reference: See definitions in ss.
600.03,
610.01 and
628.02.
Ch. 612 Note
NOTE: Chap. 22, laws of 1973, which created this chapter of the statutes, contains notes explaining the revision.
612.01
612.01
Purposes, scope, interpretation and definitions. 612.01(1)(1)
Purposes. The purposes of this chapter are:
612.01(1)(a)
(a) To preserve and encourage cooperative low-cost insurance;
612.01(1)(b)
(b) To establish a framework in which mutuality in its true sense can be preserved, and small mutual corporations can be kept viable;
612.01(1)(c)
(c) To preserve and strengthen the interest of the members in and their control of town mutuals;
612.01(1)(d)
(d) 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
646; and
612.01(1)(e)
(e) To provide financial guaranties sufficient to ensure the solidity of town mutuals, and to encourage them to maintain adequate surpluses.
612.01(2)
(2) Scope. Except as otherwise provided, this chapter applies to all corporations organized under this chapter.
612.01(3)
(3) Interpretation. 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.
612.02
612.02
Organization of town mutuals. 612.02(1)
(1)
Incorporating members. 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.
612.02(2)
(2) Articles of incorporation. The articles shall state:
612.02(2)(a)
(a) The name of the corporation which shall contain the words "Town Mutual";
612.02(2)(b)
(b) The address of the principal office, which may be designated as the residence or business office of the holder of a specified corporate office;
612.02(2)(c)
(c) 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;
612.02(2)(e)
(e) The number of directors and the manner of their selection and of their replacement if there are interim vacancies;
612.02(2)(f)
(f) The titles of the officers, their terms of office and the manner in which they are to be selected;
612.02(2)(g)
(g) The procedures and quorum requirements for the annual and special meetings and the voting rights of the members;
612.02(2)(h)
(h) The general conditions and procedures for levying assessments; and
612.02(2)(i)
(i) The procedures for amending the articles and for adopting and amending bylaws.
612.02(3)
(3) Model articles. The commissioner shall promulgate model articles of incorporation which may be used by any town mutual.
612.02(4)
(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:
612.02(4)(a)
(a) 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;
612.02(4)(b)
(b) The proposed articles which shall be signed by each incorporating member, and the proposed bylaws;
612.02(4)(c)
(c) 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;
612.02(4)(d)
(d) All agreements relating to the corporation to which any incorporating member or any proposed director or officer is a party;
612.02(4)(e)
(e) The amount and sources of the funds available for organization expenses and the proposed arrangements for reimbursement of incorporating members;
612.02(4)(f)
(f) The proposed compensation of directors and officers;
612.02(4)(g)
(g) The plan for conducting the insurance business including:
612.02(4)(g)4.
4. The proposed methods for establishing premium rates and classifications for assessments; and
612.02(4)(i)
(i) Such other relevant documents or information as the commissioner reasonably requires.
612.02(5)(a)(a)
Requirement. 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).
612.02(5)(b)
(b)
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) and
(g), the number of incorporating members, the nature of their properties and financial position and the general economic situation.
612.02(5)(c)
(c)
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.