611.31(4)(f)1.
1. The securities are registered, or are required to be registered, pursuant to s. 12 of the federal securities exchange act of 1934, as amended; or
611.31(4)(f)2.
2. The corporation did not have any class of its equity securities held of record by 100 or more persons on the last business day of the year preceding the year in which equity securities of the corporation would otherwise be subject to
pars. (a) to
(c).
611.31(4)(g)
(g) In this subsection "equity security" means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the commissioner deems to be of similar nature and designates as an equity security by rules promulgated in the public interest or for the protection of investors.
611.31(5)
(5) Proxy solicitation. No person may, in contravention of rules the commissioner promulgates for the protection of investors or the public, solicit or permit the use of his or her name to solicit any proxy or consent or authorization in respect of any equity security of a domestic stock corporation having 100 or more shareholders of record.
611.31(6)
(6) Effect of reliance on commissioner's rule. No provision of
sub. (4) imposing any liability applies to any act done or omitted in good faith in conformity with any rule of the commissioner, even if the rule is, after the act or omission, amended or rescinded or determined by judicial or other authority to be invalid.
611.31(7)
(7) Effect of violation. A contract for subscription to or the purchase of shares in any corporation made in violation of this chapter or of
ch. 551 is valid and enforceable against but not in favor of the corporation or the insider, except that the contract is valid and enforceable in favor of the corporation against an insider.
611.31 History
History: 1971 c. 260;
1979 c. 102 ss.
97,
236 (13).
611.32(1)(1)
Mandatory purchase. During the period of effectiveness of the organization permit the incorporators, directors, and principal officers of a stock corporation shall among themselves subscribe and pay, at the public offering price, at least $100,000 in cash or in property of equivalent value approved by the commissioner, for shares offered by the corporation under the organization permit.
611.32(2)(a)(a) No person may subscribe for promoter stock on terms more favorable than those on which subscriptions are being solicited from the general public.
611.32(2)(b)
(b) Except under this section and
s. 611.18 (2) (a) 2., and except for stock dividends, no promoter stock may be issued for 5 years following the initial issuance of the certificate of authority, without the approval of the commissioner which may be granted by the commissioner only if he or she finds that:
611.32(2)(b)1.
1. The corporation is in need of additional capital; and
611.32(2)(b)2.
2. The value proposed to be given for the stock is fair to existing shareholders and has a reasonable relation to the current value of the outstanding shares.
611.32(2)(c)
(c) This subsection shall not affect the exercise of preemptive rights.
611.32(3)(a)(a)
Deposit in escrow. Shares of promoter stock and any stock received thereon as the result of a stock dividend, stock split or exercise of preemptive rights shall be deposited in escrow with a depository satisfactory to the commissioner under an agreement providing that the shares may not be transferred without the approval of the commissioner.
611.32(3)(b)
(b)
Release from escrow. If the corporation issues any life insurance policies, any shares subject to this section shall be released from escrow 5 years after issuance of the certificate of authority. In other cases, the shares shall be released from escrow 3 years after issuance of the certificate of authority.
611.32(4)(a)(a)
Definition. In this subsection, "earned surplus" means the balance of the net profits, income, gains and losses of a corporation from the date of incorporation.
611.32(4)(b)1.
1. Shall be granted upon request if the corporation has made an addition to earned surplus in each of the 2 immediately preceding years of at least 6% of the capital raised by the sale of shares under the organization permit; and
611.32(4)(b)2.
2. May be granted upon a showing of hardship by the shareholder or the shareholder's estate or legatee, if the release from escrow of the shares or a portion thereof would not, in the commissioner's opinion, endanger the interests of insureds or the public.
611.32(5)
(5) Options to purchase stock. For 3 years after the issuance of the certificate of authority, an option to purchase stock may be issued only pursuant to a plan approved by the commissioner.
611.33
611.33
Authorized securities. 611.33(1)(a)1.
1. Until one year after the initial issuance of a certificate of authority, the corporation may issue no shares and no other securities convertible into shares except for a single class of common stock that satisfies
s. 180.0601 (3) and, with the approval of the commissioner, on terms that he or she considers fair, a single class of preferred stock for sale to no more than 15 shareholders;
611.33(1)(a)2.
2. After the first year and within 5 years after the initial issuance of a certificate of authority, no additional classes of shares may be issued, except after approval of the commissioner, who may approve only if he or she finds that existing shareholders will not be prejudiced.
611.33(1)(b)
(b)
Fractional shares or scrip. No fractional shares may be issued. Subject thereto,
s. 180.0604 applies.
611.33(2)(a)(a)
Mutual bonds. The articles of a nonassessable mutual may authorize mutual bonds of one or more classes and shall specify the amount of each class of bonds the corporation is authorized to issue, their designations, preferences, limitations, rates of interest, relative rights and other terms, subject to the following provisions:
611.33(2)(a)1.
1. During the first year after the initial issuance of a certificate of authority, the corporation may issue only a single class of bonds with identical rights;
611.33(2)(a)2.
2. After the first year but within 5 years after the initial issuance of a certificate of authority, additional classes of bonds may be authorized after approval of the commissioner, who shall approve if he or she finds that policyholders and prior bondholders will not be prejudiced;
611.33(2)(a)3.
3. The rate of interest shall be fair and reasonable; and
611.33(2)(a)4.
4. The bonds shall bear a maturity date not later than 10 years from the date of issuance, when principal and accrued interest shall be due and payable, subject to
par. (d).
611.33(2)(b)
(b)
Contribution notes. Any mutual may issue contribution notes if the commissioner approves. The commissioner may approve only if he or she finds that:
611.33(2)(b)1.
1. The notes will not be issued in denominations of less than $500, and no single issue will be sold to more than 15 persons;
611.33(2)(b)2.
2. No discount, commission or other fee will be paid or allowed;
611.33(2)(b)3.
3. The notes will not be the subject of a public offering;
611.33(2)(b)4.
4. Their terms are not prejudicial to policyholders, holders of mutual bonds or of prior contribution notes; and
611.33(2)(b)5.
5. The mutual's articles or bylaws do not forbid their issuance.
611.33(2)(c)1.
1. If it has any outstanding obligations on mutual bonds or contribution notes, borrow on contribution notes from, or sell bonds to, any other insurer without approval of the commissioner; or
611.33(2)(c)2.
2. Make any loan to another insurer except a fully secured loan at usual market rates of interest.
611.33(2)(d)
(d)
Repayment. 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.
611.33(2)(e)
(e)
Other obligations. 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.
611.34
611.34
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,
180.0640 and
180.1708 (2), but within 10 days after the end of any month in which it purchases more than one per cent 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% 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% of any class of its outstanding shares.
611.34 History
History: 1971 c. 260;
1989 a. 303.
611.36
611.36
Number of shareholders. Section 180.0142 applies to stock corporations for purposes of this chapter.
611.36 History
History: 1989 a. 303.
MANAGEMENT OF INSURANCE CORPORATIONS
611.40
611.40
Shareholders' meetings. 611.40(1)
(1)
Meetings, notices, quorums and voting. Sections 180.0701 to
180.0703,
180.0705,
180.0721 to
180.0727 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
611.41
611.41
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.
611.41(2)
(2) Attendance at meetings. The commissioner has the right to attend any shareholders' or policyholders' meeting.
611.41(3)
(3) Exception. Subsection (2) 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.
611.41 History
History: 1971 c. 260;
1979 c. 102 s.
236 (21).
611.42
611.42
Mutual policyholders' voting rights. 611.42(2)(a)(a)
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). 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.
611.42(2)(b)
(b)
Optional voting rights. The articles of any mutual may give the policyholders additional voting rights.
611.42(3)
(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.
611.42(4)(a)(a) The articles may provide for regular or special meetings of the policyholders, or elections in lieu of meetings.
611.42(4)(b)
(b) 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.
611.42(5)
(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.
611.42 History
History: 1971 c. 260;
1979 c. 102 s.
236 (5).
611.43
611.43
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.
611.43 History
History: 1971 c. 260.
611.51
611.51
Board of directors. 611.51(2)(a)(a)
General. Except under
pars. (b) and
(c), a corporation shall have at least 5 directors if no more than one director is an employe or representative of the corporation, and shall have at least 9 directors in other cases.
611.51(2)(b)
(b)
New corporations. During the first 5 years after initial issuance of a certificate of authority, a corporation shall have at least 5 directors.
611.51(2)(c)
(c)
Exception. 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.
611.51(3)
(3) Inside directors. Employes and representatives of a corporation may not constitute a majority of its board.
611.51(4)
(4) Subsidiaries and closely held corporations. Subsections (2) (a) and
(3) do not apply to an insurance subsidiary authorized under
s. 611.26 (1) nor to a stock insurance corporation more than 95% 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.
