Title 58, INSURANCE

Any person, government or governmental agency, state or political 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 leg…

Every member of a domestic mutual insurer shall, except as otherwise provided with respect to nonassessable policies, have only a prorata contingent liability for the discharge of its obligations, which contingent liability shall be expressed in the policy and be in such maximum …

A "mutual" insurer is an insurance corporation without capital stock, owned by its policyholders collectively, who have the right to vote in the election of its directors. Source: SL 1966, ch 111 , ch 16, § 3.

Termination of the policy of any member of a domestic mutual insurer shall not relieve him of contingent liability for his prorata share, if any, of the obligations of the insurer which accrued while the policy was in force. Source: SL 1966, ch 111 , ch 16, § 29 (2).

Any unrealized contingent liability of members shall not constitute an asset of the insurer in any determination of its financial condition. Source: SL 1966, ch 111 , ch 16, § 29 (3).

If at any time the minimum basic surplus required of a domestic mutual insurer by §§ 58-5-21 and 58-5-22 becomes impaired and the deficiency is not cured from other sources, its directors shall forthwith levy an assessment upon only its members who held policies providing for con…

The assessment under § 58-5-32 shall be in an amount to cure such deficiency and to provide a reasonable amount of working funds which shall not exceed five percent of the insurer's liabilities as of the date such deficiency was determined. Source: SL 1966, ch 111 , ch 16, § 30 (…

In levying such assessment, the computation shall be upon the basis of the premiums earned on such policy during the period to which the assessment relates. Source: SL 1966, ch 111 , ch 16, § 30 (3).

No member of a domestic mutual insurer shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or loss payable. Source: SL 1966, ch 111 , ch 16, § 30 (4).

If approved by the director of insurance as being in the best interests of the insurer and its members an assessment pursuant to § 58-5-32 after notice under that section may be secured by placing a lien upon the cash surrender value and accumulated dividends of any life insuranc…

After a domestic mutual insurer has established the surplus prescribed in §§ 58-5-21 and 58-5-22 , and has authority to issue nonassessable policies, it may, with the director's approval, extinguish the contingent liability resulting from assessment of its members and thereafter …

The director shall not approve the extinguishment of contingent liability pursuant to § 58-5-37 unless it applies to all members and all policies of insurance of such insurer. Source: SL 1966, ch 111 , ch 16, § 31 (2).

The initial board of directors of a domestic mutual insurer shall adopt bylaws, subject to the approval of the insurer's members at the next succeeding meeting by a two - thirds vote of those present in person or by proxy. The members shall have power by a two - thirds vote of th…

The applicable laws of this state as to domestic corporations formed for profit shall apply as to both stock and mutual insurers, except where in conflict with the express provisions of this title and the reasonable implications of such provisions. Source: SL 1966, ch 111 , ch 16…

The bylaws of a domestic mutual insurer shall provide the time, notice, quorum, and conduct of annual and special meetings of members. In no event shall a quorum at any meeting of members be less than five percent of the total membership. Source: SL 1966, ch 111 , ch 16, § 16 (2)…

The bylaws of a domestic mutual insurer shall provide that each member is entitled to one vote upon each matter coming to a vote at meetings of members and that a member shall have the right to vote in person or by his written proxy. Such proxy shall be for a reasonable specified…

The bylaws of a domestic mutual insurer shall provide for election of directors by the members, and the number, qualifications, terms of office, and powers of directors. Source: SL 1966, ch 111 , ch 16, § 16 (2) (b).

The bylaws of a domestic mutual insurer shall provide the number, designation, election, terms, and powers and duties of the respective corporate officers. Source: SL 1966, ch 111 , ch 16, § 16 (2) (d).

The bylaws of a domestic mutual insurer shall provide for deposit, custody, disbursement, and accounting of corporate funds. Source: SL 1966, ch 111 , ch 16, § 16 (2) (e).

The bylaws of a domestic mutual insurer shall include other provisions necessary for the management of its affairs. Source: SL 1966, ch 111 , ch 16, § 16 (2) (f).

A domestic mutual insurer shall promptly file with the director of the Division of Insurance a certified copy of its bylaws and all amendments thereto. The director at the time of filing or within thirty days thereafter shall disapprove any bylaw provision deemed by him to be unl…

Before commencing business, the initial board of directors of a domestic stock insurer shall adopt bylaws which shall be subject to the approval by a two - thirds vote of the stockholders present in person or by proxy at the next succeeding stockholders' meeting. Stockholders sha…

The bylaws of a domestic stock insurer shall be subject to the approval of the director as provided in § 58-5-46 . Source: SL 1966, ch 111 , ch 16, § 17 (2).

The director shall have authority to make rules and regulations as to solicitation by mail, or otherwise, of proxies, consents, or authorizations, in respect of any equity securities of a domestic stock insurer, with requirements designed to assure timely, accurate, and reasonabl…

Sections 58-5-6 and 58-5-7 apply to both stock and mutual insurers incorporated in this state after June 30, 1966. Source: SL 1966, ch 111 , ch 16, § 6 (1).

Each insurer shall hold an annual meeting of its stockholders or members, to fill vacancies existing or occurring in the board of directors, receive and consider reports of the insurer's officers as to its affairs, and transact such other business as may properly be brought befor…

Except as otherwise provided in § 58-5-56 , special meetings of the stockholders or members may be called at any time for any purpose by the board of directors, upon not less than ten days' notice or as provided in the bylaws. The notice shall state the purpose of the meeting, an…

At any time, upon written request of not less than one - third of the directors, or of any stockholders or members holding in the aggregate one - fifth of the voting power of all stockholders or members, it shall be the duty of the secretary to call a special meeting of stockhold…

If more than fifteen months elapse without an annual stockholders' or members' meeting, any stockholder or member may compel the board of directors to call such a meeting. Source: SL 1966, ch 111 , ch 16, § 18 (5).

Meetings of stockholders or members of a domestic insurer shall be held in the municipality of its home office or principal office or place of business in this state. However, the director may waive the provisions of this section if a wholly owned subsidiary or a company is locat…

A stockholders' or members' meeting duly held can be organized for the transaction of business whenever a quorum is present. Unless otherwise provided in the bylaws or articles of incorporation: (1) The presence, in person or by proxy, of the holders of not less than ten percent …

No meeting of stockholders or members shall amend the insurer's articles of incorporation unless such amendment to the articles of incorporation is included in the notice of such meeting, which notice must be given by mail at least thirty days prior to such meeting, to those enti…

If an amendment of articles of incorporation would reduce the authorized capital stock of a stock insurer below the amount thereof then outstanding, the director shall not approve the amendment if he has reason to believe that the interests of policyholders or creditors of the in…

The affairs of every domestic insurer shall be managed by the number of directors fixed in the insurer's bylaws, which shall not be less than five nor more than twenty - one directors. Source: SL 1966, ch 111 , ch 16, § 21 (1).

Each director shall be elected from and by the members or stockholders of a domestic insurer. However, directors of a domestic insurer, which is wholly owned by one or more other corporations or other legal entities, need not be stockholders. A majority of the board of directors …

Five or more individuals may incorporate as a stock insurer; ten or more individuals may incorporate as a mutual insurer. The incorporators shall be citizens of the United States, at least twenty - one years of age, and a majority of the incorporators shall be residents of this s…

Any company organized under the laws of any other state or country, which might have been originally qualified and incorporated under the laws of this state, and which has been admitted to do business in this state may become a domestic corporation, and be entitled to certificate…

The term of a director shall extend until his successor has been elected and has qualified. Source: SL 1966, ch 111 , ch 16, § 21 (3).

Any officer or director, or any member of any committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds: (1) Shall not deposit or invest such funds except in the insurer's corporate name; (2) Shall not borrow the fund…

No insurer shall guarantee any financial obligation of any of its officers, directors, stockholders, or members. Source: SL 1966, ch 111 , ch 16, § 22 (2).

Sections 58-5-61 and 58-5-62 shall not prohibit such a director, officer, stockholder, or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights given to other policyholders. Source: SL 1966, ch 111 , ch 16, § 22 (3).

Any of the persons referred to in §§ 58-5-61 to 58-5-63 , inclusive, shall not be deemed pecuniarily interested in any transaction with another corporation in which such person has no pecuniary interest other than ownership of stock or other securities issued by such corporation …

The director of the Division of Insurance may, by regulations, define and permit additional exceptions to the prohibition contained in § 58-5-61 solely to enable payment of reasonable compensation to a director, officer, or employee of the insurer, or to a corporation or firm in …

No officer or employee of a domestic insurer shall be compensated unreasonably and the compensation of any director or officer of such insurer shall not be calculated, directly or indirectly, as a percentage of profits, premiums collected, or insurance written by the insurer with…

No domestic insurer shall grant any pension to any officer or director thereof, or to any member of his family after his death, except that such insurer may in pursuance of the terms of a retirement plan adopted by the board of directors of such insurer and approved by the direct…

The term "equity security" when used in §§ 58-5-69 to 58-5-78 , inclusive, means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any s…