613.29(3)
(3) Effect of amendment. Section 181.1008 applies to service insurance corporations.
613.29 History
History: 1975 c. 223;
1997 a. 79.
SECURITIES OF SERVICE INSURANCE CORPORATIONS
613.31
613.31
Securities regulation. 613.31(1)
(1)
Registration. No securities issued by a service insurance corporation may be sold by or for the corporation unless they are registered or exempt from registration under
ch. 551.
613.31(2)
(2) Approval by commissioner. Securities of a service insurance corporation may not be registered under
ch. 551 without prior approval of the commissioner of insurance.
613.31 History
History: 1975 c. 223.
613.33
613.33
Authorized securities. 613.33(1)
(1)
Service insurance corporation bonds. The articles of a service insurance corporation may authorize service insurance corporation 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 and relative rights, subject to the following provisions:
613.33(1)(a)
(a) 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.
613.33(1)(b)
(b) 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 on a finding that policyholders and prior bondholders will not be prejudiced.
613.33(1)(c)
(c) The rate of interest shall be fair and reasonable.
613.33(1)(d)
(d) 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
sub. (4).
613.33(2)
(2) Contribution notes. Any service insurance corporation may issue contribution notes if the commissioner approves. The commissioner may approve only on a finding that:
613.33(2)(a)
(a) The notes will not be issued in denominations of less than $500, and no single issue will be sold to more than 15 persons;
613.33(2)(b)
(b) No discount, commission or other fee will be paid or allowed;
613.33(2)(c)
(c) The notes will not be the subject of a public offering;
613.33(2)(d)
(d) Their terms are not prejudicial to policyholders, holders of service insurance corporation bonds or of prior contribution notes; and
613.33(2)(e)
(e) The corporation's articles and bylaws do not forbid their issuance.
613.33(3)
(3) Prohibited transactions. No service insurance corporation may:
613.33(3)(a)
(a) If it has any outstanding obligations on service insurance corporation bonds or contribution notes, borrow on contribution notes from, or sell bonds to, any other insurer without approval of the commissioner; or
613.33(3)(b)
(b) Make any loan to another insurer except a fully secured loan at usual market rates of interest.
613.33(4)
(4) Repayment. Payment of the principal or interest on service insurance corporation bonds or contribution notes may be made in whole or in part only after approval by 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 thereby 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 service insurance corporation bonds issued by the corporation at any time.
613.33(5)
(5) Other obligations. Nothing in this section prevents a service insurance corporation from borrowing money on notes which are its general obligations, nor from pledging any part of its disposable assets therefor.
613.33 History
History: 1975 c. 223,
421;
1979 c. 102.
MANAGEMENT OF CORPORATIONS
613.40
613.40
Members and meetings. In a service insurance corporation that has members:
613.40 History
History: 1975 c. 223;
1997 a. 79.
613.41
613.41
Communications to members or policyholders and attendance at meetings. 613.41(1)
(1)
Copies of communications. The commissioner may by rule prescribe that copies of specified classes of communications circulated generally by a corporation to members or policyholders shall be communicated to the commissioner at the same time.
613.41(2)
(2) Attendance at meetings. The commissioner may attend any members' or policyholders' meeting.
613.41 History
History: 1975 c. 223,
421.
613.51
613.51
Board of directors. 613.51(1)(1)
General. The affairs of a corporation shall be managed by a board of directors. Directors need not be residents of this state or members of the corporation unless the articles of incorporation or bylaws so require. The articles of incorporation or bylaws may prescribe other qualifications for directors.
613.51(3)
(3) Inside directors. Employees and representatives of a service insurance corporation may not constitute a majority of its board.
613.51(4)
(4) Unlawful delegation. 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. 181.0841 and
613.56.
613.51(5)
(5) Quorum and voting. Section 181.0824 applies to service insurance corporations, except as modified by
s. 613.60.
613.51 History
History: 1975 c. 223;
1997 a. 79.
613.52 History
History: 1975 c. 223;
1997 a. 79.
613.53
613.53
Policyholder or public members of board of directors. The articles may provide that any number of the directors shall be chosen from among the policyholders, the general public or both, under a plan designed to assure independent directors truly representing the interests of policyholders or the public interest. The persons to be named as directors under this section shall be persons whose experience and existing relationships qualify them to serve responsibly and impartially as independent policyholder or public directors.
613.53 History
History: 1975 c. 223.
613.54
613.54
Supervision of management changes. Section 611.54 applies to service insurance corporations.
613.54 History
History: 1975 c. 223.
613.55
613.55
Continuity of management in emergencies. Section 611.55 applies to service insurance corporations.
613.55 History
History: 1975 c. 223.
613.56
613.56
Committees of directors. 613.56(1)
(1)
Appointment. If the articles or bylaws of a corporation so provide, the board by resolution adopted by a majority of the full board may designate one or more committees, each consisting of 3 or more directors serving thereon at the pleasure of the board. The board may designate one or more directors as alternate members of any committee to substitute for any absent member at any meeting of the committee. The designation of a committee and delegation of authority to it shall not relieve the board or any director of responsibility imposed by law.
613.56(2)
(2) Delegation; major committees. When the board is not in session, a committee satisfying all of the requirements for the composition of a full board under
s. 613.51 may exercise any of the powers of the board in the management of the business and affairs of the corporation, including action under
ss. 611.60 and
611.61 as applied to service insurance corporations by
s. 613.60, to the extent authorized in the resolution or in the articles or bylaws.
613.56(3)
(3) Delegation; ordinary committees. When the board is not in session, a committee not satisfying the requirements of
sub. (2) may exercise the powers of the board in the management of the business and affairs of the corporation to the extent authorized in the resolution or in the articles or bylaws, except action in respect to:
613.56(3)(a)
(a) Compensation or indemnification of any person who is a director, principal officer or one of the 3 most highly paid employees, and any benefits or payments requiring member or policyholder approval;
613.56(3)(b)
(b) Approval of any contract required to be approved by the board under
ss. 611.60 and
611.61 as applied to service insurance corporations by
s. 613.60, or of any other transaction in which a director has a material interest adverse to the corporation;
613.56(3)(e)
(e) Any other decision requiring member or policyholder approval;
613.56(3)(f)
(f) Amendment or repeal of any action previously taken by the full board which by its terms is not subject to amendment or repeal by a committee;
613.56(3)(g)
(g) Dividends or other distributions to members or policyholders, other than in the routine implementation of policy determinations of the full board;
613.56(3)(i)
(i) Filling of vacancies on the board or any committee created under
sub. (1) except that the articles or bylaws may provide for temporary appointments to fill vacancies on the board or any committee, the appointments to last no longer than the end of the next board meeting.
613.56(4)
(4) Subsequent review. The full board or a major committee of the board authorized to do so under
sub. (2) shall specifically review any transaction in which an officer has a material financial interest adverse to the corporation, at the next meeting following action by any ordinary committee.
613.56(5)
(5) Quorum and voting. Sections 181.0821 and
181.0824 apply to a committee of the board of a service insurance corporation, except that references to "board" shall be read as relating to "committee", references to "majority" in
s. 181.0824 (1) shall be read as referring to a majority of the members appointed to serve on the committee, and references to "majority" in
s. 181.0824 (2) shall be read as referring to a majority of the members appointed to serve on the committee who are present at the meeting.
613.57
613.57
Interlocking directorates and other relationships. Section 611.57 applies to service insurance corporations.
613.57 History
History: 1975 c. 223.
613.58
613.58
Policyholders' committee. A service insurance corporation's articles or bylaws may provide for a policyholders' committee, to be selected in a manner that will make its membership representative of the interests of policyholders. The policyholders' committee shall at the corporation's expense prepare an annual report to be filed with the commissioner. The corporation shall inform all policyholders of the availability of the report in a manner approved by the commissioner and shall send copies of the report to policyholders upon their request. A summary of the report prepared or approved by the committee and not exceeding 2,000 words shall be included with any annual report issued by the corporation to members or policyholders.
613.58 History
History: 1975 c. 223.
613.60
613.60
Transactions with affiliates in which directors and others are interested. Sections 611.60 and
611.61 apply to service insurance corporations.
613.60 History
History: 1975 c. 223;
1979 c. 102.
613.62
613.62
Directors' and officers' liability and indemnification. 613.62(2)
(2) Indemnification. Sections 181.0871 to
181.0881 apply to service insurance corporations but no indemnification may be made until at least 30 days after notice to the commissioner, containing full details about the proposed indemnification.
613.63
613.63
Executive compensation. 613.66
613.66
Exclusive agency contracts. 613.66(1)
(1)
General. Except under
sub. (2), no service insurance corporation may enter into any contract whereby any person is granted 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 in this state.
