Chapter 431 — Chapter 431

§431:4-106 Board of directors. The board of directors of a domestic insurer shall consist of not less than five individuals, at least three-fourths of the individuals shall be United States citizens, and a majority of the individuals shall be residents of this State. [L 1987, c 3…

§431:4-106.5 Membership in mutual or subscriber in reciprocal insurers; no personal liability of representative. Any person may make application to enter into agreement for and hold policies or contracts in or with and be a member or subscriber of any domestic, foreign, or alien …

§431:4-107 Solicitation permit required. (a) No person forming or proposing to form in this State any of the following shall advertise, solicit or receive any funds, agreement, stock subscription or membership on account thereof, unless the person has applied for and has received…

§431:4-108 Application for a solicitation permit. To apply for a solicitation permit a person shall:

§431:4-109 Permit issued or denied. (a) The commissioner shall expeditiously examine the application for a solicitation permit and make any investigation relative thereto deemed necessary. (b) The commissioner shall give notice to the applicant that the commissioner will issue a …

§431:4-110 Bond or cash deposit. (a) The commissioner shall not issue a solicitation permit until the person applying therefor files with the commissioner a corporate surety bond in the penalty sum of $150,000, in favor of this State and for the use and benefit of this State and …

§431:4-111 Expiration and contents. Every solicitation permit issued by the commissioner shall:

§431:4-112 Permit not an inducement. The granting of a solicitation permit is permissive only and shall not constitute an endorsement by the commissioner of any person or thing related to the proposed insurer or corporation. The existence of the permit shall not be advertised or …

§431:4-113 Organization solicitor's license. Solicitation for sale of securities to members of the public under a solicitation permit shall be made only by individuals registered therefor pursuant to chapter 485A. [L 1987, c 347, pt of §2; am L 2006, c 229, §14]

§431:4-114 Revocation of solicitation permit. (a) The commissioner shall revoke a solicitation permit if requested in writing by: (b) The commissioner may, for cause, modify a solicitation permit, or may, after a hearing, revoke any solicitation permit for:

§431:4-115 Escrow of funds. (a) All funds received pursuant to a solicitation permit shall be deposited and held in escrow in a bank or trust company under an agreement approved by the commissioner. No part of any such deposit shall be withdrawn except: (b) When the commissioner …

§431:4-116 Expense pending completion. (b) Any portion of funds received on account of stock subscriptions which is allowed under the solicitation permit, may be applied concurrently toward the payment of promotion and organization expenses incurred. [L 1987, c 347, pt of §2]

§431:4-117 Issuance and forfeiture of securities. (a) No proposed stock insurer or corporation shall issue any share of stock or participation agreement until: (b) Every subscription contract to shares of a stock insurer or other corporation calling for payment in installments sh…

§431:4-118 Insurance application. All applications for insurance obtained in forming a mutual or reciprocal insurer shall provide that:

§431:4-119 Refund upon failure to complete or qualify or upon revocation of solicitation permit. The commissioner shall withdraw all funds held in escrow and refund to subscribers or applicants all sums paid in on stock subscriptions, less that part of the sums paid in on subscri…

§431:4-120 Subsequent financing. (a) No domestic insurer, insurance holding corporation, stock corporation for financing operations of a mutual insurer, or attorney-in-fact corporation of a reciprocal insurer shall solicit or receive funds in exchange for any new issue of its cor…

§431:4-121 False exhibits. Every person who, with intent to deceive knowingly exhibits any false account, document or advertisement, relative to the affairs of any insurer, or of any corporation of the kind enumerated in section 431:4-107, formed or proposed to be formed, is puni…

§431:4-122 Depositaries. The funds of a domestic insurer shall not be deposited in any bank or banking institution which has not first been approved as a depositary by the insurer's board of directors or by a committee designated for the purpose. [L 1987, c 347, pt of §2]

§431:4-123 Corrupt practices. No person shall buy, sell or barter a vote or proxy, relative to any meeting of shareholders or members of an incorporated domestic insurer, or engage in any corrupt or dishonest practice in or relative to the conduct of any such meeting. [L 1987, c …

§431:4-124 Prohibited guaranty. No domestic insurer or its affiliates or subsidiaries shall guarantee the financial obligation of any director or officer of such insurer or affiliate or subsidiary in the director's or officer's personal capacity, and any such guaranty attempted s…

§431:4-125 Fees on use of funds. (a) No director, officer or employee having any authority in the investment or disposition of the funds of a domestic insurer shall accept, except on behalf of the insurer, or be the beneficiary of any fee, brokerage, gift, or other emolument beca…

§431:4-126 Comply with foreign laws. Any domestic insurer doing business in a state, territory or sovereignty may design and issue insurance contracts and transact insurance in such state, territory or sovereignty as required or permitted by the laws thereof. [L 1987, c 347, pt o…

§431:4-127 Solicitation in other states. (a) No domestic insurer shall knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer. (b) A reciprocating state, as used herein, is one under the laws of which a similar pr…

PART II. DOMESTIC STOCK INSURERS §431:4-201 Other laws applicable. Domestic stock insurers shall be subject to title 23 and any applicable general laws enacted pertaining to stock corporations except where inconsistent with the express provisions of this article. [L 1987, c 347, …

§431:4-202 Increase of capital. (a) A domestic stock insurer may increase its capital stock by complying with section 414-281 and section 431:4-120. The increase in capital shall be effective upon the payment of the increased capital in full in cash. (b) If the increased capital …

§431:4-203 Decrease of capital. (a) A domestic stock insurer may decrease its capital stock by: (b) No such decrease shall be made which results in capital stock less in amount than the minimum required by this code for the classes of insurance thereafter to be transacted by the …

§431:4-204 Dividends to stockholders. (a) No domestic stock insurer shall pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from any realized net profits. (b) Such an insurer may pay a stock dividend out of any available…

§431:4-205 Illegal dividends; reductions. Any director of a domestic stock insurer who votes for or concurs in the declaration or payment of any dividend to stockholders or a reduction of capital stock not authorized by law shall, in addition to any other liability imposed by law…

§431:4-206 Repayment of contributed surplus. Contributions to the surplus of a domestic stock insurer, other than resulting from sale of its capital stock, shall not be subject to repayment except out of surplus in excess of the minimum surplus initially required of such an insur…

§431:4-207 Participating policies. (a) Any domestic stock insurer may, if its charter so provides, issue policies entitled to participate from time to time in the earnings of the insurer through dividends. (b) The directors of a stock insurer may from time to time apportion and p…

§431:4-208 Statement by beneficial owner, director, officer. Every person who is directly or indirectly the beneficial owner of more than ten per cent of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of such company, sh…

§431:4-209 Recovery of profits realized. For the purpose of preventing the unfair use of information which may have been obtained by the beneficial owner, director, or officer by reason of the owner's, director's, or officer's relationship to the company, any profit realized by t…

§431:4-210 Unlawful sales of equity security. It shall be unlawful for any beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company if the person selling the security or the person's principal: No person shall be deemed to have vi…

§431:4-211 Exempt transactions. Section 431:4-209 shall not apply to any purchase and sale, or sale and purchase, and section 431:4-210 shall not apply to any sale, of an equity security of a domestic stock insurance company not then or theretofore held by the person in an invest…

§431:4-212 Arbitrage transactions not affected. Section 431:4-208 to section 431:4-210 shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the commissioner may adopt in order to carry out the purposes of sect…

§431:4-213 Exempt equity securities. Section 431:4-208 to section 431:4-210 shall not apply to equity securities of a domestic stock insurance company if:

§431:4-214 Rules and regulations. The commissioner may make such rules and regulations as may be necessary for the execution of the functions vested in the commissioner by section 431:4-208 to section 431:4-214, and may for such purpose classify domestic stock insurance companies…

§431:4-232 Schedule A: information required in a proxy statement. (a) When applicable, information in schedule A shall include, among other things: (b) If action is to be taken with respect to any matter which is not required to be submitted to a vote of stockholders, the schedul…

§431:4-247 Application of this part to annual report. Notwithstanding section 431:4-238(b) and (c), two copies of any portion of the annual report referred to in section 431:4-238(b), which comments upon or refers to any solicitation subject to this part or to any participant in …

PART III. DOMESTIC MUTUAL INSURERS §431:4-301 Other articles applicable. The provisions applicable to domestic stock insurers shall apply except where inconsistent with the express provisions of this part. [L 1987, c 347, pt of §2]

§431:4-302 Initial qualifications for mutual insurers. (a) The commissioner shall not issue a certificate of authority to a domestic mutual insurer unless: (b) All applications for insurance submitted by such an insurer as fulfilling qualification requirements shall be bona fide …

§431:4-303 Mutual property insurer. (a) When applying for a certificate of authority a domestic mutual property insurer must: (b) The maximum of any single risk proposed to be assumed by the insurer shall not exceed ten per cent of its surplus. Any reinsurance taking effect simul…

§431:4-304 Mutual casualty insurer. (a) When applying for a certificate of authority a domestic mutual insurer proposing to transact casualty insurance, including vehicle insurance, must: (b) In lieu of the applications, premiums, and surplus, it is required to have a surplus amo…

§431:4-305 Mutual vehicle insurer. (a) When applying for a certificate of authority, a domestic mutual insurer formed to transact vehicle insurance must: (b) In lieu of the applications, premiums, and surplus, it is required to have a surplus amounting to not less than $1,500,000…

§431:4-306 Mutual life insurer. (a) When applying for a certificate of authority, a domestic mutual life insurer must: (b) In lieu of the applications, premiums, and surplus, it is required to have a surplus amounting to not less than $900,000 over all liabilities. [L 1987, c 347…

§431:4-307 Mutual accident and health or sickness insurer. (a) When applying for a certificate of authority, a domestic mutual accident and health or sickness insurer shall: (b) In lieu of the applications, premiums, and surplus, it is required to have a surplus amounting to not …

§431:4-308 Membership. Each holder of one or more insurance contracts issued by a domestic mutual insurer, other than a contract of reinsurance, is a member of the insurer, with the rights and obligations of such membership, and each insurance contract issued shall so stipulate. …

§431:4-309 Rights of members. (a) A domestic mutual insurer is owned by and shall be operated in the interest of its members. (b) Each member is entitled to one vote in the election of directors and on matters coming before corporate meetings of members, subject to such reasonabl…

§431:4-310 Bylaws. (a) A domestic mutual insurer shall adopt bylaws for the conduct of its affairs. (b) The bylaws, or any modification of the bylaws, shall be filed with the commissioner. (c) The commissioner shall disapprove any such bylaws, or as so modified, and the commissio…

§431:4-311 Notice of annual meeting. (a) Notice of the time and place of the annual meeting of members of a domestic mutual insurer shall be given by imprinting the notice plainly on the policies issued by the insurer. (b) Any change of the date or place of the annual meeting sha…