612.13(1m)(a)2.
2. Employees and representatives of a town mutual may not constitute a majority of its board.
612.13(1m)(b)
(b) Notwithstanding
par. (a), the commissioner may allow a town mutual an extension of up to one year to come into compliance with the requirements under
par. (a).
612.13(2)
(2) Election. At each annual meeting one class of directors shall be elected by and from among the members for a term of 3 years.
612.13(3)
(3) Duties. The board shall manage the business and affairs of the corporation and shall not delegate its power or responsibility to any person except as specifically provided otherwise in this chapter.
612.13(4)
(4) Adjustment committee. The directors shall annually appoint from their own number an adjustment committee of at least 3 persons, to adjust or supervise the adjustment of losses under
s. 612.53.
612.13(5)
(5) Directors' liability and indemnification. Directors who willfully neglect or refuse for 30 days to perform their duties under
s. 612.54 shall be jointly and severally liable to any person sustaining loss by their nonfeasance.
Section 611.62 applies to town mutuals.
612.13(6)(a)(a)
Directors. 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. The vote of two-thirds of the members of the town mutual present at a meeting called for the purpose may remove a director from office with or without cause.
612.14
612.14
Reports. The secretary and the treasurer shall present to the annual meeting written reports showing the condition of the town mutual on the previous December 31 and its activity during the preceding calendar year, including:
612.14(1)
(1) The number of policies issued and in force by line of insurance;
612.14(2)
(2) The aggregate amount insured by line of insurance;
612.14(3)
(3) The amount of cash and other assets on hand;
612.14(4)
(4) The amount received during the year from premiums, and the reserve for unearned premiums;
612.14(5)
(5) The amounts received from each separate assessment;
612.14(6)
(6) The amounts assessed but not collected;
612.14(7)
(7) The amounts received from other sources;
612.14(9)
(9) A detailed list of every item of expense, except that the report may summarize the expenses, if they are audited by a committee of members or by an independent person in a manner approved by the commissioner;
612.14(10)
(10) The amount of losses incurred but not paid;
612.14(11)
(11) Any other outstanding liabilities, including debit balances with spread loss organizations or other reinsurers; and
612.14(12)
(12) Any other information required to be presented by the articles or bylaws or by the commissioner.
612.14 History
History: 1973 c. 22.
612.15
612.15
Supervision of management changes. 612.15(1)(a)(a) Report. The name and residence of each person selected as a director or officer of a town mutual, and such pertinent biographical data and financial information as the commissioner may reasonably require by rule, shall be reported to the commissioner immediately after the selection.
612.15(1)(b)
(b) Disapproval. The commissioner, after a hearing called within 30 days after receipt of a report under
par. (a), may disapprove any person selected who for any reason is unqualified to serve, who is not trustworthy or who lacks the competence and experience necessary to discharge his or her responsibilities.
612.15(2)
(2) Report of removal. Whenever the board or a member's meeting removes a director or officer under
s. 612.13 (6) or otherwise before the expiration of his or her term, the board shall promptly report to the commissioner the removal and a statement of the reasons therefor.
612.15(3)
(3) Removal by commissioner. If the commissioner finds, after a hearing, that a director or officer is for any reason unqualified to serve, is incompetent or untrustworthy, or has willfully violated
chs. 600 to
646, a rule promulgated under
s. 601.41 (3) or an order issued under
s. 601.41 (4), and that thereby the interests of members or of the public are endangered, the commissioner shall by order remove the director or officer.
612.15(4)
(4) Changes of place of office. If the articles designate the residence or business address of a specified corporate officer as the place of the principal office of the town mutual, any change of such address shall be reported promptly to the commissioner.
612.16
612.16
Exclusive agency and management contracts. Sections 611.66 and
611.67 apply to town mutuals.
612.16 History
History: 1973 c. 22.
612.18
612.18
Transactions with affiliates and in which directors and others are interested. Sections 611.60 and
611.61 apply to town mutuals.
612.18 History
History: 1973 c. 22;
1979 c. 102.
612.21
612.21
Merger of town mutuals. 612.21(1)
(1)
Conditions for merger. Two or more town mutuals authorized to operate in all or part of the same or in contiguous territories not exceeding 16 counties altogether may merge into one of the constituent town mutuals, or into a new town mutual, under the procedure provided in this section.
612.21(2)
(2) Plan of merger. The board of each participating town mutual shall adopt the same plan of merger by resolution stating:
612.21(2)(a)
(a) The reasons for and the purposes of the proposed action;
612.21(2)(b)
(b) The proposed terms, conditions and procedures for and estimated expenses of implementing the merger;
612.21(2)(c)
(c) The proposed name of the surviving or new town mutual and the location of its principal office; and
612.21(2)(d)
(d) The proposed articles and bylaws for the surviving or new town mutual.
612.21(3)
(3) Approval by commissioner. Each of the participating town mutuals shall file with the commissioner for approval a copy of the resolution and any explanatory statement proposed to be issued to the members, together with so much of the information under
s. 612.02 (4) for the surviving or new town mutual as the commissioner reasonably requires. The commissioner shall approve the plan unless he or she finds, after a hearing, that it would be contrary to the law, or that the surviving or new town mutual would not satisfy the requirements for a certificate of authority under
s. 612.02 (6), or that the plan would be contrary to the interests of insureds or of the public.
612.21(4)
(4) Approval by members. After being approved by the commissioner under
sub. (3), the plan shall be submitted for approval to the members of each participating town mutual in a special joint meeting to be held within the territorial limits of one of the participating town mutuals. The members of each town mutual shall vote separately.
612.21(6)
(6) Reports to commissioner. Each participating town mutual shall file with the commissioner a copy of the resolution adopted under
sub. (4), stating the number of members entitled to vote, the number of members voting and the number of votes cast in favor of the plan, stating separately in each case the mail votes and the votes cast in person.
612.21(7)
(7) Certificate of authority. If the requirements of the law are met, the commissioner shall issue a certificate of authority to the surviving town mutual. Thereupon the nonsurviving town mutuals shall cease their legal existence. The surviving town mutual shall have all the assets and be liable for all of the obligations of each of the participating town mutuals.
612.22
612.22
Merger of town mutuals and mutual insurance corporations. 612.22(1)(1)
Conditions for merger. One or more town mutuals may merge with a single domestic mutual under
ch. 611. If the domestic mutual is nonassessable, the surviving corporation shall be a mutual under
ch. 611. If the domestic mutual is assessable, the surviving corporation may be either a mutual under
ch. 611 or a town mutual under this chapter.
612.22(2)
(2) Plan of merger. The board of each participating corporation shall adopt the same plan of merger under
s. 181.1101 (2), by resolution stating:
612.22(2)(a)
(a) The reasons for and the purposes of the proposed action;
612.22(2)(b)
(b) The proposed terms, conditions and procedures for and estimated expenses of implementing the merger;
612.22(2)(c)
(c) The proposed name of the surviving or new corporation and the location of its principal office; and
612.22(2)(d)
(d) The proposed articles and bylaws for the surviving or new corporation.
612.22(3)(a)(a) Each of the participating corporations shall file with the commissioner for approval a copy of the resolution and any explanatory material proposed to be issued to the members who have the right to vote on the merger under
sub. (4), together with so much of the information under
s. 611.13 (2) or
612.02 (4), whichever is appropriate, for the surviving or new corporation as the commissioner reasonably requires. The commissioner shall approve the plan unless he or she finds, after a hearing, that it would be contrary to the law, or that the surviving or new corporation would not satisfy the requirements for a certificate of authority under
s. 611.20 or
612.02 (6), whichever is appropriate, or that the plan would be contrary to the interest of insureds or of the public.
612.22(3)(b)
(b) If the surviving corporation will be a town mutual, the plan filed with the commissioner under
par. (a) shall include a time schedule for bringing the surviving corporation into compliance with this chapter. The commissioner may approve a reasonable time schedule that does not exceed 3 years.
612.22(4)
(4) Approval by members of the mutuals. After being approved by the commissioner under
sub. (3), the plan shall be submitted for approval to the members of the participating town mutual or mutuals and to the members of the participating domestic mutual if the domestic mutual is assessable. The members of each participating mutual who have the right to vote on the merger shall vote separately.
612.22(6)
(6) Reports to commissioner. Each participating mutual, the members of which have the right to vote under
sub. (4), shall file with the commissioner a copy of the resolution adopted under
sub. (4), stating the number of members entitled to vote, the number of members voting, and the number of votes cast in favor of the plan, stating separately in each case the mail votes and the votes cast in person.
612.22(7)
(7) Certificate of authority. If the requirements of the law are met, the commissioner shall issue a certificate of authority to the surviving mutual. Thereupon the nonsurviving corporations shall cease their legal existence. The surviving mutual shall have all the assets and be liable for all of the obligations of each of the participating corporations.
612.23
612.23
Conversion of town mutuals into mutual insurance corporations. One or more town mutuals may be converted into a single mutual insurance corporation under
ch. 611, as follows:
612.23(1)
(1) Conversion plan. The board of each participating town mutual shall adopt the same plan of conversion by resolution stating:
612.23(1)(a)
(a) The reasons for and the purposes of the proposed action;
612.23(1)(b)
(b) The proposed terms, conditions and procedures for and estimated expenses of implementing the conversion;
612.23(2)
(2) Approval by commissioner. The town mutuals shall file with the commissioner for approval the plan together with so much of the information under
s. 611.13 (2) as the commissioner reasonably requires. The commissioner shall approve the plan unless the commissioner finds, 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 insureds or of the public.
612.23(3)
(3) Approval by members. After being approved by the commissioner, the plan shall be submitted to the members of each town mutual for their approval.
612.23(4)
(4) Election of directors. A plan of conversion shall contain a provision for prompt election of directors if the plan goes into effect. If the plan is approved by the members of each town mutual, directors shall be elected promptly.
612.23(5)
(5) Reports to commissioner. Each town mutual shall file with the commissioner a copy of the resolution adopted under
sub. (3), stating the number of members entitled to vote, the number of members voting and the number of votes cast in favor of the plan, stating separately in each case the mail votes and the votes cast in person. Any election of directors under
sub. (4) shall also be reported to the commissioner.
612.23(6)
(6) Certificate of authority. If the requirements of the law are met, the commissioner shall issue a certificate of authority to the new mutual. Thereupon the nonsurviving town mutuals shall cease their legal existence, the corporate existence of any new mutual shall begin, and the directors elected under
sub. (4) shall take office. The new mutual shall have all the assets and be liable for all of the obligations of each of the participating town mutuals. The commissioner may grant a period not exceeding one year for adjustment to the requirements of
ch. 611, specifying the extent to which particular provisions of
ch. 611 shall not apply.
612.23 History
History: 1973 c. 22;
1979 c. 102.
612.24
612.24
Transfer of business. 612.24(1)
(1)
Approval by members. No action by which a town mutual proposes to transfer to another person or to reinsure any part of its insurance business, other than in the normal and usual course of business, or to sell, lease, exchange, mortgage, pledge or otherwise dispose of all or substantially all of its assets, is effective unless approved by the members.
612.24(2)
(2) Report to commissioner. The town mutual shall file with the commissioner a copy of any resolution under
sub. (1) not less than 30 days in advance of the date of the action proposed to be taken under the resolution, with a statement of the number of members entitled to vote, the number of members voting and the number voting to approve the transfer, stating separately mail votes and votes cast in person. The commissioner may defer the effective date for an additional period not exceeding 30 days by written notice to the town mutual before the expiration of the initial 30-day period.
612.24(3)
(3) Disapproval. The commissioner may, within the 30-day period or its extension, prohibit the proposed action if it is contrary to law or to the interests of insureds or the public or if it will make possible the circumvention of any of the requirements of
chs. 600 to
646. The commissioner shall prohibit a transfer of all or substantially all of the business unless it is accompanied by a plan for voluntary dissolution under
s. 612.25.
612.25
612.25
Voluntary dissolution of town mutuals. A town mutual may be dissolved in the following way:
612.25(1)
(1) Plan for dissolution. The board shall adopt a plan for dissolution stating:
612.25(1)(b)
(b) The proposed terms, conditions and procedures for and estimated expenses of implementing the dissolution; and
612.25(1)(c)
(c) The financial condition of the town mutual, in such detail as the commissioner reasonably requires.
612.25(2)
(2) Submission to commissioner. The town mutual shall file with the commissioner the plan and any explanatory statement proposed to be issued to the members. The commissioner may require that any additional information reasonably necessary to enable the members to make a decision be added to the proposed explanatory statement.
612.25(3)
(3) Approval by members and commissioner. The plan shall thereupon be submitted to the members. If the members adopt the plan, the corporation shall file with the commissioner for approval a copy of the resolution of the members, stating the number of members entitled to vote, the number of members voting and the number of votes cast in favor of the plan, stating separately the mail votes and the votes cast in person. The commissioner shall approve the plan unless he or she finds, after a hearing, that the town mutual is insolvent or may become insolvent in the process of dissolution unless it makes an assessment. If an assessment would be required, the commissioner shall institute proceedings under
s. 645.41 (10).
612.25(4)
(4) Implementation of plan. When the plan has been completely implemented, that fact shall be reported to the commissioner and the commissioner shall certify that the town mutual no longer has a legal existence.
612.25(5)
(5) Conversion to ch. 645 liquidation. If it appears at any time that the approved dissolution plan cannot be implemented according to its terms, or that there are grounds for involuntary liquidation, the commissioner may petition under
s. 645.41 for liquidation of the town mutual.
612.25 History
History: 1973 c. 22;
1979 c. 102 ss.
120,
236 (6).
