State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter24

CHAPTER 24 - ORGANIZATION AND CORPORATE PROCEDURES OF LEGALRESERVE STOCK AND MUTUAL INSURERS

 

26-24-101. Scope and applicability of chapter.

 

Thischapter applies only to domestic stock insurers and domestic mutual insurerstransacting or proposing to transact insurance on the cash premium or legalreserve plan, except that W.S. 26-24-115, 26-24-130 and 26-24-136 also apply toforeign and alien insurers.

 

26-24-102. Applicability of general corporation statutes; exceptions.

 

(a) The applicable provisions of the Wyoming BusinessCorporation Act apply to domestic stock and domestic mutual insurers, except asin conflict with the express provisions of this code and the reasonableimplications thereof.

 

(b) Domestic stock insurers and domestic mutual insurers areexempt from the provisions of W.S. 17-16-1630 and 17-16-1820(e).

 

26-24-103. Incorporation generally.

 

 

(a) This section applies to stock and mutual insurersincorporated in this state.

 

(b) Five (5) or more individuals may incorporate a stockinsurer. Ten (10) or more individuals may incorporate a mutual insurer. Atleast a majority of the incorporators shall be citizens of the United States.At least a majority of the incorporators shall be residents of this state.

 

(c) The incorporators shall sign and verify in triplicatearticles of incorporation in accordance with the applicable provisions of theWyoming Business Corporation Act, but subject to the following requirements:

 

(i) The name of the corporation shall comply with W.S.26-3-106. If a mutual insurer, "mutual" shall be included in thename. An alternative name may be specified for use in jurisdictions in whichconflict of name with that of another insurer or organization might otherwiseprevent the insurer from being authorized to transact insurance therein;

 

(ii) The purposes of the corporation shall be limited to thetransaction of one (1) or more kinds of insurance, as defined in this code, andthe corporation does not have power to engage in any other or additional business,except that a title insurer may engage in the title abstract business andescrow business;

 

(iii) If a stock corporation, the capital stock must consistentirely of common stock of one (1) uniform class, par value not less than onedollar ($1.00) per share, each outstanding share of which has equal rights inevery respect with every other share, and shares without par value shall not beauthorized;

 

(iv) If a mutual corporation, the articles of incorporationshall state the maximum contingent liability of members for payment of lossesand expenses incurred, other than as to nonassessable policies issued aspermitted under W.S. 26-24-137, but the liability shall not be less than one(1) nor more than six (6) annual premiums for the member's policy;

 

(v) The corporation's initial board of directors, as providedfor in the articles of incorporation, shall consist of not less than five (5)members;

 

(vi) The articles of incorporation shall specify which, if any,of the incorporators are not citizens of the United States of America or arenot residents of this state.

 

26-24-104. Articles of incorporation; generally; filing; approvalprocedure.

 

 

(a) The incorporators of a proposed domestic insurer shalldeliver the triplicate originals of the articles of incorporation to thecommissioner. The commissioner shall deliver one (1) of the originals to theattorney general of this state, and the attorney general shall examine thearticles. If the attorney general finds that the articles comply with law, heshall so certify and return the certificate and the original articles ofincorporation to the commissioner.

 

(b) If the attorney general approves the articles ofincorporation, the commissioner shall also endorse his approval upon each setof the articles and return them, together with the attorney general'scertificate, to the incorporators. The incorporators shall then file one (1)set of the articles of incorporation with the secretary of state, one (1) setwith the commissioner bearing the certification of the secretary of state andshall retain the third set in the corporate records. For the filing of articlesof incorporation of a mutual insurer, the secretary of state shall charge andcollect a filing fee of twenty-five dollars ($25.00), which shall be creditedto the general fund.

 

(c) If the attorney general finds that the proposed articles donot comply with the law, he shall refuse to approve them and shall return theset thereof to the commissioner, together with a written statement of therespects in which he finds the articles do not comply. The commissioner shallthen return all sets of the proposed articles to the proposed incorporatorstogether with the attorney general's written statement.

 

(d) The secretary of state shall not permit the filing in thatoffice of any articles of incorporation unless they bear the commissioner'sapproval endorsed thereon as provided in subsection (b) of this section.

 

(e) The approval of the attorney general or commissionerrelates only to the form and contents of the articles of incorporation and doesnot constitute approval or commitment as to any other aspect or operation ofthe proposed insurer.

 

(f) The attorney general and the commissioner shall perform allduties required of them under this section within a reasonable time after thearticles of incorporation have been submitted to the commissioner as providedin subsection (a) of this section.

 

26-24-105. Articles of incorporation; amendment by stock insurers.

 

 

(a) A domestic stock insurer may amend its articles ofincorporation for any lawful purpose through the same procedures prescribed inthe Wyoming Business Corporation Act as for business corporations in general.

 

(b) Triplicate originals of articles of amendment shall bedelivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided under W.S. 26-24-104.

 

26-24-106. Articles of incorporation; amendment by mutual insurers.

 

 

(a) A domestic mutual insurer may amend its articles ofincorporation for any lawful purpose by affirmative vote of a majority of themembers present or represented by proxy at any regular annual meeting of itsmembers, or at any special meeting of members called for the purpose. Writtennotices of the proposed amendment shall be given members at least thirty (30)days prior to the meeting and may be given in the same manner and at the sametime as notice of the meeting is given or in any other appropriate manner.

 

(b) Upon adoption of the amendment the insurer shall preparearticles of amendment in triplicate under its corporate seal, setting forth theamendment and the date and manner of the adoption thereof. The articles ofamendment shall be executed by the insurer's president or vice-president andsecretary or assistant secretary, and be acknowledged by them before an officerauthorized by law to take acknowledgements of deeds.

 

(c) The triplicate originals of the articles of amendment shallbe delivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided for original articlesof incorporation under W.S. 26-24-104. For filing articles of amendment of thearticles of incorporation of a domestic mutual insurer the secretary of stateshall charge and collect a fee of ten dollars ($10.00), which shall be creditedto the general fund.

 

26-24-107. Stock of domestic insurer to be paid for in cash;exceptions.

 

 

(a) Except where issued in exchange for other securities forpurposes of merger, bulk reinsurance, acquisition of control of another insureras provided for in this chapter or as stock dividend on a split of stock, nodomestic stock insurer shall issue its shares except upon payment in full ofthe subscription price thereof, not less than par value, in cash.

 

(b) The value at which any such consideration, other thanmoney, shall be carried in the insurer's financial statement shall bedetermined as provided in W.S. 26-6-301 through 26-6-304.

 

26-24-108. Domestic insurers to engage in insurance businessexclusively; exception as to title insurers.

 

Nodomestic insurer shall engage in any business other than the insurance businessand activities reasonably and necessarily incidental thereto, except that atitle insurer may also engage in the title abstracting business and act as anescrow agent.

 

26-24-109. Initial requirements of domestic mutual insurers; authorizedtransactions.

 

 

(a) If newly organized, a domestic mutual insurer may beauthorized to transact any one (1) of the kinds of insurance listed in theschedule in subsection (b) of this section.

 

(b) When applying for an original certificate of authority, theinsurer shall:

 

(i) Be otherwise qualified therefor under this code;

 

(ii) Have received and accepted bona fide applications as tosubstantial insurable subjects for insurance coverage of a substantialcharacter of the kind of insurance proposed to be transacted;

 

(iii) Have collected in cash the full premium therefor at a ratenot less than that usually charged by other insurers for comparable coverages;and

 

(iv) Have surplus funds on hand and deposited as of the date theinsurance coverages become effective; or

 

(v) Instead of the applications, premiums and surplus, depositand thereafter maintain surplus in accordance with that part of the followingschedule which applies to the one (1) kind of insurance the insurer proposes totransact:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

 

 

 

 

 

Max.

Deposit

Deposit

 

Min.

Min.

 

Min.

Amt.

of Min.

of

Kind of

No.

No.

Minimum

Amt.

Ins. ea.

Surplus

Surplus

Insur-

of Apps.

Subjects

Premium

Ins. ea.

Subject

Funds

in Lieu

ance

Accepted

Covered

Collected

Subject

(v)

(vi)

(vi)

 

 

 

 

 

 

 

 

Life (i)

200

200

Annual

$ 1,000

$ 2,500

$ 50,000

$ 150,000

Disability

200

200

Quarterly

$ 10

$ 25

$ 50,000

$ 150,000

(ii)

 

 

 

(Weekly

(Weekly

 

 

 

 

 

 

Indem.)

Indem.)

 

 

Property

100

250

Annual

$ 1,000

$ 3,000

$ 50,000

$ 200,000

(iii)

 

 

 

 

 

 

 

Casualty

150

200

Annual

$ 1,000

$ 10,000

$ 100,000

$ 200,000

(iv)

 

 

 

 

 

 

 

excluding

 

 

 

 

 

 

 

surety &

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

Casualty

200

500

Quarterly

$ 1,000

$ 10,000

$ 150,000

$ 250,000

with

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

 

(c) In addition to surplus deposited and thereafter to be maintainedas shown in columns (g) or (h) of the schedule provided in paragraph (b)(v) ofthis section, the insurer when first authorized shall have on hand surplusfunds, which it can thereafter expend in the conduct of its business, in anamount not less than fifty thousand dollars ($50,000.00) or fifty percent (50%)of the deposited surplus required of it under the schedule, whichever islarger.

 

(d) The following provisions are applicable to the scheduleprovided in paragraph (b)(v) of this section and provisions as indicated bylike roman numerals appearing in that schedule:

 

(i) No group insurance or term policies for terms of less thanten (10) years shall be included;

 

(ii) No group, blanket or family plans of insurance shall beincluded. Instead of weekly indemnity a like premium value in medical,surgical and hospital benefits may be provided. Any accidental death ordismemberment benefit provided shall not exceed two thousand five hundreddollars ($2,500.00);

 

(iii) Only insurance of the owner's interest in real property maybe included;

 

(iv) Casualty insurance shall include insurance of legalliability for bodily injury and property damage, to which the maximum andminimum insured amounts apply;

 

(v) The maximums provided for in column (f) of the schedule arenet of applicable reinsurance;

 

(vi) The deposit of surplus in the amount specified in columns(g) and (h) of the schedule shall thereafter be maintained unimpaired. Thedeposit is subject to chapter 8 of this code.

 

26-24-110. Bond or deposit required of domestic mutual insurers.

 

 

(a) Before soliciting any applications for insurance requiredunder W.S. 26-24-109 as qualifications for the original certificate ofauthority, the incorporators of the proposed insurer shall file with thecommissioner a corporate surety bond in the penalty of fifteen thousand dollars($15,000.00), in favor of the state and for the use and benefit of the state ofthe applicant members and creditors of the corporation. The bond shall beconditioned for:

 

(i) The prompt return to applicant members of all premiumscollected in advance;

 

(ii) Payment of all indebtedness of the corporation; and

 

(iii) Payment of costs incurred by the state in case of any legalproceedings for liquidation or dissolution of the corporation, if thecorporation fails to complete its organization and secure a certificate ofauthority within one (1) year from the date of its certificate ofincorporation.

 

(b) Instead of the bond specified in subsection (a) of thissection, the incorporators may deposit with the commissioner fifteen thousanddollars ($15,000.00) in cash or United States government bonds, negotiable andpayable to the bearer, with a market value at all times of not less thanfifteen thousand dollars ($15,000.00), to be held in trust upon the sameconditions as required for the bond.

 

(c) Any bond filed or deposit or remaining portion thereof heldunder this section shall be released and discharged upon settlement andtermination of all liabilities against it.

 

26-24-111. Applications for domestic mutual insurance; solicitation bylicensed agents.

 

 

(a) Upon receipt of the commissioner's approval of the bond ordeposit as provided in W.S. 26-24-110, the directors and officers of theproposed domestic mutual insurer may commence solicitation of the requisiteapplications for insurance policies and may receive deposits of premiumsthereon.

 

(b) The applications shall be in writing signed by theapplicant, covering subjects of insurance resident, located or to be performedin this state.

 

(c) All applications shall provide that:

 

(i) Issuance of the policy is contingent upon the insurerqualifying for and receiving a certificate of authority;

 

(ii) No insurance is in effect until the certificate of authorityis issued; and

 

(iii) The prepaid premium or deposit, and membership or policyfee, if any, shall be refunded in full to the applicant if organization is notcompleted and the certificate of authority is not issued and received by theinsurer before a specified date which shall be not later than one (1) yearafter the date of the certificate of incorporation.

 

(d) All qualifying premiums collected shall be in cash.

 

(e) Solicitation for qualifying applicants for insurance shallbe by licensed agents of the corporation, and the commissioner, upon thecorporation's application therefor, shall issue temporary agent's licensesexpiring on the date specified pursuant to paragraph (c)(iii) of this sectionto individuals qualified as for a resident agent's license except as to thetaking or passing of an examination. The commissioner may suspend or revoke anylicense for any of the causes and pursuant to the same procedures as areapplicable to suspension or revocation of licenses of agents in general underchapter 9 of this code.

 

26-24-112. Deposit in trust of premiums collected by mutual insurer;release upon issuance of certificate of authority.

 

 

(a) All sums collected by a domestic mutual corporation aspremiums or fees on qualifying applications for insurance therein shall bedeposited in trust in a bank or trust company in this state under a writtentrust agreement consistent with this section and with W.S. 26-24-111(c)(iii)and 26-24-113. The corporation shall file an executed copy of the trust agreementwith the commissioner.

 

(b) Upon issuance to the corporation of a certificate ofauthority as an insurer for the kind of insurance for which the applicationswere solicited, all funds held in trust become the insurer's funds, and theinsurer shall thereafter in due course issue and deliver its policies for whichpremiums were paid and accepted. The insurance provided by the policies iseffective as of the date of the certificate of authority or thereafter as thepolicies provide.

 

26-24-113. Failure of domestic mutual insurer to qualify.

 

Ifthe proposed domestic insurer fails to complete its organization and to secureits original certificate of authority within one (1) year from the date of itscertificate of incorporation, its corporate powers cease, and the commissionershall return or cause to be returned to the persons entitled thereto alladvance deposits or payments of premiums held in trust under W.S. 26-24-112.

 

26-24-114. Additional kinds of insurance mutuals.

 

Afterbeing authorized to transact one (1) kind of insurance, a mutual insurer may beauthorized to transact any additional kinds of insurance as are permitted underW.S. 26-3-107, while otherwise in compliance with this code and whilemaintaining unimpaired surplus funds in an amount not less than the amount ofpaid-in capital stock and surplus required to be maintained by a domestic stockinsurer transacting the same kinds of insurance.

 

26-24-115. Membership in mutuals.

 

 

(a) Each policyholder of a domestic mutual insurer, other thana reinsurance contract, is a member of the insurer with all rights andobligations of the membership, and the policy shall so specify.

 

(b) Any person, government or governmental agency, state orpolitical subdivision thereof, public or private corporation, board,association, firm, estate, trustee or fiduciary may be a member of a domestic,foreign or alien mutual insurer. Any officer, stockholder, trustee or legalrepresentative of any such corporation, board, association or estate may be recognizedas acting for or on its behalf for the purpose of the membership, and is notpersonally liable upon any contract of insurance for acting in thatrepresentative capacity.

 

(c) Any domestic corporation may participate as a member of amutual insurer as an incidental purpose for which the corporation is organized,and as such is granted the rights and powers expressly conferred.

 

26-24-116. Bylaws of mutuals.

 

 

(a) A domestic mutual insurer shall have bylaws for thegovernment of its affairs. The insurer's initial board of directors shall adoptoriginal bylaws, subject to the approval of the insurer's members at the nextmeeting of members.

 

(b) The bylaws shall contain provisions, consistent with thiscode, relating to:

 

(i) The voting rights of members;

 

(ii) Election of directors, and the number, qualifications,terms of office and powers of directors;

 

(iii) Annual and special meetings of members;

 

(iv) The number, designation, election, terms and powers andduties of the corporate officers;

 

(v) Deposit, custody, disbursement and accounting for corporatefunds;

 

(vi) Fidelity bonds covering any officers and employees of theinsurer handling its funds, to be issued by a corporate surety and to be in anamount as may be reasonable; and

 

(vii) Any other matters as may be customary, necessary orconvenient for the management or regulation of corporate affairs.

 

(c) The insurer shall promptly file with the commissioner acopy, certified by the insurer's secretary, of its bylaws and of everymodification thereof or addition thereto. The commissioner, after a hearingheld thereon, shall disapprove any bylaw provision he deems unlawful,unreasonable, inadequate, unfair or detrimental to the proper interests orprotection of the insurer's members or any class thereof. The insurer, afterreceiving written notice of disapproval and during the existence of thatdisapproval, shall not carry out any bylaw provision disapproved.

 

26-24-117. Meetings of members of domestic mutual insurers; where held;annual meeting.

 

 

(a) Meetings of members of a domestic mutual insurer shall beheld in the city or town of its registered office in this state, except as mayotherwise be provided in the insurer's bylaws with the commissioner's approval.

 

(b) Each domestic mutual insurer, during each calendar yearshall:

 

(i) Hold the annual meeting of its members to fill vacanciesexisting or occurring in the board of directors;

 

(ii) Receive and consider reports of the insurer's officers asto its affairs; and

 

(iii) Transact any other business as may properly be broughtbefore it.

 

(c) Written notice of the time and place of the annual meetingof members shall be given members not less than thirty (30) days prior to themeeting. Notice may be given by imprinting the notice plainly on the policiesissued by the insurer or in any other appropriate manner. Any change of thedate or place of the annual meeting shall be made only by an annual meeting ofmembers. Notice of any change, among other appropriate methods, may be given:

 

(i) By imprinting the new date or place on all policies whichwill be in effect as of the date of the changed meeting; or

 

(ii) Unless the commissioner otherwise orders, through policiesissued after the date of the annual meeting at which the change was made and inpremium notices and renewal certificates issued during the twenty-four (24)months immediately following the meeting.

 

(d) If the required annual meeting of members has not been heldduring the previous calendar year, the commissioner, upon written request ofany officer, director or member of the insurer, shall cause written notice ofthe meeting to be given to the insurer's members, and the meeting shall be heldas soon as reasonably possible thereafter.

 

26-24-118. Meetings of members of domestic mutual insurers; specialmeetings.

 

 

(a) A special meeting of the members of a mutual insurer may beheld for any lawful purpose. The meeting shall be called by the corporatesecretary pursuant to request of the insurer's president or of its board ofdirectors, or upon request in writing signed by not less than one-tenth (1/10)of the insurer's members. The meeting shall be held at such time as thesecretary may fix, but not less than ten (10) nor more than thirty (30) days afterreceipt of the request. If the secretary fails to issue the call, thepresident, directors or members making the request may do so.

 

(b) Not less than ten (10) days written notice of the meetingshall be given. Notice addressed to the insurer's members at their post officeaddresses last of record with the insurer and deposited, postage prepaid, in aletter depository of the United States post office, is deemed to have beengiven when so mailed. Instead of a mailed notice the insurer may publish the noticein any publication as shall afford a majority of its members a reasonableopportunity to have actual advance notice of the meeting. The notice shallstate the purposes of the meeting, and no business shall be transacted at themeeting of which notice was not so given.

 

26-24-119. Voting rights of members of mutual insurers.

 

 

(a) Each member of a mutual insurer is entitled to one (1) voteupon each matter coming to a vote at meetings of members.

 

(b) A member has the right to vote in person or by his writtenproxy filed with the corporate secretary not less than five (5) days prior tothe meeting. No proxy shall be made irrevocable, nor be valid beyond theearlier of the following dates:

 

(i) The date of expiration set forth in the proxy; or

 

(ii) The date of termination of membership; or

 

(iii) Five (5) years from the date of execution of the proxy.

 

(c) No member's vote upon any proposal to divest the insurer ofits business or assets, or the major part thereof, shall be registered or takenexcept in person or by proxy newly executed and specific as to the matter to bevoted upon.

 

26-24-120. Information to stockholders of domestic stock insurers;proxy regulations.

 

 

(a) This section applies to all domestic stock insurers except:

 

(i) A domestic stock insurer having less than one hundred (100)stockholders, except that if ninety-five percent (95%) or more of the insurer'sstock is owned or controlled by a parent or affiliated insurer, this sectiondoes not apply to that insurer unless its remaining shares are held by fivehundred (500) or more stockholders;

 

(ii) Domestic stock insurers which file with the securities andexchange commission forms of proxies, consents and authorizations pursuant tothe Securities Exchange Act of 1934 (15 U.S.C. 78aet seq.), as amended.

 

(b) Any domestic stock insurer subject to this section shallseasonably furnish its stockholders in advance of stockholders meetings,information in writing reasonably adequate to inform them of all matters to bepresented by the insurer's management for consideration of stockholders at themeeting.

 

(c) No person shall solicit a proxy, consent or authorizationin respect of any stock of a domestic stock insurer subject to this sectionunless he furnishes the person solicited with written information reasonablyadequate as to:

 

(i) The material matters in regard to which the powerssolicited are proposed to be used; and

 

(ii) The persons on whose behalf the solicitation is made, andthe interest of the persons in relation to those matters.

 

(d) No person shall furnish to another, information which theinformer knows or has reason to believe is false or misleading as to anymaterial fact, or which fails to state any material fact reasonably necessaryto prevent any other statement made from being misleading.

 

(e) Except as provided in subsection (f) of this section, theform of all proxies shall:

 

(i) Conspicuously state on whose behalf the proxy is solicited;

 

(ii) Provide for dating the proxy;

 

(iii) Impartially identify each matter or group of relatedmatters intended to be acted upon;

 

(iv) Provide means for the principal to instruct the vote of hisshares as to approval or disapproval of each matter or group, other thanelection to office; and

 

(v) Be legibly printed, with context suitably organized.

 

(f) A proxy may confer discretionary authority:

 

(i) As to matters in which choice is not specified pursuant toparagraph (e)(iv) of this section, if the form conspicuously states how it isintended to vote the proxy or authorization in each such case; and

 

(ii) As to other matters which may come before the meeting butunknown for a reasonable time prior to the solicitation by the persons on whosebehalf the solicitation is made.

 

(g) No proxy shall confer authority to vote:

 

(i) For election of any person to any office for which a bonafide nominee is not named in the proxy statement; or

 

(ii) In any annual meeting, or adjournment thereof, other thanthe annual meeting immediately following the date on which the proxy statementand form are furnished stockholders.

 

(h) The commissioner may promulgate reasonable rules andregulations to carry out the purpose of this section, and in so doing shallconsider rules and regulations promulgated for similar purposes by theinsurance supervisory officials of other states.

 

26-24-121. Boards of directors.

 

 

(a) The affairs of each domestic insurer shall be managed by aboard of directors consisting of not less than five (5) nor more thantwenty-one (21) directors.

 

(b) Directors, other than initial directors named in theinsurer's articles of incorporation, shall be elected by the members orstockholders of a domestic insurer at the annual meeting of stockholders ormembers. Directors may be elected for terms of not more than five (5) yearseach and until their successors are elected and have qualified. If thedirectors are to be elected for terms of more than one (1) year, the insurer'sbylaws shall provide for a staggered term system under which the terms of aproportionate part of the members of the board of directors shall expire on thedate of each annual meeting of stockholders or members.

 

(c) A director of a stock insurer shall be a stockholderthereof, and a director of a mutual insurer shall be a policyholder thereof.

 

(d) As to an insurer operating as an authorized insurer only inthe state of Wyoming, a majority of the members of the insurer's board ofdirectors shall be citizens of and shall actually reside in this state.

 

(e) Any executive committee of a board of directors shallconsist of not less than three (3) directors, a majority of whom shall residein this state.

 

26-24-122. Notice of changes of officers and directors.

 

Aninsurer shall promptly give the commissioner written notice of any change ofpersonnel among its directors or corporate officers.

 

26-24-123. Management in national emergency; purpose of emergencyprovisions.

 

Thespecific purpose of W.S. 26-24-124 through 26-24-126 is to facilitate thecontinued operation of domestic insurers if a national emergency is caused byan attack on the United States or by a nuclear, atomic or other disaster whichmakes it impossible or impracticable for an insurer to conduct its business instrict accord with applicable provisions of law, its bylaws or its charter.

 

26-24-124. Emergency bylaws.

 

Theboard of directors of any domestic insurer may at any time adopt emergencybylaws, subject to repeal or change by action of those having power to adoptregular bylaws for the insurer, which shall be operative during a nationalemergency and which may, notwithstanding any different provisions of theregular bylaws, or of the applicable statutes, or of the insurer's charter,make any provision that may be reasonably necessary for the insurer's operationduring the period of the emergency.

 

26-24-125. Emergency provisions in lieu of bylaws.

 

 

(a) If the board of directors of a domestic insurer does notadopt emergency bylaws, the following provisions are effective in case of anational emergency:

 

(i) Three (3) directors constitute a quorum for the transactionof business at all board meetings;

 

(ii) Any board vacancy may be filled by a majority of theremaining directors, though less than a quorum, or by a sole remaining director;

 

(iii) If there are no surviving directors, but at least three (3)vice-presidents of the insurer survive, the three (3) vice-presidents with thelongest term of service are the directors and possess all of the powers of theprevious board of directors and any other powers granted under this chapter orby subsequently enacted legislation. By majority vote the emergency board ofdirectors may elect other directors. If there are not at least three (3)surviving vice-presidents, the commissioner or designated person exercising thepowers of the insurance commissioner of this state shall appoint three (3)persons as directors who possess all of the powers of the previous board ofdirectors and any other powers granted under this chapter or by subsequently enactedlegislation, and these persons by majority vote may elect other directors.

 

26-24-126. Emergency succession of officers; change of home officelocation.

 

 

(a) The board of directors of a domestic insurer, byresolution, may provide that:

 

(i) In case of a national emergency and in case of the death orincapacity of the president, the secretary or the treasurer of the insurer,that officer, or any of them, shall be succeeded in the office by the personnamed or described in a succession list adopted by the board of directorswhich:

 

(A) May be on the basis of named persons or position titles;

 

(B) Shall establish the order of priority; and

 

(C) May prescribe the conditions under which the powers of theoffice shall be exercised.

 

(ii) In case of a national emergency the insurer's home officeor principal place of business shall be at a location specified in theresolution, except that the resolution may provide for alternate locations andestablish an order of preference.

 

26-24-127. Pecuniary interests of officers or directors prohibited.

 

 

(a) Any officer or director, or any member of any committee oran employee of a domestic insurer, who is charged with the duty of investing orhandling the insurer's funds shall not:

 

(i) Deposit or invest those funds except in the insurer'scorporate name;

 

(ii) Borrow the insurer's funds;

 

(iii) Be pecuniarily interested in any loan, pledge or deposit,security, investment, sale, purchase, exchange, reinsurance or other similartransaction or property of the insurer except as a stockholder or member;

 

(iv) Take or receive to his own use any fee, brokerage,commission, gift or other consideration for or on account of any transactionmade by or on behalf of the insurer.

 

(b) No insurer shall guarantee any financial obligation of anyof its officers or directors.

 

(c) This section does not prohibit any director or officer, ormember of a committee or employee from:

 

(i) Becoming a policyholder of the insurer and enjoying theusual rights provided for its policyholders;

 

(ii) Participating as beneficiary in any pension trust, deferredcompensation plan, profit sharing plan or stock option plan authorized by theinsurer and to which he may be eligible; or

 

(iii) Receiving a reasonable fee for lawful services actuallyrendered to the insurer.

 

(d) The commissioner, by regulation, may define and permitadditional exceptions to the prohibition contained in subsection (a) of thissection solely to enable payment:

 

(i) Of reasonable compensation to a director who is nototherwise an insurer's officer or employee; or

 

(ii) To a corporation or firm in which a director is interested,for necessary services performed or sales or purchases made to or for theinsurer in the ordinary course of the insurer's business and in the usualprivate professional or business capacity of the director, corporation or firm.

 

26-24-128. Management and exclusive agency contracts.

 

 

(a) No domestic insurer shall make any contract in which anyperson is granted or is to enjoy in fact the management of the insurer to thesubstantial exclusion of its board of directors, or to have the controlling orpreemptive right to produce substantially all insurance business for theinsurer, or, if an officer, director or otherwise part of the insurer'smanagement, is to receive any commission, bonus or compensation based upon thevolume of the insurer's business or transactions, unless the contract is filedwith and approved by the commissioner. The contract is approved unless disapprovedby the commissioner within twenty (20) days from the date of filing, subject toany reasonable time extension the commissioner requires by notice given withinthe twenty (20) days. Any disapproval shall be delivered to the insurer inwriting, stating the grounds for the disapproval.

 

(b) Any contract specified in subsection (a) of this sectionshall provide that any manager or producer of its business, within ninety (90)days after expiration of each calendar year, shall furnish the insurer's boardof directors a written statement of amounts received under or on account of thecontract and amounts expended thereunder during the calendar year, includingthe emoluments received therefrom by the directors, officers and otherprincipal management personnel of the manager or producer, and with anyclassification of items and further detail as the insurer's board of directorsreasonably requires.

 

(c) The commissioner shall disapprove any contract specified inthis section if he finds that it:

 

(i) Subjects the insured to excessive charges;

 

(ii) Is to extend for an unreasonable length of time;

 

(iii) Does not contain fair and adequate standards ofperformance; or

 

(iv) Contains other inequitable provisions or provisions whichimpair the proper interests of stockholders or policyholders of the insurer.

 

(d) The commissioner, after a hearing held thereon, maywithdraw his approval of any contract he approved, if he finds that the basisof his original approval no longer exists, or that the contract, in actualoperation, is subject to disapproval on any of the grounds referred to insubsection (c) of this section.

 

(e) This section does not apply to contracts entered into priorto January 1, 1968, nor to extensions or amendments to those contracts.

 

26-24-129. Home office records and assets; penalty for removal;out-of-state branch operations.

 

 

(a) Any domestic insurer shall:

 

(i) Have and maintain its principal place of business and homeoffice in this state;

 

(ii) Keep in the principal place of business accurate andcomplete accounts and records of its assets, transactions and affairs inaccordance with the usual and accepted principles and practices of insuranceaccounting and record keeping as applicable to the kinds of insurance the insurertransacts;

 

(iii) Have and maintain its assets in this state, except as to:

 

(A) Real property and personal property appurtenant theretolawfully owned by the insurer and located outside this state; and

 

(B) Any property of the insurer as may be customary, necessaryand convenient to enable and facilitate the operation of its branch officeslocated outside this state as referred to in subsection (d) of this section.

 

(b) No person shall:

 

(i) Remove all or a material part of the records or assets of adomestic insurer from this state except:

 

(A) Pursuant to a plan of merger, consolidation or bulkreinsurance which the commissioner approves under this code; or

 

(B) For any reasonable purposes and periods of time as thecommissioner approves in writing in advance of the removal; or

 

(ii) Conceal the records or assets or a material part thereoffrom the commissioner;

 

(iii) Retain any records or assets or a material part thereofoutside this state beyond the period authorized in the commissioner's approvalunder which the records were removed.

 

(c) Any person who violates any provision of subsection (b) ofthis section is guilty of a felony and, upon conviction, shall be punished by afine of not more than ten thousand dollars ($10,000.00), or by imprisonment inthe penitentiary for not more than five (5) years, or both. The commissionermay also institute delinquency proceedings against the insurer pursuant tochapter 28 of this code.

 

(d) This section does not prohibit an insurer from:

 

(i) Establishing and maintaining branch offices in other statesif necessary or convenient to the transaction of its business and keeping inthose branch offices the detailed records and assets customary and necessaryfor the servicing of its insurance in force and affairs in the territory servedby the branch office, as long as the records and assets are made readilyavailable at the branch office for examination by the commissioner at hisrequest;

 

(ii) Having, depositing or transmitting the insurer's funds andassets in or to jurisdictions outside of this state required by the law of thatjurisdiction or as reasonably and customarily required in the regular course ofits business.

 

26-24-130. Voucher required for disbursements.

 

 

(a) No insurer shall make any disbursement of twenty-fivedollars ($25.00) or more, unless evidenced by a voucher or other documentcorrectly describing the consideration for the payment and supported by a checkor receipt endorsed or signed by or on behalf of the person receiving themoney.

 

(b) If the disbursement is for services and reimbursement, thevoucher or other document, or some other provision referred to in the voucheror other document, shall describe the services and itemize the expenditures.

 

(c) If the disbursement is in connection with any matterpending before any public body or public official, the voucher or otherdocument shall also correctly describe the nature of the matter and of theinsurer's interest therein.

 

(d) If a voucher cannot be obtained, the expenditure shall besupported by an affidavit executed by an officer of the insurer stating thereasons for the inability to obtain a voucher and the particulars of theexpenditure as otherwise required by this section.

 

26-24-131. Borrowing by insurers.

 

 

(a) A domestic stock or mutual insurer may borrow money todefray the expenses of its organization, provide it with surplus funds or forany other purpose of its business, upon a written agreement that the money isrequired to be repaid only out of the insurer's surplus in excess of thatstipulated in the agreement. The agreement may provide for interest notexceeding six percent (6%) per annum, which interest shall or shall notconstitute a liability of the insurer as to its funds other than the excess ofsurplus, as stipulated in the agreement. No commission or promotion expenseshall be paid in connection with any such loan, except that if public offeringand sale is made of the loan securities, the insurer may pay the reasonablecosts thereof the commissioner approves.

 

(b) Any money borrowed as provided in subsection (a) of thissection, together with the interest thereon if stipulated in the agreement,shall not form a part of the insurer's legal liabilities except as to itssurplus in excess of the amount stipulated in the agreement, or be the basis ofany setoff. Until the money is repaid financial statements filed or publishedby the insurer shall show as a footnote thereto the amount then unpaid togetherwith any interest thereon accrued but unpaid.

 

(c) Any loan under this section is subject to thecommissioner's approval. The insurer, in advance of the loan, shall file withthe commissioner a statement of the purpose of the loan and a copy of theproposed loan agreement. The loan and agreement are deemed approved unlesswithin fifteen (15) days from the date of filing, the insurer is notified ofthe commissioner's disapproval and the reasons therefor. The commissioner shalldisapprove any proposed loan or agreement if he finds the loan is unnecessaryor excessive for the purpose intended, or that the terms of the loan agreementare not fair and equitable to the parties and to other similar lenders, if any,to the insurer, or that the information filed by the insurer is inadequate.

 

(d) Any loan, under this section, or substantial portionthereof, to a mutual insurer shall be repaid by the insurer when no longerreasonably necessary for the purpose originally intended. No repayment of aloan shall be made by a mutual insurer unless the commissioner approves it inadvance.

 

(e) This section does not apply to other kinds of loansobtained by the insurer in ordinary course of business, nor to loans secured bypledge or mortgage of assets.

 

26-24-132. Participating policies.

 

 

(a) If provided for in its articles of incorporation orcharter, a stock insurer or mutual insurer may:

 

(i) Issue any of its policies or contracts with or withoutparticipation in profits, savings, unabsorbed portions of premiums or surplus;

 

(ii) Classify policies issued and risks insured on aparticipating and nonparticipating basis; and

 

(iii) Subject to W.S. 26-16-503, determine the right toparticipate and the extent of participation of any classes of policies. Anysuch classification or determination shall be reasonable.

 

(b) A life insurer may issue both participating andnonparticipating policies or contracts only if the right or absence of right toparticipate is reasonably related to the premium charged.

 

(c) After the third policy year, no dividend, otherwise earned,is contingent upon the payment of renewal premium on any policy or contract.

 

26-24-133. Dividends to stockholders.

 

 

(a) No domestic stock insurer shall pay any cash dividend tostockholders except out of that part of its available and accumulated surplusfunds which is derived from realized net operating profits on its business andrealized capital gains.

 

(b) A cash dividend otherwise lawful may be payable out of theinsurer's earned surplus even though its total surplus is then less than theaggregate of its past contributed surplus resulting from issuance of itscapital stock at a price in excess of the par value thereof.

 

(c) A stock dividend may be paid out of any available surplusfunds in excess of the aggregate amount of surplus advanced to the insurerunder arrangements authorized in W.S. 26-24-131 and then remaining unpaid bythe insurer.

 

(d) Payment of a stock dividend is otherwise subject to W.S.17-16-623.

 

26-24-134. Dividends to policyholders of mutual insurer.

 

 

(a) The directors of a domestic mutual insurer may apportionand pay or credit to its members dividends only out of that part of its surplusfunds which represents net realized savings, net realized earnings and netrealized capital gains, all in excess of the surplus the insurer is required bylaw to maintain.

 

(b) A dividend otherwise proper may be payable out of thesavings, earnings and gains even though the insurer's total surplus is thenless than the aggregate of contributed surplus remaining unpaid by the insurer.

 

(c) A domestic stock insurer may pay dividends to holders ofits participating policies out of any available surplus funds.

 

(d) No dividend shall be paid which is inequitable, or whichunfairly discriminates as between classifications of policies or policieswithin the same classifications.

 

(e) This section is subject to W.S. 26-16-503(c).

 

26-24-135. Contingent liability of mutual member generally.

 

 

(a) Except as otherwise provided in W.S. 26-24-138 with respectto nonassessable policies, each member of a domestic mutual insurer has acontingent liability, pro rata and not one (1) for another, for the dischargeof its obligations. The contingent liability shall be in the maximum amountspecified in the insurer's articles of incorporation consistent with W.S.26-24-103(c)(iv).

 

(b) Any policy the insurer issues shall contain a statement ofthe contingent liability.

 

(c) Termination of any member's policy does not relieve themember of contingent liability for his proportion of the obligations of theinsurer which accrue while the policy is in force as provided in W.S.26-24-136.

 

(d) Unrealized contingent liability of members does notconstitute an asset of the insurer in any determination of its financialcondition.

 

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter24

CHAPTER 24 - ORGANIZATION AND CORPORATE PROCEDURES OF LEGALRESERVE STOCK AND MUTUAL INSURERS

 

26-24-101. Scope and applicability of chapter.

 

Thischapter applies only to domestic stock insurers and domestic mutual insurerstransacting or proposing to transact insurance on the cash premium or legalreserve plan, except that W.S. 26-24-115, 26-24-130 and 26-24-136 also apply toforeign and alien insurers.

 

26-24-102. Applicability of general corporation statutes; exceptions.

 

(a) The applicable provisions of the Wyoming BusinessCorporation Act apply to domestic stock and domestic mutual insurers, except asin conflict with the express provisions of this code and the reasonableimplications thereof.

 

(b) Domestic stock insurers and domestic mutual insurers areexempt from the provisions of W.S. 17-16-1630 and 17-16-1820(e).

 

26-24-103. Incorporation generally.

 

 

(a) This section applies to stock and mutual insurersincorporated in this state.

 

(b) Five (5) or more individuals may incorporate a stockinsurer. Ten (10) or more individuals may incorporate a mutual insurer. Atleast a majority of the incorporators shall be citizens of the United States.At least a majority of the incorporators shall be residents of this state.

 

(c) The incorporators shall sign and verify in triplicatearticles of incorporation in accordance with the applicable provisions of theWyoming Business Corporation Act, but subject to the following requirements:

 

(i) The name of the corporation shall comply with W.S.26-3-106. If a mutual insurer, "mutual" shall be included in thename. An alternative name may be specified for use in jurisdictions in whichconflict of name with that of another insurer or organization might otherwiseprevent the insurer from being authorized to transact insurance therein;

 

(ii) The purposes of the corporation shall be limited to thetransaction of one (1) or more kinds of insurance, as defined in this code, andthe corporation does not have power to engage in any other or additional business,except that a title insurer may engage in the title abstract business andescrow business;

 

(iii) If a stock corporation, the capital stock must consistentirely of common stock of one (1) uniform class, par value not less than onedollar ($1.00) per share, each outstanding share of which has equal rights inevery respect with every other share, and shares without par value shall not beauthorized;

 

(iv) If a mutual corporation, the articles of incorporationshall state the maximum contingent liability of members for payment of lossesand expenses incurred, other than as to nonassessable policies issued aspermitted under W.S. 26-24-137, but the liability shall not be less than one(1) nor more than six (6) annual premiums for the member's policy;

 

(v) The corporation's initial board of directors, as providedfor in the articles of incorporation, shall consist of not less than five (5)members;

 

(vi) The articles of incorporation shall specify which, if any,of the incorporators are not citizens of the United States of America or arenot residents of this state.

 

26-24-104. Articles of incorporation; generally; filing; approvalprocedure.

 

 

(a) The incorporators of a proposed domestic insurer shalldeliver the triplicate originals of the articles of incorporation to thecommissioner. The commissioner shall deliver one (1) of the originals to theattorney general of this state, and the attorney general shall examine thearticles. If the attorney general finds that the articles comply with law, heshall so certify and return the certificate and the original articles ofincorporation to the commissioner.

 

(b) If the attorney general approves the articles ofincorporation, the commissioner shall also endorse his approval upon each setof the articles and return them, together with the attorney general'scertificate, to the incorporators. The incorporators shall then file one (1)set of the articles of incorporation with the secretary of state, one (1) setwith the commissioner bearing the certification of the secretary of state andshall retain the third set in the corporate records. For the filing of articlesof incorporation of a mutual insurer, the secretary of state shall charge andcollect a filing fee of twenty-five dollars ($25.00), which shall be creditedto the general fund.

 

(c) If the attorney general finds that the proposed articles donot comply with the law, he shall refuse to approve them and shall return theset thereof to the commissioner, together with a written statement of therespects in which he finds the articles do not comply. The commissioner shallthen return all sets of the proposed articles to the proposed incorporatorstogether with the attorney general's written statement.

 

(d) The secretary of state shall not permit the filing in thatoffice of any articles of incorporation unless they bear the commissioner'sapproval endorsed thereon as provided in subsection (b) of this section.

 

(e) The approval of the attorney general or commissionerrelates only to the form and contents of the articles of incorporation and doesnot constitute approval or commitment as to any other aspect or operation ofthe proposed insurer.

 

(f) The attorney general and the commissioner shall perform allduties required of them under this section within a reasonable time after thearticles of incorporation have been submitted to the commissioner as providedin subsection (a) of this section.

 

26-24-105. Articles of incorporation; amendment by stock insurers.

 

 

(a) A domestic stock insurer may amend its articles ofincorporation for any lawful purpose through the same procedures prescribed inthe Wyoming Business Corporation Act as for business corporations in general.

 

(b) Triplicate originals of articles of amendment shall bedelivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided under W.S. 26-24-104.

 

26-24-106. Articles of incorporation; amendment by mutual insurers.

 

 

(a) A domestic mutual insurer may amend its articles ofincorporation for any lawful purpose by affirmative vote of a majority of themembers present or represented by proxy at any regular annual meeting of itsmembers, or at any special meeting of members called for the purpose. Writtennotices of the proposed amendment shall be given members at least thirty (30)days prior to the meeting and may be given in the same manner and at the sametime as notice of the meeting is given or in any other appropriate manner.

 

(b) Upon adoption of the amendment the insurer shall preparearticles of amendment in triplicate under its corporate seal, setting forth theamendment and the date and manner of the adoption thereof. The articles ofamendment shall be executed by the insurer's president or vice-president andsecretary or assistant secretary, and be acknowledged by them before an officerauthorized by law to take acknowledgements of deeds.

 

(c) The triplicate originals of the articles of amendment shallbe delivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided for original articlesof incorporation under W.S. 26-24-104. For filing articles of amendment of thearticles of incorporation of a domestic mutual insurer the secretary of stateshall charge and collect a fee of ten dollars ($10.00), which shall be creditedto the general fund.

 

26-24-107. Stock of domestic insurer to be paid for in cash;exceptions.

 

 

(a) Except where issued in exchange for other securities forpurposes of merger, bulk reinsurance, acquisition of control of another insureras provided for in this chapter or as stock dividend on a split of stock, nodomestic stock insurer shall issue its shares except upon payment in full ofthe subscription price thereof, not less than par value, in cash.

 

(b) The value at which any such consideration, other thanmoney, shall be carried in the insurer's financial statement shall bedetermined as provided in W.S. 26-6-301 through 26-6-304.

 

26-24-108. Domestic insurers to engage in insurance businessexclusively; exception as to title insurers.

 

Nodomestic insurer shall engage in any business other than the insurance businessand activities reasonably and necessarily incidental thereto, except that atitle insurer may also engage in the title abstracting business and act as anescrow agent.

 

26-24-109. Initial requirements of domestic mutual insurers; authorizedtransactions.

 

 

(a) If newly organized, a domestic mutual insurer may beauthorized to transact any one (1) of the kinds of insurance listed in theschedule in subsection (b) of this section.

 

(b) When applying for an original certificate of authority, theinsurer shall:

 

(i) Be otherwise qualified therefor under this code;

 

(ii) Have received and accepted bona fide applications as tosubstantial insurable subjects for insurance coverage of a substantialcharacter of the kind of insurance proposed to be transacted;

 

(iii) Have collected in cash the full premium therefor at a ratenot less than that usually charged by other insurers for comparable coverages;and

 

(iv) Have surplus funds on hand and deposited as of the date theinsurance coverages become effective; or

 

(v) Instead of the applications, premiums and surplus, depositand thereafter maintain surplus in accordance with that part of the followingschedule which applies to the one (1) kind of insurance the insurer proposes totransact:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

 

 

 

 

 

Max.

Deposit

Deposit

 

Min.

Min.

 

Min.

Amt.

of Min.

of

Kind of

No.

No.

Minimum

Amt.

Ins. ea.

Surplus

Surplus

Insur-

of Apps.

Subjects

Premium

Ins. ea.

Subject

Funds

in Lieu

ance

Accepted

Covered

Collected

Subject

(v)

(vi)

(vi)

 

 

 

 

 

 

 

 

Life (i)

200

200

Annual

$ 1,000

$ 2,500

$ 50,000

$ 150,000

Disability

200

200

Quarterly

$ 10

$ 25

$ 50,000

$ 150,000

(ii)

 

 

 

(Weekly

(Weekly

 

 

 

 

 

 

Indem.)

Indem.)

 

 

Property

100

250

Annual

$ 1,000

$ 3,000

$ 50,000

$ 200,000

(iii)

 

 

 

 

 

 

 

Casualty

150

200

Annual

$ 1,000

$ 10,000

$ 100,000

$ 200,000

(iv)

 

 

 

 

 

 

 

excluding

 

 

 

 

 

 

 

surety &

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

Casualty

200

500

Quarterly

$ 1,000

$ 10,000

$ 150,000

$ 250,000

with

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

 

(c) In addition to surplus deposited and thereafter to be maintainedas shown in columns (g) or (h) of the schedule provided in paragraph (b)(v) ofthis section, the insurer when first authorized shall have on hand surplusfunds, which it can thereafter expend in the conduct of its business, in anamount not less than fifty thousand dollars ($50,000.00) or fifty percent (50%)of the deposited surplus required of it under the schedule, whichever islarger.

 

(d) The following provisions are applicable to the scheduleprovided in paragraph (b)(v) of this section and provisions as indicated bylike roman numerals appearing in that schedule:

 

(i) No group insurance or term policies for terms of less thanten (10) years shall be included;

 

(ii) No group, blanket or family plans of insurance shall beincluded. Instead of weekly indemnity a like premium value in medical,surgical and hospital benefits may be provided. Any accidental death ordismemberment benefit provided shall not exceed two thousand five hundreddollars ($2,500.00);

 

(iii) Only insurance of the owner's interest in real property maybe included;

 

(iv) Casualty insurance shall include insurance of legalliability for bodily injury and property damage, to which the maximum andminimum insured amounts apply;

 

(v) The maximums provided for in column (f) of the schedule arenet of applicable reinsurance;

 

(vi) The deposit of surplus in the amount specified in columns(g) and (h) of the schedule shall thereafter be maintained unimpaired. Thedeposit is subject to chapter 8 of this code.

 

26-24-110. Bond or deposit required of domestic mutual insurers.

 

 

(a) Before soliciting any applications for insurance requiredunder W.S. 26-24-109 as qualifications for the original certificate ofauthority, the incorporators of the proposed insurer shall file with thecommissioner a corporate surety bond in the penalty of fifteen thousand dollars($15,000.00), in favor of the state and for the use and benefit of the state ofthe applicant members and creditors of the corporation. The bond shall beconditioned for:

 

(i) The prompt return to applicant members of all premiumscollected in advance;

 

(ii) Payment of all indebtedness of the corporation; and

 

(iii) Payment of costs incurred by the state in case of any legalproceedings for liquidation or dissolution of the corporation, if thecorporation fails to complete its organization and secure a certificate ofauthority within one (1) year from the date of its certificate ofincorporation.

 

(b) Instead of the bond specified in subsection (a) of thissection, the incorporators may deposit with the commissioner fifteen thousanddollars ($15,000.00) in cash or United States government bonds, negotiable andpayable to the bearer, with a market value at all times of not less thanfifteen thousand dollars ($15,000.00), to be held in trust upon the sameconditions as required for the bond.

 

(c) Any bond filed or deposit or remaining portion thereof heldunder this section shall be released and discharged upon settlement andtermination of all liabilities against it.

 

26-24-111. Applications for domestic mutual insurance; solicitation bylicensed agents.

 

 

(a) Upon receipt of the commissioner's approval of the bond ordeposit as provided in W.S. 26-24-110, the directors and officers of theproposed domestic mutual insurer may commence solicitation of the requisiteapplications for insurance policies and may receive deposits of premiumsthereon.

 

(b) The applications shall be in writing signed by theapplicant, covering subjects of insurance resident, located or to be performedin this state.

 

(c) All applications shall provide that:

 

(i) Issuance of the policy is contingent upon the insurerqualifying for and receiving a certificate of authority;

 

(ii) No insurance is in effect until the certificate of authorityis issued; and

 

(iii) The prepaid premium or deposit, and membership or policyfee, if any, shall be refunded in full to the applicant if organization is notcompleted and the certificate of authority is not issued and received by theinsurer before a specified date which shall be not later than one (1) yearafter the date of the certificate of incorporation.

 

(d) All qualifying premiums collected shall be in cash.

 

(e) Solicitation for qualifying applicants for insurance shallbe by licensed agents of the corporation, and the commissioner, upon thecorporation's application therefor, shall issue temporary agent's licensesexpiring on the date specified pursuant to paragraph (c)(iii) of this sectionto individuals qualified as for a resident agent's license except as to thetaking or passing of an examination. The commissioner may suspend or revoke anylicense for any of the causes and pursuant to the same procedures as areapplicable to suspension or revocation of licenses of agents in general underchapter 9 of this code.

 

26-24-112. Deposit in trust of premiums collected by mutual insurer;release upon issuance of certificate of authority.

 

 

(a) All sums collected by a domestic mutual corporation aspremiums or fees on qualifying applications for insurance therein shall bedeposited in trust in a bank or trust company in this state under a writtentrust agreement consistent with this section and with W.S. 26-24-111(c)(iii)and 26-24-113. The corporation shall file an executed copy of the trust agreementwith the commissioner.

 

(b) Upon issuance to the corporation of a certificate ofauthority as an insurer for the kind of insurance for which the applicationswere solicited, all funds held in trust become the insurer's funds, and theinsurer shall thereafter in due course issue and deliver its policies for whichpremiums were paid and accepted. The insurance provided by the policies iseffective as of the date of the certificate of authority or thereafter as thepolicies provide.

 

26-24-113. Failure of domestic mutual insurer to qualify.

 

Ifthe proposed domestic insurer fails to complete its organization and to secureits original certificate of authority within one (1) year from the date of itscertificate of incorporation, its corporate powers cease, and the commissionershall return or cause to be returned to the persons entitled thereto alladvance deposits or payments of premiums held in trust under W.S. 26-24-112.

 

26-24-114. Additional kinds of insurance mutuals.

 

Afterbeing authorized to transact one (1) kind of insurance, a mutual insurer may beauthorized to transact any additional kinds of insurance as are permitted underW.S. 26-3-107, while otherwise in compliance with this code and whilemaintaining unimpaired surplus funds in an amount not less than the amount ofpaid-in capital stock and surplus required to be maintained by a domestic stockinsurer transacting the same kinds of insurance.

 

26-24-115. Membership in mutuals.

 

 

(a) Each policyholder of a domestic mutual insurer, other thana reinsurance contract, is a member of the insurer with all rights andobligations of the membership, and the policy shall so specify.

 

(b) Any person, government or governmental agency, state orpolitical subdivision thereof, public or private corporation, board,association, firm, estate, trustee or fiduciary may be a member of a domestic,foreign or alien mutual insurer. Any officer, stockholder, trustee or legalrepresentative of any such corporation, board, association or estate may be recognizedas acting for or on its behalf for the purpose of the membership, and is notpersonally liable upon any contract of insurance for acting in thatrepresentative capacity.

 

(c) Any domestic corporation may participate as a member of amutual insurer as an incidental purpose for which the corporation is organized,and as such is granted the rights and powers expressly conferred.

 

26-24-116. Bylaws of mutuals.

 

 

(a) A domestic mutual insurer shall have bylaws for thegovernment of its affairs. The insurer's initial board of directors shall adoptoriginal bylaws, subject to the approval of the insurer's members at the nextmeeting of members.

 

(b) The bylaws shall contain provisions, consistent with thiscode, relating to:

 

(i) The voting rights of members;

 

(ii) Election of directors, and the number, qualifications,terms of office and powers of directors;

 

(iii) Annual and special meetings of members;

 

(iv) The number, designation, election, terms and powers andduties of the corporate officers;

 

(v) Deposit, custody, disbursement and accounting for corporatefunds;

 

(vi) Fidelity bonds covering any officers and employees of theinsurer handling its funds, to be issued by a corporate surety and to be in anamount as may be reasonable; and

 

(vii) Any other matters as may be customary, necessary orconvenient for the management or regulation of corporate affairs.

 

(c) The insurer shall promptly file with the commissioner acopy, certified by the insurer's secretary, of its bylaws and of everymodification thereof or addition thereto. The commissioner, after a hearingheld thereon, shall disapprove any bylaw provision he deems unlawful,unreasonable, inadequate, unfair or detrimental to the proper interests orprotection of the insurer's members or any class thereof. The insurer, afterreceiving written notice of disapproval and during the existence of thatdisapproval, shall not carry out any bylaw provision disapproved.

 

26-24-117. Meetings of members of domestic mutual insurers; where held;annual meeting.

 

 

(a) Meetings of members of a domestic mutual insurer shall beheld in the city or town of its registered office in this state, except as mayotherwise be provided in the insurer's bylaws with the commissioner's approval.

 

(b) Each domestic mutual insurer, during each calendar yearshall:

 

(i) Hold the annual meeting of its members to fill vacanciesexisting or occurring in the board of directors;

 

(ii) Receive and consider reports of the insurer's officers asto its affairs; and

 

(iii) Transact any other business as may properly be broughtbefore it.

 

(c) Written notice of the time and place of the annual meetingof members shall be given members not less than thirty (30) days prior to themeeting. Notice may be given by imprinting the notice plainly on the policiesissued by the insurer or in any other appropriate manner. Any change of thedate or place of the annual meeting shall be made only by an annual meeting ofmembers. Notice of any change, among other appropriate methods, may be given:

 

(i) By imprinting the new date or place on all policies whichwill be in effect as of the date of the changed meeting; or

 

(ii) Unless the commissioner otherwise orders, through policiesissued after the date of the annual meeting at which the change was made and inpremium notices and renewal certificates issued during the twenty-four (24)months immediately following the meeting.

 

(d) If the required annual meeting of members has not been heldduring the previous calendar year, the commissioner, upon written request ofany officer, director or member of the insurer, shall cause written notice ofthe meeting to be given to the insurer's members, and the meeting shall be heldas soon as reasonably possible thereafter.

 

26-24-118. Meetings of members of domestic mutual insurers; specialmeetings.

 

 

(a) A special meeting of the members of a mutual insurer may beheld for any lawful purpose. The meeting shall be called by the corporatesecretary pursuant to request of the insurer's president or of its board ofdirectors, or upon request in writing signed by not less than one-tenth (1/10)of the insurer's members. The meeting shall be held at such time as thesecretary may fix, but not less than ten (10) nor more than thirty (30) days afterreceipt of the request. If the secretary fails to issue the call, thepresident, directors or members making the request may do so.

 

(b) Not less than ten (10) days written notice of the meetingshall be given. Notice addressed to the insurer's members at their post officeaddresses last of record with the insurer and deposited, postage prepaid, in aletter depository of the United States post office, is deemed to have beengiven when so mailed. Instead of a mailed notice the insurer may publish the noticein any publication as shall afford a majority of its members a reasonableopportunity to have actual advance notice of the meeting. The notice shallstate the purposes of the meeting, and no business shall be transacted at themeeting of which notice was not so given.

 

26-24-119. Voting rights of members of mutual insurers.

 

 

(a) Each member of a mutual insurer is entitled to one (1) voteupon each matter coming to a vote at meetings of members.

 

(b) A member has the right to vote in person or by his writtenproxy filed with the corporate secretary not less than five (5) days prior tothe meeting. No proxy shall be made irrevocable, nor be valid beyond theearlier of the following dates:

 

(i) The date of expiration set forth in the proxy; or

 

(ii) The date of termination of membership; or

 

(iii) Five (5) years from the date of execution of the proxy.

 

(c) No member's vote upon any proposal to divest the insurer ofits business or assets, or the major part thereof, shall be registered or takenexcept in person or by proxy newly executed and specific as to the matter to bevoted upon.

 

26-24-120. Information to stockholders of domestic stock insurers;proxy regulations.

 

 

(a) This section applies to all domestic stock insurers except:

 

(i) A domestic stock insurer having less than one hundred (100)stockholders, except that if ninety-five percent (95%) or more of the insurer'sstock is owned or controlled by a parent or affiliated insurer, this sectiondoes not apply to that insurer unless its remaining shares are held by fivehundred (500) or more stockholders;

 

(ii) Domestic stock insurers which file with the securities andexchange commission forms of proxies, consents and authorizations pursuant tothe Securities Exchange Act of 1934 (15 U.S.C. 78aet seq.), as amended.

 

(b) Any domestic stock insurer subject to this section shallseasonably furnish its stockholders in advance of stockholders meetings,information in writing reasonably adequate to inform them of all matters to bepresented by the insurer's management for consideration of stockholders at themeeting.

 

(c) No person shall solicit a proxy, consent or authorizationin respect of any stock of a domestic stock insurer subject to this sectionunless he furnishes the person solicited with written information reasonablyadequate as to:

 

(i) The material matters in regard to which the powerssolicited are proposed to be used; and

 

(ii) The persons on whose behalf the solicitation is made, andthe interest of the persons in relation to those matters.

 

(d) No person shall furnish to another, information which theinformer knows or has reason to believe is false or misleading as to anymaterial fact, or which fails to state any material fact reasonably necessaryto prevent any other statement made from being misleading.

 

(e) Except as provided in subsection (f) of this section, theform of all proxies shall:

 

(i) Conspicuously state on whose behalf the proxy is solicited;

 

(ii) Provide for dating the proxy;

 

(iii) Impartially identify each matter or group of relatedmatters intended to be acted upon;

 

(iv) Provide means for the principal to instruct the vote of hisshares as to approval or disapproval of each matter or group, other thanelection to office; and

 

(v) Be legibly printed, with context suitably organized.

 

(f) A proxy may confer discretionary authority:

 

(i) As to matters in which choice is not specified pursuant toparagraph (e)(iv) of this section, if the form conspicuously states how it isintended to vote the proxy or authorization in each such case; and

 

(ii) As to other matters which may come before the meeting butunknown for a reasonable time prior to the solicitation by the persons on whosebehalf the solicitation is made.

 

(g) No proxy shall confer authority to vote:

 

(i) For election of any person to any office for which a bonafide nominee is not named in the proxy statement; or

 

(ii) In any annual meeting, or adjournment thereof, other thanthe annual meeting immediately following the date on which the proxy statementand form are furnished stockholders.

 

(h) The commissioner may promulgate reasonable rules andregulations to carry out the purpose of this section, and in so doing shallconsider rules and regulations promulgated for similar purposes by theinsurance supervisory officials of other states.

 

26-24-121. Boards of directors.

 

 

(a) The affairs of each domestic insurer shall be managed by aboard of directors consisting of not less than five (5) nor more thantwenty-one (21) directors.

 

(b) Directors, other than initial directors named in theinsurer's articles of incorporation, shall be elected by the members orstockholders of a domestic insurer at the annual meeting of stockholders ormembers. Directors may be elected for terms of not more than five (5) yearseach and until their successors are elected and have qualified. If thedirectors are to be elected for terms of more than one (1) year, the insurer'sbylaws shall provide for a staggered term system under which the terms of aproportionate part of the members of the board of directors shall expire on thedate of each annual meeting of stockholders or members.

 

(c) A director of a stock insurer shall be a stockholderthereof, and a director of a mutual insurer shall be a policyholder thereof.

 

(d) As to an insurer operating as an authorized insurer only inthe state of Wyoming, a majority of the members of the insurer's board ofdirectors shall be citizens of and shall actually reside in this state.

 

(e) Any executive committee of a board of directors shallconsist of not less than three (3) directors, a majority of whom shall residein this state.

 

26-24-122. Notice of changes of officers and directors.

 

Aninsurer shall promptly give the commissioner written notice of any change ofpersonnel among its directors or corporate officers.

 

26-24-123. Management in national emergency; purpose of emergencyprovisions.

 

Thespecific purpose of W.S. 26-24-124 through 26-24-126 is to facilitate thecontinued operation of domestic insurers if a national emergency is caused byan attack on the United States or by a nuclear, atomic or other disaster whichmakes it impossible or impracticable for an insurer to conduct its business instrict accord with applicable provisions of law, its bylaws or its charter.

 

26-24-124. Emergency bylaws.

 

Theboard of directors of any domestic insurer may at any time adopt emergencybylaws, subject to repeal or change by action of those having power to adoptregular bylaws for the insurer, which shall be operative during a nationalemergency and which may, notwithstanding any different provisions of theregular bylaws, or of the applicable statutes, or of the insurer's charter,make any provision that may be reasonably necessary for the insurer's operationduring the period of the emergency.

 

26-24-125. Emergency provisions in lieu of bylaws.

 

 

(a) If the board of directors of a domestic insurer does notadopt emergency bylaws, the following provisions are effective in case of anational emergency:

 

(i) Three (3) directors constitute a quorum for the transactionof business at all board meetings;

 

(ii) Any board vacancy may be filled by a majority of theremaining directors, though less than a quorum, or by a sole remaining director;

 

(iii) If there are no surviving directors, but at least three (3)vice-presidents of the insurer survive, the three (3) vice-presidents with thelongest term of service are the directors and possess all of the powers of theprevious board of directors and any other powers granted under this chapter orby subsequently enacted legislation. By majority vote the emergency board ofdirectors may elect other directors. If there are not at least three (3)surviving vice-presidents, the commissioner or designated person exercising thepowers of the insurance commissioner of this state shall appoint three (3)persons as directors who possess all of the powers of the previous board ofdirectors and any other powers granted under this chapter or by subsequently enactedlegislation, and these persons by majority vote may elect other directors.

 

26-24-126. Emergency succession of officers; change of home officelocation.

 

 

(a) The board of directors of a domestic insurer, byresolution, may provide that:

 

(i) In case of a national emergency and in case of the death orincapacity of the president, the secretary or the treasurer of the insurer,that officer, or any of them, shall be succeeded in the office by the personnamed or described in a succession list adopted by the board of directorswhich:

 

(A) May be on the basis of named persons or position titles;

 

(B) Shall establish the order of priority; and

 

(C) May prescribe the conditions under which the powers of theoffice shall be exercised.

 

(ii) In case of a national emergency the insurer's home officeor principal place of business shall be at a location specified in theresolution, except that the resolution may provide for alternate locations andestablish an order of preference.

 

26-24-127. Pecuniary interests of officers or directors prohibited.

 

 

(a) Any officer or director, or any member of any committee oran employee of a domestic insurer, who is charged with the duty of investing orhandling the insurer's funds shall not:

 

(i) Deposit or invest those funds except in the insurer'scorporate name;

 

(ii) Borrow the insurer's funds;

 

(iii) Be pecuniarily interested in any loan, pledge or deposit,security, investment, sale, purchase, exchange, reinsurance or other similartransaction or property of the insurer except as a stockholder or member;

 

(iv) Take or receive to his own use any fee, brokerage,commission, gift or other consideration for or on account of any transactionmade by or on behalf of the insurer.

 

(b) No insurer shall guarantee any financial obligation of anyof its officers or directors.

 

(c) This section does not prohibit any director or officer, ormember of a committee or employee from:

 

(i) Becoming a policyholder of the insurer and enjoying theusual rights provided for its policyholders;

 

(ii) Participating as beneficiary in any pension trust, deferredcompensation plan, profit sharing plan or stock option plan authorized by theinsurer and to which he may be eligible; or

 

(iii) Receiving a reasonable fee for lawful services actuallyrendered to the insurer.

 

(d) The commissioner, by regulation, may define and permitadditional exceptions to the prohibition contained in subsection (a) of thissection solely to enable payment:

 

(i) Of reasonable compensation to a director who is nototherwise an insurer's officer or employee; or

 

(ii) To a corporation or firm in which a director is interested,for necessary services performed or sales or purchases made to or for theinsurer in the ordinary course of the insurer's business and in the usualprivate professional or business capacity of the director, corporation or firm.

 

26-24-128. Management and exclusive agency contracts.

 

 

(a) No domestic insurer shall make any contract in which anyperson is granted or is to enjoy in fact the management of the insurer to thesubstantial exclusion of its board of directors, or to have the controlling orpreemptive right to produce substantially all insurance business for theinsurer, or, if an officer, director or otherwise part of the insurer'smanagement, is to receive any commission, bonus or compensation based upon thevolume of the insurer's business or transactions, unless the contract is filedwith and approved by the commissioner. The contract is approved unless disapprovedby the commissioner within twenty (20) days from the date of filing, subject toany reasonable time extension the commissioner requires by notice given withinthe twenty (20) days. Any disapproval shall be delivered to the insurer inwriting, stating the grounds for the disapproval.

 

(b) Any contract specified in subsection (a) of this sectionshall provide that any manager or producer of its business, within ninety (90)days after expiration of each calendar year, shall furnish the insurer's boardof directors a written statement of amounts received under or on account of thecontract and amounts expended thereunder during the calendar year, includingthe emoluments received therefrom by the directors, officers and otherprincipal management personnel of the manager or producer, and with anyclassification of items and further detail as the insurer's board of directorsreasonably requires.

 

(c) The commissioner shall disapprove any contract specified inthis section if he finds that it:

 

(i) Subjects the insured to excessive charges;

 

(ii) Is to extend for an unreasonable length of time;

 

(iii) Does not contain fair and adequate standards ofperformance; or

 

(iv) Contains other inequitable provisions or provisions whichimpair the proper interests of stockholders or policyholders of the insurer.

 

(d) The commissioner, after a hearing held thereon, maywithdraw his approval of any contract he approved, if he finds that the basisof his original approval no longer exists, or that the contract, in actualoperation, is subject to disapproval on any of the grounds referred to insubsection (c) of this section.

 

(e) This section does not apply to contracts entered into priorto January 1, 1968, nor to extensions or amendments to those contracts.

 

26-24-129. Home office records and assets; penalty for removal;out-of-state branch operations.

 

 

(a) Any domestic insurer shall:

 

(i) Have and maintain its principal place of business and homeoffice in this state;

 

(ii) Keep in the principal place of business accurate andcomplete accounts and records of its assets, transactions and affairs inaccordance with the usual and accepted principles and practices of insuranceaccounting and record keeping as applicable to the kinds of insurance the insurertransacts;

 

(iii) Have and maintain its assets in this state, except as to:

 

(A) Real property and personal property appurtenant theretolawfully owned by the insurer and located outside this state; and

 

(B) Any property of the insurer as may be customary, necessaryand convenient to enable and facilitate the operation of its branch officeslocated outside this state as referred to in subsection (d) of this section.

 

(b) No person shall:

 

(i) Remove all or a material part of the records or assets of adomestic insurer from this state except:

 

(A) Pursuant to a plan of merger, consolidation or bulkreinsurance which the commissioner approves under this code; or

 

(B) For any reasonable purposes and periods of time as thecommissioner approves in writing in advance of the removal; or

 

(ii) Conceal the records or assets or a material part thereoffrom the commissioner;

 

(iii) Retain any records or assets or a material part thereofoutside this state beyond the period authorized in the commissioner's approvalunder which the records were removed.

 

(c) Any person who violates any provision of subsection (b) ofthis section is guilty of a felony and, upon conviction, shall be punished by afine of not more than ten thousand dollars ($10,000.00), or by imprisonment inthe penitentiary for not more than five (5) years, or both. The commissionermay also institute delinquency proceedings against the insurer pursuant tochapter 28 of this code.

 

(d) This section does not prohibit an insurer from:

 

(i) Establishing and maintaining branch offices in other statesif necessary or convenient to the transaction of its business and keeping inthose branch offices the detailed records and assets customary and necessaryfor the servicing of its insurance in force and affairs in the territory servedby the branch office, as long as the records and assets are made readilyavailable at the branch office for examination by the commissioner at hisrequest;

 

(ii) Having, depositing or transmitting the insurer's funds andassets in or to jurisdictions outside of this state required by the law of thatjurisdiction or as reasonably and customarily required in the regular course ofits business.

 

26-24-130. Voucher required for disbursements.

 

 

(a) No insurer shall make any disbursement of twenty-fivedollars ($25.00) or more, unless evidenced by a voucher or other documentcorrectly describing the consideration for the payment and supported by a checkor receipt endorsed or signed by or on behalf of the person receiving themoney.

 

(b) If the disbursement is for services and reimbursement, thevoucher or other document, or some other provision referred to in the voucheror other document, shall describe the services and itemize the expenditures.

 

(c) If the disbursement is in connection with any matterpending before any public body or public official, the voucher or otherdocument shall also correctly describe the nature of the matter and of theinsurer's interest therein.

 

(d) If a voucher cannot be obtained, the expenditure shall besupported by an affidavit executed by an officer of the insurer stating thereasons for the inability to obtain a voucher and the particulars of theexpenditure as otherwise required by this section.

 

26-24-131. Borrowing by insurers.

 

 

(a) A domestic stock or mutual insurer may borrow money todefray the expenses of its organization, provide it with surplus funds or forany other purpose of its business, upon a written agreement that the money isrequired to be repaid only out of the insurer's surplus in excess of thatstipulated in the agreement. The agreement may provide for interest notexceeding six percent (6%) per annum, which interest shall or shall notconstitute a liability of the insurer as to its funds other than the excess ofsurplus, as stipulated in the agreement. No commission or promotion expenseshall be paid in connection with any such loan, except that if public offeringand sale is made of the loan securities, the insurer may pay the reasonablecosts thereof the commissioner approves.

 

(b) Any money borrowed as provided in subsection (a) of thissection, together with the interest thereon if stipulated in the agreement,shall not form a part of the insurer's legal liabilities except as to itssurplus in excess of the amount stipulated in the agreement, or be the basis ofany setoff. Until the money is repaid financial statements filed or publishedby the insurer shall show as a footnote thereto the amount then unpaid togetherwith any interest thereon accrued but unpaid.

 

(c) Any loan under this section is subject to thecommissioner's approval. The insurer, in advance of the loan, shall file withthe commissioner a statement of the purpose of the loan and a copy of theproposed loan agreement. The loan and agreement are deemed approved unlesswithin fifteen (15) days from the date of filing, the insurer is notified ofthe commissioner's disapproval and the reasons therefor. The commissioner shalldisapprove any proposed loan or agreement if he finds the loan is unnecessaryor excessive for the purpose intended, or that the terms of the loan agreementare not fair and equitable to the parties and to other similar lenders, if any,to the insurer, or that the information filed by the insurer is inadequate.

 

(d) Any loan, under this section, or substantial portionthereof, to a mutual insurer shall be repaid by the insurer when no longerreasonably necessary for the purpose originally intended. No repayment of aloan shall be made by a mutual insurer unless the commissioner approves it inadvance.

 

(e) This section does not apply to other kinds of loansobtained by the insurer in ordinary course of business, nor to loans secured bypledge or mortgage of assets.

 

26-24-132. Participating policies.

 

 

(a) If provided for in its articles of incorporation orcharter, a stock insurer or mutual insurer may:

 

(i) Issue any of its policies or contracts with or withoutparticipation in profits, savings, unabsorbed portions of premiums or surplus;

 

(ii) Classify policies issued and risks insured on aparticipating and nonparticipating basis; and

 

(iii) Subject to W.S. 26-16-503, determine the right toparticipate and the extent of participation of any classes of policies. Anysuch classification or determination shall be reasonable.

 

(b) A life insurer may issue both participating andnonparticipating policies or contracts only if the right or absence of right toparticipate is reasonably related to the premium charged.

 

(c) After the third policy year, no dividend, otherwise earned,is contingent upon the payment of renewal premium on any policy or contract.

 

26-24-133. Dividends to stockholders.

 

 

(a) No domestic stock insurer shall pay any cash dividend tostockholders except out of that part of its available and accumulated surplusfunds which is derived from realized net operating profits on its business andrealized capital gains.

 

(b) A cash dividend otherwise lawful may be payable out of theinsurer's earned surplus even though its total surplus is then less than theaggregate of its past contributed surplus resulting from issuance of itscapital stock at a price in excess of the par value thereof.

 

(c) A stock dividend may be paid out of any available surplusfunds in excess of the aggregate amount of surplus advanced to the insurerunder arrangements authorized in W.S. 26-24-131 and then remaining unpaid bythe insurer.

 

(d) Payment of a stock dividend is otherwise subject to W.S.17-16-623.

 

26-24-134. Dividends to policyholders of mutual insurer.

 

 

(a) The directors of a domestic mutual insurer may apportionand pay or credit to its members dividends only out of that part of its surplusfunds which represents net realized savings, net realized earnings and netrealized capital gains, all in excess of the surplus the insurer is required bylaw to maintain.

 

(b) A dividend otherwise proper may be payable out of thesavings, earnings and gains even though the insurer's total surplus is thenless than the aggregate of contributed surplus remaining unpaid by the insurer.

 

(c) A domestic stock insurer may pay dividends to holders ofits participating policies out of any available surplus funds.

 

(d) No dividend shall be paid which is inequitable, or whichunfairly discriminates as between classifications of policies or policieswithin the same classifications.

 

(e) This section is subject to W.S. 26-16-503(c).

 

26-24-135. Contingent liability of mutual member generally.

 

 

(a) Except as otherwise provided in W.S. 26-24-138 with respectto nonassessable policies, each member of a domestic mutual insurer has acontingent liability, pro rata and not one (1) for another, for the dischargeof its obligations. The contingent liability shall be in the maximum amountspecified in the insurer's articles of incorporation consistent with W.S.26-24-103(c)(iv).

 

(b) Any policy the insurer issues shall contain a statement ofthe contingent liability.

 

(c) Termination of any member's policy does not relieve themember of contingent liability for his proportion of the obligations of theinsurer which accrue while the policy is in force as provided in W.S.26-24-136.

 

(d) Unrealized contingent liability of members does notconstitute an asset of the insurer in any determination of its financialcondition.

 


State Codes and Statutes

State Codes and Statutes

Statutes > Wyoming > Title26 > Chapter24

CHAPTER 24 - ORGANIZATION AND CORPORATE PROCEDURES OF LEGALRESERVE STOCK AND MUTUAL INSURERS

 

26-24-101. Scope and applicability of chapter.

 

Thischapter applies only to domestic stock insurers and domestic mutual insurerstransacting or proposing to transact insurance on the cash premium or legalreserve plan, except that W.S. 26-24-115, 26-24-130 and 26-24-136 also apply toforeign and alien insurers.

 

26-24-102. Applicability of general corporation statutes; exceptions.

 

(a) The applicable provisions of the Wyoming BusinessCorporation Act apply to domestic stock and domestic mutual insurers, except asin conflict with the express provisions of this code and the reasonableimplications thereof.

 

(b) Domestic stock insurers and domestic mutual insurers areexempt from the provisions of W.S. 17-16-1630 and 17-16-1820(e).

 

26-24-103. Incorporation generally.

 

 

(a) This section applies to stock and mutual insurersincorporated in this state.

 

(b) Five (5) or more individuals may incorporate a stockinsurer. Ten (10) or more individuals may incorporate a mutual insurer. Atleast a majority of the incorporators shall be citizens of the United States.At least a majority of the incorporators shall be residents of this state.

 

(c) The incorporators shall sign and verify in triplicatearticles of incorporation in accordance with the applicable provisions of theWyoming Business Corporation Act, but subject to the following requirements:

 

(i) The name of the corporation shall comply with W.S.26-3-106. If a mutual insurer, "mutual" shall be included in thename. An alternative name may be specified for use in jurisdictions in whichconflict of name with that of another insurer or organization might otherwiseprevent the insurer from being authorized to transact insurance therein;

 

(ii) The purposes of the corporation shall be limited to thetransaction of one (1) or more kinds of insurance, as defined in this code, andthe corporation does not have power to engage in any other or additional business,except that a title insurer may engage in the title abstract business andescrow business;

 

(iii) If a stock corporation, the capital stock must consistentirely of common stock of one (1) uniform class, par value not less than onedollar ($1.00) per share, each outstanding share of which has equal rights inevery respect with every other share, and shares without par value shall not beauthorized;

 

(iv) If a mutual corporation, the articles of incorporationshall state the maximum contingent liability of members for payment of lossesand expenses incurred, other than as to nonassessable policies issued aspermitted under W.S. 26-24-137, but the liability shall not be less than one(1) nor more than six (6) annual premiums for the member's policy;

 

(v) The corporation's initial board of directors, as providedfor in the articles of incorporation, shall consist of not less than five (5)members;

 

(vi) The articles of incorporation shall specify which, if any,of the incorporators are not citizens of the United States of America or arenot residents of this state.

 

26-24-104. Articles of incorporation; generally; filing; approvalprocedure.

 

 

(a) The incorporators of a proposed domestic insurer shalldeliver the triplicate originals of the articles of incorporation to thecommissioner. The commissioner shall deliver one (1) of the originals to theattorney general of this state, and the attorney general shall examine thearticles. If the attorney general finds that the articles comply with law, heshall so certify and return the certificate and the original articles ofincorporation to the commissioner.

 

(b) If the attorney general approves the articles ofincorporation, the commissioner shall also endorse his approval upon each setof the articles and return them, together with the attorney general'scertificate, to the incorporators. The incorporators shall then file one (1)set of the articles of incorporation with the secretary of state, one (1) setwith the commissioner bearing the certification of the secretary of state andshall retain the third set in the corporate records. For the filing of articlesof incorporation of a mutual insurer, the secretary of state shall charge andcollect a filing fee of twenty-five dollars ($25.00), which shall be creditedto the general fund.

 

(c) If the attorney general finds that the proposed articles donot comply with the law, he shall refuse to approve them and shall return theset thereof to the commissioner, together with a written statement of therespects in which he finds the articles do not comply. The commissioner shallthen return all sets of the proposed articles to the proposed incorporatorstogether with the attorney general's written statement.

 

(d) The secretary of state shall not permit the filing in thatoffice of any articles of incorporation unless they bear the commissioner'sapproval endorsed thereon as provided in subsection (b) of this section.

 

(e) The approval of the attorney general or commissionerrelates only to the form and contents of the articles of incorporation and doesnot constitute approval or commitment as to any other aspect or operation ofthe proposed insurer.

 

(f) The attorney general and the commissioner shall perform allduties required of them under this section within a reasonable time after thearticles of incorporation have been submitted to the commissioner as providedin subsection (a) of this section.

 

26-24-105. Articles of incorporation; amendment by stock insurers.

 

 

(a) A domestic stock insurer may amend its articles ofincorporation for any lawful purpose through the same procedures prescribed inthe Wyoming Business Corporation Act as for business corporations in general.

 

(b) Triplicate originals of articles of amendment shall bedelivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided under W.S. 26-24-104.

 

26-24-106. Articles of incorporation; amendment by mutual insurers.

 

 

(a) A domestic mutual insurer may amend its articles ofincorporation for any lawful purpose by affirmative vote of a majority of themembers present or represented by proxy at any regular annual meeting of itsmembers, or at any special meeting of members called for the purpose. Writtennotices of the proposed amendment shall be given members at least thirty (30)days prior to the meeting and may be given in the same manner and at the sametime as notice of the meeting is given or in any other appropriate manner.

 

(b) Upon adoption of the amendment the insurer shall preparearticles of amendment in triplicate under its corporate seal, setting forth theamendment and the date and manner of the adoption thereof. The articles ofamendment shall be executed by the insurer's president or vice-president andsecretary or assistant secretary, and be acknowledged by them before an officerauthorized by law to take acknowledgements of deeds.

 

(c) The triplicate originals of the articles of amendment shallbe delivered to the commissioner and are subject to the same examination,certification, approval and filing procedures as provided for original articlesof incorporation under W.S. 26-24-104. For filing articles of amendment of thearticles of incorporation of a domestic mutual insurer the secretary of stateshall charge and collect a fee of ten dollars ($10.00), which shall be creditedto the general fund.

 

26-24-107. Stock of domestic insurer to be paid for in cash;exceptions.

 

 

(a) Except where issued in exchange for other securities forpurposes of merger, bulk reinsurance, acquisition of control of another insureras provided for in this chapter or as stock dividend on a split of stock, nodomestic stock insurer shall issue its shares except upon payment in full ofthe subscription price thereof, not less than par value, in cash.

 

(b) The value at which any such consideration, other thanmoney, shall be carried in the insurer's financial statement shall bedetermined as provided in W.S. 26-6-301 through 26-6-304.

 

26-24-108. Domestic insurers to engage in insurance businessexclusively; exception as to title insurers.

 

Nodomestic insurer shall engage in any business other than the insurance businessand activities reasonably and necessarily incidental thereto, except that atitle insurer may also engage in the title abstracting business and act as anescrow agent.

 

26-24-109. Initial requirements of domestic mutual insurers; authorizedtransactions.

 

 

(a) If newly organized, a domestic mutual insurer may beauthorized to transact any one (1) of the kinds of insurance listed in theschedule in subsection (b) of this section.

 

(b) When applying for an original certificate of authority, theinsurer shall:

 

(i) Be otherwise qualified therefor under this code;

 

(ii) Have received and accepted bona fide applications as tosubstantial insurable subjects for insurance coverage of a substantialcharacter of the kind of insurance proposed to be transacted;

 

(iii) Have collected in cash the full premium therefor at a ratenot less than that usually charged by other insurers for comparable coverages;and

 

(iv) Have surplus funds on hand and deposited as of the date theinsurance coverages become effective; or

 

(v) Instead of the applications, premiums and surplus, depositand thereafter maintain surplus in accordance with that part of the followingschedule which applies to the one (1) kind of insurance the insurer proposes totransact:

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

 

 

 

 

 

Max.

Deposit

Deposit

 

Min.

Min.

 

Min.

Amt.

of Min.

of

Kind of

No.

No.

Minimum

Amt.

Ins. ea.

Surplus

Surplus

Insur-

of Apps.

Subjects

Premium

Ins. ea.

Subject

Funds

in Lieu

ance

Accepted

Covered

Collected

Subject

(v)

(vi)

(vi)

 

 

 

 

 

 

 

 

Life (i)

200

200

Annual

$ 1,000

$ 2,500

$ 50,000

$ 150,000

Disability

200

200

Quarterly

$ 10

$ 25

$ 50,000

$ 150,000

(ii)

 

 

 

(Weekly

(Weekly

 

 

 

 

 

 

Indem.)

Indem.)

 

 

Property

100

250

Annual

$ 1,000

$ 3,000

$ 50,000

$ 200,000

(iii)

 

 

 

 

 

 

 

Casualty

150

200

Annual

$ 1,000

$ 10,000

$ 100,000

$ 200,000

(iv)

 

 

 

 

 

 

 

excluding

 

 

 

 

 

 

 

surety &

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

Casualty

200

500

Quarterly

$ 1,000

$ 10,000

$ 150,000

$ 250,000

with

 

 

 

 

 

 

 

worker's

 

 

 

 

 

 

 

compen-

 

 

 

 

 

 

 

sation

 

 

 

 

 

 

 

 

(c) In addition to surplus deposited and thereafter to be maintainedas shown in columns (g) or (h) of the schedule provided in paragraph (b)(v) ofthis section, the insurer when first authorized shall have on hand surplusfunds, which it can thereafter expend in the conduct of its business, in anamount not less than fifty thousand dollars ($50,000.00) or fifty percent (50%)of the deposited surplus required of it under the schedule, whichever islarger.

 

(d) The following provisions are applicable to the scheduleprovided in paragraph (b)(v) of this section and provisions as indicated bylike roman numerals appearing in that schedule:

 

(i) No group insurance or term policies for terms of less thanten (10) years shall be included;

 

(ii) No group, blanket or family plans of insurance shall beincluded. Instead of weekly indemnity a like premium value in medical,surgical and hospital benefits may be provided. Any accidental death ordismemberment benefit provided shall not exceed two thousand five hundreddollars ($2,500.00);

 

(iii) Only insurance of the owner's interest in real property maybe included;

 

(iv) Casualty insurance shall include insurance of legalliability for bodily injury and property damage, to which the maximum andminimum insured amounts apply;

 

(v) The maximums provided for in column (f) of the schedule arenet of applicable reinsurance;

 

(vi) The deposit of surplus in the amount specified in columns(g) and (h) of the schedule shall thereafter be maintained unimpaired. Thedeposit is subject to chapter 8 of this code.

 

26-24-110. Bond or deposit required of domestic mutual insurers.

 

 

(a) Before soliciting any applications for insurance requiredunder W.S. 26-24-109 as qualifications for the original certificate ofauthority, the incorporators of the proposed insurer shall file with thecommissioner a corporate surety bond in the penalty of fifteen thousand dollars($15,000.00), in favor of the state and for the use and benefit of the state ofthe applicant members and creditors of the corporation. The bond shall beconditioned for:

 

(i) The prompt return to applicant members of all premiumscollected in advance;

 

(ii) Payment of all indebtedness of the corporation; and

 

(iii) Payment of costs incurred by the state in case of any legalproceedings for liquidation or dissolution of the corporation, if thecorporation fails to complete its organization and secure a certificate ofauthority within one (1) year from the date of its certificate ofincorporation.

 

(b) Instead of the bond specified in subsection (a) of thissection, the incorporators may deposit with the commissioner fifteen thousanddollars ($15,000.00) in cash or United States government bonds, negotiable andpayable to the bearer, with a market value at all times of not less thanfifteen thousand dollars ($15,000.00), to be held in trust upon the sameconditions as required for the bond.

 

(c) Any bond filed or deposit or remaining portion thereof heldunder this section shall be released and discharged upon settlement andtermination of all liabilities against it.

 

26-24-111. Applications for domestic mutual insurance; solicitation bylicensed agents.

 

 

(a) Upon receipt of the commissioner's approval of the bond ordeposit as provided in W.S. 26-24-110, the directors and officers of theproposed domestic mutual insurer may commence solicitation of the requisiteapplications for insurance policies and may receive deposits of premiumsthereon.

 

(b) The applications shall be in writing signed by theapplicant, covering subjects of insurance resident, located or to be performedin this state.

 

(c) All applications shall provide that:

 

(i) Issuance of the policy is contingent upon the insurerqualifying for and receiving a certificate of authority;

 

(ii) No insurance is in effect until the certificate of authorityis issued; and

 

(iii) The prepaid premium or deposit, and membership or policyfee, if any, shall be refunded in full to the applicant if organization is notcompleted and the certificate of authority is not issued and received by theinsurer before a specified date which shall be not later than one (1) yearafter the date of the certificate of incorporation.

 

(d) All qualifying premiums collected shall be in cash.

 

(e) Solicitation for qualifying applicants for insurance shallbe by licensed agents of the corporation, and the commissioner, upon thecorporation's application therefor, shall issue temporary agent's licensesexpiring on the date specified pursuant to paragraph (c)(iii) of this sectionto individuals qualified as for a resident agent's license except as to thetaking or passing of an examination. The commissioner may suspend or revoke anylicense for any of the causes and pursuant to the same procedures as areapplicable to suspension or revocation of licenses of agents in general underchapter 9 of this code.

 

26-24-112. Deposit in trust of premiums collected by mutual insurer;release upon issuance of certificate of authority.

 

 

(a) All sums collected by a domestic mutual corporation aspremiums or fees on qualifying applications for insurance therein shall bedeposited in trust in a bank or trust company in this state under a writtentrust agreement consistent with this section and with W.S. 26-24-111(c)(iii)and 26-24-113. The corporation shall file an executed copy of the trust agreementwith the commissioner.

 

(b) Upon issuance to the corporation of a certificate ofauthority as an insurer for the kind of insurance for which the applicationswere solicited, all funds held in trust become the insurer's funds, and theinsurer shall thereafter in due course issue and deliver its policies for whichpremiums were paid and accepted. The insurance provided by the policies iseffective as of the date of the certificate of authority or thereafter as thepolicies provide.

 

26-24-113. Failure of domestic mutual insurer to qualify.

 

Ifthe proposed domestic insurer fails to complete its organization and to secureits original certificate of authority within one (1) year from the date of itscertificate of incorporation, its corporate powers cease, and the commissionershall return or cause to be returned to the persons entitled thereto alladvance deposits or payments of premiums held in trust under W.S. 26-24-112.

 

26-24-114. Additional kinds of insurance mutuals.

 

Afterbeing authorized to transact one (1) kind of insurance, a mutual insurer may beauthorized to transact any additional kinds of insurance as are permitted underW.S. 26-3-107, while otherwise in compliance with this code and whilemaintaining unimpaired surplus funds in an amount not less than the amount ofpaid-in capital stock and surplus required to be maintained by a domestic stockinsurer transacting the same kinds of insurance.

 

26-24-115. Membership in mutuals.

 

 

(a) Each policyholder of a domestic mutual insurer, other thana reinsurance contract, is a member of the insurer with all rights andobligations of the membership, and the policy shall so specify.

 

(b) Any person, government or governmental agency, state orpolitical subdivision thereof, public or private corporation, board,association, firm, estate, trustee or fiduciary may be a member of a domestic,foreign or alien mutual insurer. Any officer, stockholder, trustee or legalrepresentative of any such corporation, board, association or estate may be recognizedas acting for or on its behalf for the purpose of the membership, and is notpersonally liable upon any contract of insurance for acting in thatrepresentative capacity.

 

(c) Any domestic corporation may participate as a member of amutual insurer as an incidental purpose for which the corporation is organized,and as such is granted the rights and powers expressly conferred.

 

26-24-116. Bylaws of mutuals.

 

 

(a) A domestic mutual insurer shall have bylaws for thegovernment of its affairs. The insurer's initial board of directors shall adoptoriginal bylaws, subject to the approval of the insurer's members at the nextmeeting of members.

 

(b) The bylaws shall contain provisions, consistent with thiscode, relating to:

 

(i) The voting rights of members;

 

(ii) Election of directors, and the number, qualifications,terms of office and powers of directors;

 

(iii) Annual and special meetings of members;

 

(iv) The number, designation, election, terms and powers andduties of the corporate officers;

 

(v) Deposit, custody, disbursement and accounting for corporatefunds;

 

(vi) Fidelity bonds covering any officers and employees of theinsurer handling its funds, to be issued by a corporate surety and to be in anamount as may be reasonable; and

 

(vii) Any other matters as may be customary, necessary orconvenient for the management or regulation of corporate affairs.

 

(c) The insurer shall promptly file with the commissioner acopy, certified by the insurer's secretary, of its bylaws and of everymodification thereof or addition thereto. The commissioner, after a hearingheld thereon, shall disapprove any bylaw provision he deems unlawful,unreasonable, inadequate, unfair or detrimental to the proper interests orprotection of the insurer's members or any class thereof. The insurer, afterreceiving written notice of disapproval and during the existence of thatdisapproval, shall not carry out any bylaw provision disapproved.

 

26-24-117. Meetings of members of domestic mutual insurers; where held;annual meeting.

 

 

(a) Meetings of members of a domestic mutual insurer shall beheld in the city or town of its registered office in this state, except as mayotherwise be provided in the insurer's bylaws with the commissioner's approval.

 

(b) Each domestic mutual insurer, during each calendar yearshall:

 

(i) Hold the annual meeting of its members to fill vacanciesexisting or occurring in the board of directors;

 

(ii) Receive and consider reports of the insurer's officers asto its affairs; and

 

(iii) Transact any other business as may properly be broughtbefore it.

 

(c) Written notice of the time and place of the annual meetingof members shall be given members not less than thirty (30) days prior to themeeting. Notice may be given by imprinting the notice plainly on the policiesissued by the insurer or in any other appropriate manner. Any change of thedate or place of the annual meeting shall be made only by an annual meeting ofmembers. Notice of any change, among other appropriate methods, may be given:

 

(i) By imprinting the new date or place on all policies whichwill be in effect as of the date of the changed meeting; or

 

(ii) Unless the commissioner otherwise orders, through policiesissued after the date of the annual meeting at which the change was made and inpremium notices and renewal certificates issued during the twenty-four (24)months immediately following the meeting.

 

(d) If the required annual meeting of members has not been heldduring the previous calendar year, the commissioner, upon written request ofany officer, director or member of the insurer, shall cause written notice ofthe meeting to be given to the insurer's members, and the meeting shall be heldas soon as reasonably possible thereafter.

 

26-24-118. Meetings of members of domestic mutual insurers; specialmeetings.

 

 

(a) A special meeting of the members of a mutual insurer may beheld for any lawful purpose. The meeting shall be called by the corporatesecretary pursuant to request of the insurer's president or of its board ofdirectors, or upon request in writing signed by not less than one-tenth (1/10)of the insurer's members. The meeting shall be held at such time as thesecretary may fix, but not less than ten (10) nor more than thirty (30) days afterreceipt of the request. If the secretary fails to issue the call, thepresident, directors or members making the request may do so.

 

(b) Not less than ten (10) days written notice of the meetingshall be given. Notice addressed to the insurer's members at their post officeaddresses last of record with the insurer and deposited, postage prepaid, in aletter depository of the United States post office, is deemed to have beengiven when so mailed. Instead of a mailed notice the insurer may publish the noticein any publication as shall afford a majority of its members a reasonableopportunity to have actual advance notice of the meeting. The notice shallstate the purposes of the meeting, and no business shall be transacted at themeeting of which notice was not so given.

 

26-24-119. Voting rights of members of mutual insurers.

 

 

(a) Each member of a mutual insurer is entitled to one (1) voteupon each matter coming to a vote at meetings of members.

 

(b) A member has the right to vote in person or by his writtenproxy filed with the corporate secretary not less than five (5) days prior tothe meeting. No proxy shall be made irrevocable, nor be valid beyond theearlier of the following dates:

 

(i) The date of expiration set forth in the proxy; or

 

(ii) The date of termination of membership; or

 

(iii) Five (5) years from the date of execution of the proxy.

 

(c) No member's vote upon any proposal to divest the insurer ofits business or assets, or the major part thereof, shall be registered or takenexcept in person or by proxy newly executed and specific as to the matter to bevoted upon.

 

26-24-120. Information to stockholders of domestic stock insurers;proxy regulations.

 

 

(a) This section applies to all domestic stock insurers except:

 

(i) A domestic stock insurer having less than one hundred (100)stockholders, except that if ninety-five percent (95%) or more of the insurer'sstock is owned or controlled by a parent or affiliated insurer, this sectiondoes not apply to that insurer unless its remaining shares are held by fivehundred (500) or more stockholders;

 

(ii) Domestic stock insurers which file with the securities andexchange commission forms of proxies, consents and authorizations pursuant tothe Securities Exchange Act of 1934 (15 U.S.C. 78aet seq.), as amended.

 

(b) Any domestic stock insurer subject to this section shallseasonably furnish its stockholders in advance of stockholders meetings,information in writing reasonably adequate to inform them of all matters to bepresented by the insurer's management for consideration of stockholders at themeeting.

 

(c) No person shall solicit a proxy, consent or authorizationin respect of any stock of a domestic stock insurer subject to this sectionunless he furnishes the person solicited with written information reasonablyadequate as to:

 

(i) The material matters in regard to which the powerssolicited are proposed to be used; and

 

(ii) The persons on whose behalf the solicitation is made, andthe interest of the persons in relation to those matters.

 

(d) No person shall furnish to another, information which theinformer knows or has reason to believe is false or misleading as to anymaterial fact, or which fails to state any material fact reasonably necessaryto prevent any other statement made from being misleading.

 

(e) Except as provided in subsection (f) of this section, theform of all proxies shall:

 

(i) Conspicuously state on whose behalf the proxy is solicited;

 

(ii) Provide for dating the proxy;

 

(iii) Impartially identify each matter or group of relatedmatters intended to be acted upon;

 

(iv) Provide means for the principal to instruct the vote of hisshares as to approval or disapproval of each matter or group, other thanelection to office; and

 

(v) Be legibly printed, with context suitably organized.

 

(f) A proxy may confer discretionary authority:

 

(i) As to matters in which choice is not specified pursuant toparagraph (e)(iv) of this section, if the form conspicuously states how it isintended to vote the proxy or authorization in each such case; and

 

(ii) As to other matters which may come before the meeting butunknown for a reasonable time prior to the solicitation by the persons on whosebehalf the solicitation is made.

 

(g) No proxy shall confer authority to vote:

 

(i) For election of any person to any office for which a bonafide nominee is not named in the proxy statement; or

 

(ii) In any annual meeting, or adjournment thereof, other thanthe annual meeting immediately following the date on which the proxy statementand form are furnished stockholders.

 

(h) The commissioner may promulgate reasonable rules andregulations to carry out the purpose of this section, and in so doing shallconsider rules and regulations promulgated for similar purposes by theinsurance supervisory officials of other states.

 

26-24-121. Boards of directors.

 

 

(a) The affairs of each domestic insurer shall be managed by aboard of directors consisting of not less than five (5) nor more thantwenty-one (21) directors.

 

(b) Directors, other than initial directors named in theinsurer's articles of incorporation, shall be elected by the members orstockholders of a domestic insurer at the annual meeting of stockholders ormembers. Directors may be elected for terms of not more than five (5) yearseach and until their successors are elected and have qualified. If thedirectors are to be elected for terms of more than one (1) year, the insurer'sbylaws shall provide for a staggered term system under which the terms of aproportionate part of the members of the board of directors shall expire on thedate of each annual meeting of stockholders or members.

 

(c) A director of a stock insurer shall be a stockholderthereof, and a director of a mutual insurer shall be a policyholder thereof.

 

(d) As to an insurer operating as an authorized insurer only inthe state of Wyoming, a majority of the members of the insurer's board ofdirectors shall be citizens of and shall actually reside in this state.

 

(e) Any executive committee of a board of directors shallconsist of not less than three (3) directors, a majority of whom shall residein this state.

 

26-24-122. Notice of changes of officers and directors.

 

Aninsurer shall promptly give the commissioner written notice of any change ofpersonnel among its directors or corporate officers.

 

26-24-123. Management in national emergency; purpose of emergencyprovisions.

 

Thespecific purpose of W.S. 26-24-124 through 26-24-126 is to facilitate thecontinued operation of domestic insurers if a national emergency is caused byan attack on the United States or by a nuclear, atomic or other disaster whichmakes it impossible or impracticable for an insurer to conduct its business instrict accord with applicable provisions of law, its bylaws or its charter.

 

26-24-124. Emergency bylaws.

 

Theboard of directors of any domestic insurer may at any time adopt emergencybylaws, subject to repeal or change by action of those having power to adoptregular bylaws for the insurer, which shall be operative during a nationalemergency and which may, notwithstanding any different provisions of theregular bylaws, or of the applicable statutes, or of the insurer's charter,make any provision that may be reasonably necessary for the insurer's operationduring the period of the emergency.

 

26-24-125. Emergency provisions in lieu of bylaws.

 

 

(a) If the board of directors of a domestic insurer does notadopt emergency bylaws, the following provisions are effective in case of anational emergency:

 

(i) Three (3) directors constitute a quorum for the transactionof business at all board meetings;

 

(ii) Any board vacancy may be filled by a majority of theremaining directors, though less than a quorum, or by a sole remaining director;

 

(iii) If there are no surviving directors, but at least three (3)vice-presidents of the insurer survive, the three (3) vice-presidents with thelongest term of service are the directors and possess all of the powers of theprevious board of directors and any other powers granted under this chapter orby subsequently enacted legislation. By majority vote the emergency board ofdirectors may elect other directors. If there are not at least three (3)surviving vice-presidents, the commissioner or designated person exercising thepowers of the insurance commissioner of this state shall appoint three (3)persons as directors who possess all of the powers of the previous board ofdirectors and any other powers granted under this chapter or by subsequently enactedlegislation, and these persons by majority vote may elect other directors.

 

26-24-126. Emergency succession of officers; change of home officelocation.

 

 

(a) The board of directors of a domestic insurer, byresolution, may provide that:

 

(i) In case of a national emergency and in case of the death orincapacity of the president, the secretary or the treasurer of the insurer,that officer, or any of them, shall be succeeded in the office by the personnamed or described in a succession list adopted by the board of directorswhich:

 

(A) May be on the basis of named persons or position titles;

 

(B) Shall establish the order of priority; and

 

(C) May prescribe the conditions under which the powers of theoffice shall be exercised.

 

(ii) In case of a national emergency the insurer's home officeor principal place of business shall be at a location specified in theresolution, except that the resolution may provide for alternate locations andestablish an order of preference.

 

26-24-127. Pecuniary interests of officers or directors prohibited.

 

 

(a) Any officer or director, or any member of any committee oran employee of a domestic insurer, who is charged with the duty of investing orhandling the insurer's funds shall not:

 

(i) Deposit or invest those funds except in the insurer'scorporate name;

 

(ii) Borrow the insurer's funds;

 

(iii) Be pecuniarily interested in any loan, pledge or deposit,security, investment, sale, purchase, exchange, reinsurance or other similartransaction or property of the insurer except as a stockholder or member;

 

(iv) Take or receive to his own use any fee, brokerage,commission, gift or other consideration for or on account of any transactionmade by or on behalf of the insurer.

 

(b) No insurer shall guarantee any financial obligation of anyof its officers or directors.

 

(c) This section does not prohibit any director or officer, ormember of a committee or employee from:

 

(i) Becoming a policyholder of the insurer and enjoying theusual rights provided for its policyholders;

 

(ii) Participating as beneficiary in any pension trust, deferredcompensation plan, profit sharing plan or stock option plan authorized by theinsurer and to which he may be eligible; or

 

(iii) Receiving a reasonable fee for lawful services actuallyrendered to the insurer.

 

(d) The commissioner, by regulation, may define and permitadditional exceptions to the prohibition contained in subsection (a) of thissection solely to enable payment:

 

(i) Of reasonable compensation to a director who is nototherwise an insurer's officer or employee; or

 

(ii) To a corporation or firm in which a director is interested,for necessary services performed or sales or purchases made to or for theinsurer in the ordinary course of the insurer's business and in the usualprivate professional or business capacity of the director, corporation or firm.

 

26-24-128. Management and exclusive agency contracts.

 

 

(a) No domestic insurer shall make any contract in which anyperson is granted or is to enjoy in fact the management of the insurer to thesubstantial exclusion of its board of directors, or to have the controlling orpreemptive right to produce substantially all insurance business for theinsurer, or, if an officer, director or otherwise part of the insurer'smanagement, is to receive any commission, bonus or compensation based upon thevolume of the insurer's business or transactions, unless the contract is filedwith and approved by the commissioner. The contract is approved unless disapprovedby the commissioner within twenty (20) days from the date of filing, subject toany reasonable time extension the commissioner requires by notice given withinthe twenty (20) days. Any disapproval shall be delivered to the insurer inwriting, stating the grounds for the disapproval.

 

(b) Any contract specified in subsection (a) of this sectionshall provide that any manager or producer of its business, within ninety (90)days after expiration of each calendar year, shall furnish the insurer's boardof directors a written statement of amounts received under or on account of thecontract and amounts expended thereunder during the calendar year, includingthe emoluments received therefrom by the directors, officers and otherprincipal management personnel of the manager or producer, and with anyclassification of items and further detail as the insurer's board of directorsreasonably requires.

 

(c) The commissioner shall disapprove any contract specified inthis section if he finds that it:

 

(i) Subjects the insured to excessive charges;

 

(ii) Is to extend for an unreasonable length of time;

 

(iii) Does not contain fair and adequate standards ofperformance; or

 

(iv) Contains other inequitable provisions or provisions whichimpair the proper interests of stockholders or policyholders of the insurer.

 

(d) The commissioner, after a hearing held thereon, maywithdraw his approval of any contract he approved, if he finds that the basisof his original approval no longer exists, or that the contract, in actualoperation, is subject to disapproval on any of the grounds referred to insubsection (c) of this section.

 

(e) This section does not apply to contracts entered into priorto January 1, 1968, nor to extensions or amendments to those contracts.

 

26-24-129. Home office records and assets; penalty for removal;out-of-state branch operations.

 

 

(a) Any domestic insurer shall:

 

(i) Have and maintain its principal place of business and homeoffice in this state;

 

(ii) Keep in the principal place of business accurate andcomplete accounts and records of its assets, transactions and affairs inaccordance with the usual and accepted principles and practices of insuranceaccounting and record keeping as applicable to the kinds of insurance the insurertransacts;

 

(iii) Have and maintain its assets in this state, except as to:

 

(A) Real property and personal property appurtenant theretolawfully owned by the insurer and located outside this state; and

 

(B) Any property of the insurer as may be customary, necessaryand convenient to enable and facilitate the operation of its branch officeslocated outside this state as referred to in subsection (d) of this section.

 

(b) No person shall:

 

(i) Remove all or a material part of the records or assets of adomestic insurer from this state except:

 

(A) Pursuant to a plan of merger, consolidation or bulkreinsurance which the commissioner approves under this code; or

 

(B) For any reasonable purposes and periods of time as thecommissioner approves in writing in advance of the removal; or

 

(ii) Conceal the records or assets or a material part thereoffrom the commissioner;

 

(iii) Retain any records or assets or a material part thereofoutside this state beyond the period authorized in the commissioner's approvalunder which the records were removed.

 

(c) Any person who violates any provision of subsection (b) ofthis section is guilty of a felony and, upon conviction, shall be punished by afine of not more than ten thousand dollars ($10,000.00), or by imprisonment inthe penitentiary for not more than five (5) years, or both. The commissionermay also institute delinquency proceedings against the insurer pursuant tochapter 28 of this code.

 

(d) This section does not prohibit an insurer from:

 

(i) Establishing and maintaining branch offices in other statesif necessary or convenient to the transaction of its business and keeping inthose branch offices the detailed records and assets customary and necessaryfor the servicing of its insurance in force and affairs in the territory servedby the branch office, as long as the records and assets are made readilyavailable at the branch office for examination by the commissioner at hisrequest;

 

(ii) Having, depositing or transmitting the insurer's funds andassets in or to jurisdictions outside of this state required by the law of thatjurisdiction or as reasonably and customarily required in the regular course ofits business.

 

26-24-130. Voucher required for disbursements.

 

 

(a) No insurer shall make any disbursement of twenty-fivedollars ($25.00) or more, unless evidenced by a voucher or other documentcorrectly describing the consideration for the payment and supported by a checkor receipt endorsed or signed by or on behalf of the person receiving themoney.

 

(b) If the disbursement is for services and reimbursement, thevoucher or other document, or some other provision referred to in the voucheror other document, shall describe the services and itemize the expenditures.

 

(c) If the disbursement is in connection with any matterpending before any public body or public official, the voucher or otherdocument shall also correctly describe the nature of the matter and of theinsurer's interest therein.

 

(d) If a voucher cannot be obtained, the expenditure shall besupported by an affidavit executed by an officer of the insurer stating thereasons for the inability to obtain a voucher and the particulars of theexpenditure as otherwise required by this section.

 

26-24-131. Borrowing by insurers.

 

 

(a) A domestic stock or mutual insurer may borrow money todefray the expenses of its organization, provide it with surplus funds or forany other purpose of its business, upon a written agreement that the money isrequired to be repaid only out of the insurer's surplus in excess of thatstipulated in the agreement. The agreement may provide for interest notexceeding six percent (6%) per annum, which interest shall or shall notconstitute a liability of the insurer as to its funds other than the excess ofsurplus, as stipulated in the agreement. No commission or promotion expenseshall be paid in connection with any such loan, except that if public offeringand sale is made of the loan securities, the insurer may pay the reasonablecosts thereof the commissioner approves.

 

(b) Any money borrowed as provided in subsection (a) of thissection, together with the interest thereon if stipulated in the agreement,shall not form a part of the insurer's legal liabilities except as to itssurplus in excess of the amount stipulated in the agreement, or be the basis ofany setoff. Until the money is repaid financial statements filed or publishedby the insurer shall show as a footnote thereto the amount then unpaid togetherwith any interest thereon accrued but unpaid.

 

(c) Any loan under this section is subject to thecommissioner's approval. The insurer, in advance of the loan, shall file withthe commissioner a statement of the purpose of the loan and a copy of theproposed loan agreement. The loan and agreement are deemed approved unlesswithin fifteen (15) days from the date of filing, the insurer is notified ofthe commissioner's disapproval and the reasons therefor. The commissioner shalldisapprove any proposed loan or agreement if he finds the loan is unnecessaryor excessive for the purpose intended, or that the terms of the loan agreementare not fair and equitable to the parties and to other similar lenders, if any,to the insurer, or that the information filed by the insurer is inadequate.

 

(d) Any loan, under this section, or substantial portionthereof, to a mutual insurer shall be repaid by the insurer when no longerreasonably necessary for the purpose originally intended. No repayment of aloan shall be made by a mutual insurer unless the commissioner approves it inadvance.

 

(e) This section does not apply to other kinds of loansobtained by the insurer in ordinary course of business, nor to loans secured bypledge or mortgage of assets.

 

26-24-132. Participating policies.

 

 

(a) If provided for in its articles of incorporation orcharter, a stock insurer or mutual insurer may:

 

(i) Issue any of its policies or contracts with or withoutparticipation in profits, savings, unabsorbed portions of premiums or surplus;

 

(ii) Classify policies issued and risks insured on aparticipating and nonparticipating basis; and

 

(iii) Subject to W.S. 26-16-503, determine the right toparticipate and the extent of participation of any classes of policies. Anysuch classification or determination shall be reasonable.

 

(b) A life insurer may issue both participating andnonparticipating policies or contracts only if the right or absence of right toparticipate is reasonably related to the premium charged.

 

(c) After the third policy year, no dividend, otherwise earned,is contingent upon the payment of renewal premium on any policy or contract.

 

26-24-133. Dividends to stockholders.

 

 

(a) No domestic stock insurer shall pay any cash dividend tostockholders except out of that part of its available and accumulated surplusfunds which is derived from realized net operating profits on its business andrealized capital gains.

 

(b) A cash dividend otherwise lawful may be payable out of theinsurer's earned surplus even though its total surplus is then less than theaggregate of its past contributed surplus resulting from issuance of itscapital stock at a price in excess of the par value thereof.

 

(c) A stock dividend may be paid out of any available surplusfunds in excess of the aggregate amount of surplus advanced to the insurerunder arrangements authorized in W.S. 26-24-131 and then remaining unpaid bythe insurer.

 

(d) Payment of a stock dividend is otherwise subject to W.S.17-16-623.

 

26-24-134. Dividends to policyholders of mutual insurer.

 

 

(a) The directors of a domestic mutual insurer may apportionand pay or credit to its members dividends only out of that part of its surplusfunds which represents net realized savings, net realized earnings and netrealized capital gains, all in excess of the surplus the insurer is required bylaw to maintain.

 

(b) A dividend otherwise proper may be payable out of thesavings, earnings and gains even though the insurer's total surplus is thenless than the aggregate of contributed surplus remaining unpaid by the insurer.

 

(c) A domestic stock insurer may pay dividends to holders ofits participating policies out of any available surplus funds.

 

(d) No dividend shall be paid which is inequitable, or whichunfairly discriminates as between classifications of policies or policieswithin the same classifications.

 

(e) This section is subject to W.S. 26-16-503(c).

 

26-24-135. Contingent liability of mutual member generally.

 

 

(a) Except as otherwise provided in W.S. 26-24-138 with respectto nonassessable policies, each member of a domestic mutual insurer has acontingent liability, pro rata and not one (1) for another, for the dischargeof its obligations. The contingent liability shall be in the maximum amountspecified in the insurer's articles of incorporation consistent with W.S.26-24-103(c)(iv).

 

(b) Any policy the insurer issues shall contain a statement ofthe contingent liability.

 

(c) Termination of any member's policy does not relieve themember of contingent liability for his proportion of the obligations of theinsurer which accrue while the policy is in force as provided in W.S.26-24-136.

 

(d) Unrealized contingent liability of members does notconstitute an asset of the insurer in any determination of its financialcondition.

 

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