§431:14A-105  Board of directors,
established.  (a)  The board of directors of the company shall be
responsible for the organization, management, policies, and activities of the
company.  The board shall consist of nine voting members and one nonvoting member. 
The voting members shall consist of the following:



(1)  Eight directors who shall be owners, officers, or
employees of policyholders of the company and shall represent each of the
company divisions; and



(2)  One director who shall be a public, at-large
member elected by the board of directors.



The administrator shall be the nonvoting member of
the board.



(b)  The initial eight division directors shall
be appointed by the governor within sixty days of June 19, 1996, and shall
serve for terms of one year each.  The governor shall ensure adequate
representation from the major sectors of the economy and workforce in the
State.



The public, at-large member initially elected
by the board shall serve for a term of one year.



The initial board of directors shall determine
the staggering and length of future directors' terms; provided that no term
shall exceed three years.  Upon the expiration of the terms of the initial
division directors, the company's policyholders in the division represented by
the director shall elect the directors.  Each director shall serve for terms as
specified by the board unless sooner removed for cause pursuant to rules
adopted by the board.  Each director shall hold office until a successor is
elected as provided in this section.  No person shall serve more than two full
terms as director.  Any other law to the contrary notwithstanding, the election
and composition of the board of directors as provided in this section shall be
deemed adequate to qualify the company as a mutual insurer under chapter 431.



(c)  A vacancy on the board shall be filled by
appointment of the governor or insurance commissioner in the case of appointed
directors, or by election by the company division's policyholders or the board
of directors in the case of positions formerly occupied by a director elected
by the company division's policyholders or by the board of directors,
respectively.  The person appointed to fill a vacancy shall serve for the
remainder of the term of the person's predecessor.



(d)  Within one year after appointment, each
director shall be a member or an employee of a policyholder of the company and
shall continue in such status during the director's term of office.  Any
director representing a member that fails to maintain workers' compensation
insurance from the company shall be disqualified from serving on the board.



(e)  Each director shall receive necessary
traveling and board expenses incurred in the performance of duty as director
and a fee commensurate with the duties expected of actual attendance at board
meetings.



(f)  No person shall be a director who has a
direct and substantial interest in a competing insurer as:



(1)  A stockholder (excluding the holding of less than
one per cent of the outstanding shares in a publicly traded insurer);



(2)  An employee;



(3)  An attorney; or



(4)  A contracting party (excluding an independent
contractor or business owner who does less than twenty- five per cent of its
total annual volume of business per year with competing insurers). [L 1996, c 261,
pt of §2; am L 1997, c 300, §6]



 



Revision Note



 



  "June 19, 1996," substituted for "the
effective date of this section".