§431:14A-105  Board of directors,established.  (a)  The board of directors of the company shall beresponsible for the organization, management, policies, and activities of thecompany.  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, oremployees of policyholders of the company and shall represent each of thecompany divisions; and

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

The administrator shall be the nonvoting member ofthe board.

(b)  The initial eight division directors shallbe appointed by the governor within sixty days of June 19, 1996, and shallserve for terms of one year each.  The governor shall ensure adequaterepresentation from the major sectors of the economy and workforce in theState.

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

The initial board of directors shall determinethe staggering and length of future directors' terms; provided that no termshall exceed three years.  Upon the expiration of the terms of the initialdivision directors, the company's policyholders in the division represented bythe director shall elect the directors.  Each director shall serve for terms asspecified by the board unless sooner removed for cause pursuant to rulesadopted by the board.  Each director shall hold office until a successor iselected as provided in this section.  No person shall serve more than two fullterms as director.  Any other law to the contrary notwithstanding, the electionand composition of the board of directors as provided in this section shall bedeemed adequate to qualify the company as a mutual insurer under chapter 431.

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

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

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

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

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

(2)  An employee;

(3)  An attorney; or

(4)  A contracting party (excluding an independentcontractor or business owner who does less than twenty- five per cent of itstotal 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 "theeffective date of this section".