611.66(1)
(1)
General. Except under
sub. (2), no corporation may enter into any contract whereby any person is granted or obtains directly or indirectly the exclusive right or privilege of soliciting, producing or receiving a fee or commission on all or substantially all of the insurance business of the corporation or on all or substantially all of the insurance business of the corporation in this state.
611.66(2)
(2) Subsidiaries. Subsection (1) does not apply to contracts in which a corporation is the exclusive agent of its insurance subsidiary authorized under
s. 611.26 (1) or in which the subsidiary is the exclusive agent of the corporation.
611.66 History
History: 1971 c. 260.
611.67
611.67
Management contract services. 611.67(1)(c)
(c) "Management authority" means the authority to exercise any management control of the corporation or of its underwriting, loss adjustment, investment, general servicing or production function or other major corporate function.
611.67(2)
(2) Except as provided in
sub. (3), a corporation may not be a party to a contract which has the effect of delegating management authority to a person to the substantial exclusion of the board.
611.67(3)
(3) An insurer that offers a health maintenance organization, limited service health organization or preferred provider plan may delegate management authority with regard to the health maintenance organization, limited service health organization or preferred provider plan to a person other than an officer, director or employe of the insurer if the person exercises the management authority according to the terms of a written contract between the insurer and the person and if the contract is filed with the commissioner and not disapproved by the commissioner under
sub. (4).
611.67(4)(a)(a) The commissioner may disapprove a contract under
sub. (3) within a 30-day period after the date of filing or within a reasonable extension period following the 30-day period if the extension period is specified by notice to the health care plan within the 30-day period.
611.67(4)(b)
(b) The commissioner may disapprove a contract under
sub. (3) only if the commissioner makes one of the findings specified in
s. 618.22 (2).
611.67 History
History: 1985 a. 29.
611.69
611.69
Dividends and other distributions. 611.69(2)
(2) Unclaimed dividends and distributions. Chapter 177 applies to stock corporations.
611.69 History
History: 1971 c. 260;
1989 a. 303.
CORPORATE REORGANIZATION
611.71
611.71
Acquisition of all of the shares or of a class of shares of an insurance corporation. 611.71(1)
(1)
Exchange of shares permitted. A domestic stock insurance corporation may acquire, in the manner provided by this section, in exchange for its shares, all the shares, or all the shares of any class, of any other domestic stock insurance corporation, provided no law is violated by the acquisition.
611.71(2)
(2) Offer. The acquiring corporation shall submit by 1st class mail to all holders of the shares to be acquired a written offer which shall:
611.71(2)(a)
(a) Specify the shares to which the offer relates;
611.71(2)(b)
(b) Prescribe the terms and conditions of the proposed exchange, including the method of acceptance and the manner of exchanging the shares;
611.71(2)(c)
(c) Provide such information respecting both corporations as the commissioner prescribes by rule;
611.71(2)(d)
(d) Contain a statement summarizing the rights of the shareholders under
sub. (5) (b); and
611.71(2)(e)
(e) Provide for the payment of cash or scrip in lieu of the issuance of fractional shares of the acquiring corporation.
611.71(3)
(3) Copy of offer. One copy of the offer shall be filed with the commissioner immediately.
611.71(4)
(4) Acceptance. The exchange shall be consummated if, within 120 days after the date of the mailing, the offer is accepted by the holders of not less than 90% of the shares of each class to which it relates. In ascertaining what percentage have accepted, shares may not be counted if at the date of mailing of the offer they were already held by, or by a nominee for, the acquiring corporation or any affiliate.
611.71(5)
(5) Implementation. If there is acceptance satisfying
sub. (4), the acquiring corporation shall, within 60 days:
611.71(5)(a)
(a) Execute and file with the commissioner a certificate setting forth the acceptances; and
611.71(5)(b)
(b) Give written notice of the satisfaction of the requirement, by registered or certified mail return receipt requested, to each holder of shares to which the offer relates who has not yet accepted the offer. The notice, the form of which must be approved by the commissioner, shall include, or be accompanied by, a statement that such shareholders may dissent from the offer by notification to the offeror within 120 days after the date of the mailing and be paid the fair value of their shares as determined under
ss. 180.1325 and
180.1328 to
180.1331, and that failure so to notify the offeror shall be deemed acceptance of the offer. For purposes of
s. 180.1325, notification to the offeror in accordance with this paragraph constitutes a demand for payment under
s. 180.1323.
611.71(6)
(6) Issuance of certificates or information statements. Upon the filing of the certificate under
sub. (5) (a):
611.71(6)(a)
(a) All shares in exchange for which shares of the acquiring corporation are issued shall become the property of the acquiring corporation, whether or not any certificates representing the shares have been surrendered for exchange;
611.71(6)(am)
(am) If the articles of incorporation or bylaws of the acquired corporation require shares to be issued with certificates, the acquiring corporation shall be entitled to have new certificates for the shares under
par. (a) registered in its name as the holder;
611.71(6)(b)
(b) The acquiring corporation shall do all of the following:
611.71(6)(b)1.
1. Cause certificates for its shares to be issued and delivered to the holders of shares who have already accepted, and thereafter immediately upon acceptance to those who accept or are deemed to have accepted.
611.71(6)(b)2.
2. If the shares are issued without certificates, cause information statements that comply with
s. 180.0626 (2) to be issued and delivered to the persons described in
subd. 1.
611.71(6)(c)
(c) The acquiring corporation or a corporate fiduciary designated by it and acceptable to the commissioner, shall hold in trust, for delivery or payment to the persons entitled thereto but not at once located, the certificates or information statements for its shares and cash payable under
sub. (2) (e) or
(5) (b).
611.71(7)
(7) Other exchange offers. This section does not prevent a person from making an offer to purchase the shares of an insurance corporation conditioned upon acceptance by holders of less than 90% of the shares to which the offer relates. Such an offer may be joined as an alternate offer with an offer made under this section; but the acquiring corporation shall have the right to avail itself of this section only if the requirements of
subs. (1) to
(6) are satisfied.
611.71(8)
(8) Acquisition of a small minority of shares. If at least 90% of any class of shares of any domestic stock insurance corporation are held by any other domestic insurance corporation or its nominee, the owning corporation may proceed under
subs. (2) and
(5), even if the offer is accepted by less than the required number of shareholders.
611.71 Annotation
Commissioner of insurance may not permit WPS, a nonprofit plan, to be organized into a stock insurance company under 611.71 to 611.78. Sections 148.01 (1) and (3), 148.03, 200.26 (4), 201.045 and 204.31 (3m) also discussed. 63 Atty. Gen. 48.
611.72
611.72
Merger or other acquisition of control of a stock insurance corporation. 611.72(1)
(1)
General. Subject to this section,
ss. 180.1101,
180.1103 to
180.1107,
180.1706,
180.1707 and
180.1708 (5) apply to the merger of a domestic stock insurance corporation or its parent insurance holding corporation, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.
611.72(2)
(2) Approval required. No proposed plan of merger under
s. 180.1101,
180.1104 or
180.1107 or other plan for acquisition of control may be submitted to the shareholders of any domestic stock insurance corporation or its parent insurance holding corporation participating in the transaction or executed unless it has been approved by the commissioner.
611.72(3)
(3) Grounds for disapproval. The commissioner shall approve the plan if the commissioner finds, after a hearing, that it would not violate the law or be contrary to the interests of the insureds of any participating domestic corporation or of the Wisconsin insureds of any participating nondomestic corporation and that:
611.72(3)(a)
(a) After the change of control, the domestic stock insurance corporation or any domestic stock insurance corporation controlled by the insurance holding corporation would be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;
611.72(3)(b)
(b) The effect of the merger or other acquisition of control would not be to create a monopoly or substantially to lessen competition in insurance in this state;
611.72(3)(c)
(c) The financial condition of any acquiring party is not likely to jeopardize the financial stability of the domestic stock insurance corporation or its parent insurance holding corporation, or prejudice the interests of its Wisconsin policyholders;
611.72(3)(d)
(d) The plans or proposals which the acquiring party has to liquidate the domestic stock insurance corporation or its parent insurance holding corporation, sell its assets, merge it with any person or make any other material change in its business or corporate structure or management, are fair and reasonable to policyholders of the domestic stock insurance corporation or in the public interest; and
611.72(3)(e)
(e) The competence and integrity of those persons who would control the operation of the domestic stock insurance corporation or its parent insurance holding corporation are such that it would be in the interest of the policyholders of the corporation and of the public to permit the merger or acquisition of control.
611.72(4)
(4) Plans of exchange. Any domestic stock insurance corporation may adopt a plan of exchange of all the outstanding shares of its shareholders under which another stock insurance corporation, which acquires the shares, shall as consideration transfer its own shares or other securities issued by it or pay cash or other consideration, or pay or provide any combination of the foregoing types of consideration. The procedure for the adoption and approval of a plan of exchange and the rights of shareholders of the participating corporations shall be the same as for a merger under
subs. (2) and
(3).
611.73
611.73
Merger and consolidation of mutuals. 611.73(1)(1)
Authorization, domestic corporations. Any 2 or more domestic mutuals may merge or consolidate under the procedures of
ss. 181.42 to
181.47, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner.
611.73(2)
(2) Authorization, domestic and foreign corporations. Any 2 or more domestic and foreign mutuals may merge or consolidate under
s. 181.48.
611.73(3)
(3) Approval by the commissioner. The plan of merger or consolidation shall be submitted to the commissioner for his or her approval after any necessary action by the boards and before any necessary action by the policyholders. The commissioner shall approve the plan unless he or she finds, after a hearing, that the proposed merger or consolidation would be contrary to the law or to the interests of the insureds of any participating domestic corporation or the Wisconsin insureds of any participating nondomestic corporation.
611.73(4)
(4) Voting by policyholders. The commissioner may order that the plan submitted to him or her under
sub. (3) be amended to provide for voting by policyholders of any mutual involved.
611.74
611.74
Voluntary dissolution of domestic insurance corporations. 611.74(1)(1)
Plan of dissolution. At least 60 days prior to the submission to shareholders or policyholders of any proposed voluntary dissolution of an insurance corporation under
s. 180.1402 or
181.50 the plan shall be filed with the commissioner. The commissioner may require the submission of additional information to establish the financial condition of the corporation or other facts relevant to the proposed dissolution. If the shareholders or policyholders adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the corporation. The commissioner shall approve the dissolution unless, after a hearing, the commissioner finds that it is insolvent or may become insolvent in the process of dissolution. Upon approval, the corporation may dissolve under
ss. 180.1402 to
180.1408 and
180.1706, or
ss. 181.51 to
181.555, except that the last sentence of
s. 181.555 does not apply and papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner. Upon disapproval, the commissioner shall petition the court for liquidation or for rehabilitation under
ch. 645.
611.74(2)
(2) Conversion to involuntary liquidation. The corporation may at any time during the liquidation under
ss. 180.1402 to
180.1408 or
ss. 181.51 to
181.555 apply to the commissioner to have the liquidation continued under the commissioner's supervision; thereupon the commissioner shall apply to the court for liquidation under
s. 645.41 (10).
611.74(3)
(3) Revocation of voluntary dissolution. If the corporation revokes the voluntary dissolution proceedings under
ss. 180.1404 and
180.1706 or under
s. 181.53 a copy of the articles of revocation of dissolution prepared under
s. 180.1404 or the resolution revoking the voluntary dissolution proceedings adopted under
s. 181.53 shall be filed with the commissioner.
611.74(4)
(4) Distribution of assets of a mutual. No distribution may be made to policyholders in excess of the amounts to which they are entitled under
s. 645.72 (4). Any excess over such amounts shall be paid into the state treasury to the credit of the common school fund.
611.75
611.75
Conversion of a domestic stock corporation into a mutual. A domestic stock corporation may be converted into a domestic mutual as follows:
611.75(1)
(1) Action by board. The board shall adopt a plan of conversion. Thereafter no additional shares of capital stock shall be issued except that stock options to purchase capital stock may continue to be issued under existing contracts and outstanding options may continue to be exercised until the conversion is executed under
sub. (6).
611.75(2)(a)(a) The plan of conversion shall provide for the purchase by the corporation of all of its outstanding capital stock, at a price either specified in the plan or to be determined under a formula specified in the plan, for cash, specified debt securities to be issued by the corporation, or both. All holders of capital stock of the same class shall have the same rights under the plan. Shareholders may be given an election to take all or a portion of the price in the specified debt securities. Debt securities may be of any class authorized for mutual corporations under
s. 611.33 (2).
611.75(2)(b)
(b) The plan shall provide a fair procedure subject to the commissioner's supervision to value contractual obligations of the corporation, such as those relating to stock options, that must be terminated on the date of conversion and are compensable under
sub. (6) (b).
611.75(3)
(3) Approval requirement. No conversion may be effected unless the plan of conversion is approved by the commissioner. The corporation shall file with the plan so much of the information under
s. 611.13 (2) for the new mutual as the commissioner reasonably requires.
611.75(4)
(4) Condition for approval. The commissioner shall approve the conversion unless he or she finds, after a hearing, that:
611.75(4)(b)
(b) Its terms are not fair to the shareholders or the policyholders; or
611.75(4)(c)
(c) The resulting mutual would not meet the requirements for a certificate of authority under
s. 611.20.
611.75(5)
(5) Approval by shareholders. After the commissioner approves the plan of conversion, it shall be submitted to the shareholders for approval by the affirmative vote of a majority of each class of shares entitled to vote. Only shareholders of record on the date of the adoption under
sub. (1) may vote.
611.75(6)(a)(a)
Continuation of corporation. If the shareholders approve the plan of conversion under
sub. (5), the commissioner shall issue a new certificate of authority. The issuance of the certificate is the act of conversion, the corporation at once becomes a mutual and is no longer a stock corporation. The mutual shall be deemed to have been organized at the time the converted stock corporation was organized. The board shall thereupon implement the plan of conversion.
611.75(6)(b)
(b)
Termination of contract rights. Any contractual obligation inconsistent with the nature of a mutual, including any obligation to issue or to redeem stock options, shall terminate upon the act of conversion under
par. (a), without compensation unless the obligation was legally binding before April 30, 1972.
611.75(7)
(7) Expenses. The corporation may not pay compensation of any kind to any person other than regular salaries to existing personnel, in connection with the proposed conversion, other than for clerical and mailing expenses, except that with the commissioner's approval payment may be made at reasonable rates for printing costs and for legal and other professional fees for services actually rendered. All expenses of the conversion, including the expenses incurred by the commissioner and the prorated salaries of any insurance office staff members involved, shall be borne by the corporation being converted.
611.75 History
History: 1971 c. 260;
1979 c. 102 s.
236 (5).
611.76
611.76
Conversion of a domestic mutual into a stock corporation. 611.76(1)(a)(a)
General. Except under
par. (b), a domestic mutual may be converted into a domestic stock corporation under
subs. (2) to
(11).
611.76(1)(b)
(b)
Conversion of related insurers. No domestic mutual that is affiliated with other mutuals may be converted into a stock corporation, unless all such affiliated mutuals are also converted at the same time, or the commissioner finds that the interests of the policyholders of the remaining mutuals can be permanently protected by limitations on the corporate powers of the new stock corporation or on its authority to do business, or otherwise.
