611.67 Management contract services. (1) In this section: (a) “Health maintenance organization” has the meaning given under s. 609.01 (2). (b) “Limited service health organization” has the meaning given under s. 609.01 (3). (c) “Management authority” means the authority to exercise any management control of the corporation or of its underwriting, loss adjustment, investment, general servicing or production function or other major corporate function. (d) “Preferred provider plan” has the meaning given under s. 609.01 (4). (2) Except as provided in sub. (3), a corporation may not be a party to a contract which has the effect of delegating management authority to a person to the substantial exclusion of the board. (3) An insurer that offers a health maintenance organization, limited service health organization or preferred provider plan may delegate management authority with regard to the health maintenance organization, limited service health organization or preferred provider plan to a person other than an officer, director or employee of the insurer if the person exercises the management authority according to the terms of a written contract between the insurer and the person and if the contract is filed with the commissioner and not disapproved by the commissioner under sub. (4). (4) (a) The commissioner may disapprove a contract under sub. (3) within a 30-day period after the date of filing or within a reasonable extension period following the 30-day period if the extension period is specified by notice to the health care plan within the 30-day period. (b) The commissioner may disapprove a contract under sub. (3) only if the commissioner makes one of the findings specified in s. 618.22 (2). History: 1985 a. 29. Cross-reference: See also s. Ins 42.07, Wis. adm. code.
611.69
Dividends and other distributions. (1) DISTRIBUTIONS. Subject to the requirements of ss. 617.22 and 617.225, a stock corporation may make distributions under ss. 180.0623, 180.0640 and 180.1708 (2). (2) UNCLAIMED DIVIDENDS AND DISTRIBUTIONS. Chapter 177 applies to stock corporations. History: 1971 c. 260; 1989 a. 303.
SUBCHAPTER V CORPORATE REORGANIZATION 611.71 Acquisition of all of the shares or of a class of shares of an insurance corporation. (1) EXCHANGE OF SHARES PERMITTED. A domestic stock insurance corporation may acquire, in the manner provided by this section, in exchange for its shares, all the shares, or all the shares of any class, of any other domestic stock insurance corporation, provided no law is violated by the acquisition. (2) OFFER. The acquiring corporation shall submit by 1st class mail to all holders of the shares to be acquired a written offer which shall: (a) Specify the shares to which the offer relates; (b) Prescribe the terms and conditions of the proposed exchange, including the method of acceptance and the manner of exchanging the shares;
611.71
(c) Provide such information respecting both corporations as the commissioner prescribes by rule; (d) Contain a statement summarizing the rights of the shareholders under sub. (5) (b); and (e) Provide for the payment of cash or scrip in lieu of the issuance of fractional shares of the acquiring corporation. (3) COPY OF OFFER. One copy of the offer shall be filed with the commissioner immediately. (4) ACCEPTANCE. The exchange shall be consummated if, within 120 days after the date of the mailing, the offer is accepted by the holders of not less than 90 percent of the shares of each class to which it relates. In ascertaining what percentage have accepted, shares may not be counted if at the date of mailing of the offer they were already held by, or by a nominee for, the acquiring corporation or any affiliate. (5) IMPLEMENTATION. If there is acceptance satisfying sub. (4), the acquiring corporation shall, within 60 days: (a) Execute and file with the commissioner a certificate setting forth the acceptances; and (b) Give written notice of the satisfaction of the requirement, by registered or certified mail return receipt requested, to each holder of shares to which the offer relates who has not yet accepted the offer. The notice, the form of which must be approved by the commissioner, shall include, or be accompanied by, a statement that such shareholders may dissent from the offer by notification to the offeror within 120 days after the date of the mailing and be paid the fair value of their shares as determined under ss. 180.1325 and 180.1328 to 180.1331, and that failure so to notify the offeror shall be deemed acceptance of the offer. For purposes of s. 180.1325, notification to the offeror in accordance with this paragraph constitutes a demand for payment under s. 180.1323. (6) ISSUANCE OF CERTIFICATES OR INFORMATION STATEMENTS. Upon the filing of the certificate under sub. (5) (a): (a) All shares in exchange for which shares of the acquiring corporation are issued shall become the property of the acquiring corporation, whether or not any certificates representing the shares have been surrendered for exchange; (am) If the articles of incorporation or bylaws of the acquired corporation require shares to be issued with certificates, the acquiring corporation shall be entitled to have new certificates for the shares under par. (a) registered in its name as the holder; (b) The acquiring corporation shall do all of the following: 1. Cause certificates for its shares to be issued and delivered to the holders of shares who have already accepted, and thereafter immediately upon acceptance to those who accept or are deemed to have accepted. 2. If the shares are issued without certificates, cause information statements that comply with s. 180.0626 (2) to be issued and delivered to the persons described in subd. 1. 3. Promptly make the cash payments provided in sub. (2) (e) or (5) (b); and (c) The acquiring corporation or a corporate fiduciary designated by it and acceptable to the commissioner, shall hold in trust, for delivery or payment to the persons entitled thereto but not at once located, the certificates or information statements for its shares and cash payable under sub. (2) (e) or (5) (b). (7) OTHER EXCHANGE OFFERS. This section does not prevent a person from making an offer to purchase the shares of an insurance corporation conditioned upon acceptance by holders of less than 90 percent of the shares to which the offer relates. Such an offer may be joined as an alternate offer with an offer made under this section; but the acquiring corporation shall have the right to
May 22, 2026, are designated by NOTES. (Published 5-22-26)
Updated 23-24 Wis. Stats. 16 DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS avail itself of this section only if the requirements of subs. (1) to missioners may hear and receive evidence. A commissioner may (6) are satisfied. attend the hearing in person or by telecommunication. (8) ACQUISITION OF A SMALL MINORITY OF SHARES. If at 2. The commissioner of insurance of this state may opt out of least 90 percent of any class of shares of any domestic stock in- a consolidated hearing, and shall provide notice to the person resurance corporation are held by any other domestic insurance cor- questing the consolidated hearing of the opt out within 10 days poration or its nominee, the owning corporation may proceed un- after the commissioner receives the statement under s. Ins 40.02 der subs. (2) and (5), even if the offer is accepted by less than the (2), Wis. Adm. Code. required number of shareholders. (3m) HEARING NOT REQUIRED. A hearing is not required unHistory: 1971 c. 260; 1973 c. 184; 1989 a. 303. der sub. (3) before approval of a proposed plan of merger or other 611.72 Merger or other acquisition of control of a plan for acquisition of control if the proposed merger is with, or stock insurance corporation. (1) GENERAL. Subject to the proposed acquirer is, an affiliate of the insurer and the prothis section, the applicable provisions of ch. 180 apply to the posed merger or other acquisition of control does not change the merger of a domestic stock insurance corporation or its parent in- controlling person of the insurer. surance holding corporation, except that papers required by those (4) PLANS OF EXCHANGE. Any domestic stock insurance corsections to be filed with the department of financial institutions poration may adopt a plan of exchange of all the outstanding shall instead be filed with the commissioner. shares of its shareholders under which another stock insurance (2) APPROVAL REQUIRED. No proposed plan of merger or corporation, which acquires the shares, shall as consideration other plan for acquisition of control of any domestic stock insur- transfer its own shares or other securities issued by it or pay cash ance corporation or its parent insurance holding corporation par- or other consideration, or pay or provide any combination of the ticipating in the transaction may be executed unless it has been foregoing types of consideration. The procedure for the adoption and approval of a plan of exchange and the rights of shareholders approved by the commissioner. (3) GROUNDS FOR DISAPPROVAL. (am) The commissioner of the participating corporations shall be the same as for a merger shall approve the plan if the commissioner finds, after a hearing, under subs. (2) and (3). History: 1971 c. 260; 1973 c. 184; 1979 c. 94; 1989 a. 303; 1995 a. 27; 1999 a. unless a hearing is not required under sub. (3m), that it would not 30; 2001 a. 44; 2003 a. 321; 2007 a. 170; 2013 a. 279; 2021 a. 258. violate the law or be contrary to the interests of the insureds of any participating domestic corporation or of the Wisconsin in- 611.73 Merger of mutuals. (1) AUTHORIZATION, DOMESsureds of any participating nondomestic corporation and that: TIC CORPORATIONS. (a) In general. Any 2 or more domestic mu1. After the change of control, the domestic stock insurance tuals may merge under the procedures of this section and ss. corporation or any domestic stock insurance corporation con- 181.1101 to 181.11055, except that papers required by those sectrolled by the insurance holding corporation would be able to sat- tions to be filed with the department of financial institutions shall isfy the requirements for the issuance of a license to write the line instead be filed with the commissioner. or lines of insurance for which it is presently licensed; (b) Plan of merger and board resolution. The board of direc2. The effect of the merger or other acquisition of control tors of each mutual shall, by resolution adopted by each such would not be to create a monopoly or substantially to lessen com- board, approve a plan of merger that includes all of the following: petition in insurance in this state; 1. The names of the mutuals proposing to merge and the 3. The financial condition of any acquiring party is not likely name of the surviving mutual into which they propose to merge. to jeopardize the financial stability of the domestic stock insur2. The terms and conditions of the proposed merger. ance corporation or its parent insurance holding corporation, or 3. The respective interests and rights of the members of the prejudice the interests of its Wisconsin policyholders; merging mutuals in the surviving mutual. 4. The plans or proposals which the acquiring party has to 4. Any change in the articles of incorporation of the survivliquidate the domestic stock insurance corporation or its parent ing mutual to be effected by the merger. insurance holding corporation, sell its assets, merge it with any 5. Other provisions with respect to the proposed merger that person or make any other material change in its business or corare considered necessary and desirable. porate structure or management, are fair and reasonable to policy(c) Approval of merger. A plan of merger may be adopted holders of the domestic stock insurance corporation or in the pubonly in the following manner: lic interest; and 1. If the articles of incorporation or bylaws of a merging mu5. The competence and integrity of those persons who would control the operation of the domestic stock insurance corporation tual give members the right to vote on the merger, the board of dior its parent insurance holding corporation are such that it would rectors of the mutual shall adopt a resolution approving the probe in the interest of the policyholders of the corporation and of posed plan and directing that it be submitted to a vote at a meeting of members, which may be either an annual or a special meeting. the public to permit the merger or acquisition of control. (bm) 1. If the proposed merger or other acquisition of control Written notice setting forth the proposed plan or summary of the will require the approval of more than one commissioner, the plan shall be given to each member entitled to vote at the meeting hearing under par. (am) may be held on a consolidated basis upon within the time and in the manner provided in this chapter for the the request of a person filing a statement with the commissioner giving of notice of meetings of members. The proposed plan of insurance of this state under s. Ins 40.02 (2), Wis. Adm. Code, shall be adopted by at least two-thirds of the votes entitled to be which request must be made when the statement is filed. That cast by the members present or represented by proxy at the person shall file a copy of the statement under s. Ins 40.02 (2), meeting. 2. If the articles of incorporation or bylaws of any merging Wis. Adm. Code, with the National Association of Insurance Commissioners within 5 days after making the request for a con- mutual do not give the members the right to vote on the merger, a solidated hearing. A hearing conducted on a consolidated basis plan of merger shall be adopted at a meeting of the board of direcshall be public and held within the United States before the com- tors of each mutual by at least a majority of the directors in office. (d) Abandonment of merger. After approval under par. (c) and missioners of the states in which the insurers involved in the merger or other acquisition of control are domiciled. The com- prior to the filing of the articles of merger, the merger may be 611.71
May 22, 2026, are designated by NOTES. (Published 5-22-26)
17
Updated 23-24 Wis. Stats. DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS
abandoned pursuant to the provisions for abandonment, if any, set forth in the plan of merger. (2) AUTHORIZATION, DOMESTIC AND FOREIGN CORPORATIONS. (a) In general. Any 2 or more domestic and foreign mutuals may merge if the merger is permitted by the laws of the state in which the foreign mutuals are organized. Each domestic mutual shall comply with the provisions of this section with respect to the merger of domestic corporations and each foreign mutual shall comply with the applicable provisions of the laws of the state under which it is organized. (b) Effect of merger. The effect of a merger under this subsection is the same as in the case of the merger of domestic mutuals, if the surviving mutual is to be governed by the laws of this state. If the surviving mutual is to be governed by the laws of a state other than this state, the effect of the merger is the same as in the case of the merger of domestic mutuals except as provided by the laws of that other state. (3) APPROVAL BY THE COMMISSIONER. (a) The plan of merger shall be submitted to the commissioner for his or her approval after any necessary action by the boards and before any necessary action by the policyholders. The commissioner shall approve the plan unless he or she finds, after a hearing, that the proposed merger would be contrary to the law or to the interests of the insureds of any participating domestic corporation or the Wisconsin insureds of any participating nondomestic corporation. (b) 1. If the proposed merger of 2 or more domestic and foreign mutuals will require the approval of more than one commissioner, the hearing under par. (a) may be held on a consolidated basis upon the request of a person filing with the commissioner of insurance of this state the plan of merger under par. (a) and the statement under s. Ins 40.02 (2), Wis. Adm. Code. The person must request a consolidated hearing when the plan of merger and statement are filed. That person shall file copies of the plan of merger and the statement under s. Ins 40.02 (2), Wis. Adm. Code, with the National Association of Insurance Commissioners within 5 days after making the request for a consolidated hearing. A hearing conducted on a consolidated basis shall be public and held within the United States before the commissioners of the states in which the insurers involved in the merger are domiciled. The commissioners may hear and receive evidence. A commissioner may attend the hearing in person or by telecommunication. 2. The commissioner of insurance of this state may opt out of a consolidated hearing, and shall provide notice to the person requesting the consolidated hearing of the opt out within 10 days after the commissioner receives the plan of merger under par. (a) and the statement under s. Ins 40.02 (2), Wis. Adm. Code. (4) VOTING BY POLICYHOLDERS. The commissioner may order that the plan submitted to him or her under sub. (3) (a) be amended to provide for voting by policyholders of any mutual involved. History: 1971 c. 260; 1973 c. 184; 1979 c. 102 ss. 105, 236 (20); 1995 a. 27; 1997 a. 79; 2013 a. 279; 2021 a. 258.
611.74 Voluntary dissolution of domestic insurance corporations. (1) PLAN OF DISSOLUTION. At least 60 days prior to the submission to shareholders or policyholders of any proposed voluntary dissolution of an insurance corporation under s. 180.1402 or 181.1401 the plan shall be filed with the commissioner. The commissioner may require the submission of additional information to establish the financial condition of the corporation or other facts relevant to the proposed dissolution. If the shareholders or policyholders adopt the resolution to dissolve, the commissioner shall, within 30 days after the adoption of the resolution, begin to examine the corporation. The commissioner shall approve the dissolution unless, after a hearing, the commis-
611.75
sioner finds that it is insolvent or may become insolvent in the process of dissolution. Subject to chs. 600 to 645, upon approval, the corporation may dissolve under ss. 180.1402 to 180.1408 and 180.1706, or ss. 181.1401 to 181.1407, except that papers required by those sections to be filed with the department of financial institutions shall instead be filed with the commissioner. Upon disapproval, the commissioner shall petition the court for liquidation or for rehabilitation under ch. 645. (2) CONVERSION TO INVOLUNTARY LIQUIDATION. The corporation may at any time during the liquidation under ss. 180.1402 to 180.1408 or under ss. 181.1401 to 181.1407 apply to the commissioner to have the liquidation continued under the commissioner’s supervision; thereupon the commissioner shall apply to the court for liquidation under s. 645.41 (10). (3) REVOCATION OF VOLUNTARY DISSOLUTION. If the corporation revokes the voluntary dissolution proceedings under ss. 180.1404 and 180.1706 or under s. 181.1404, a copy of the articles of revocation of dissolution prepared under s. 180.1404 or 181.1404 shall be filed with the commissioner. (4) DISTRIBUTION OF ASSETS OF A MUTUAL. No distribution may be made to policyholders in excess of the amounts to which they are entitled under s. 645.72 (4). Any excess over such amounts shall be paid into the state treasury to the credit of the common school fund. History: 1971 c. 260; 1973 c. 184; 1977 c. 203; 1979 c. 102; 1979 c. 109 s. 16; 1989 a. 303; 1991 a. 32; 1995 a. 27; 1997 a. 79.
611.75 Conversion of a domestic stock corporation into a mutual. A domestic stock corporation may be converted into a domestic mutual as follows: (1) ACTION BY BOARD. The board shall adopt a plan of conversion. Thereafter no additional shares of capital stock shall be issued except that stock options to purchase capital stock may continue to be issued under existing contracts and outstanding options may continue to be exercised until the conversion is executed under sub. (6). (2) PLAN OF CONVERSION. (a) The plan of conversion shall provide for the purchase by the corporation of all of its outstanding capital stock, at a price either specified in the plan or to be determined under a formula specified in the plan, for cash, specified debt securities to be issued by the corporation, or both. All holders of capital stock of the same class shall have the same rights under the plan. Shareholders may be given an election to take all or a portion of the price in the specified debt securities. Debt securities may be of any class authorized for mutual corporations under s. 611.33 (2). (b) The plan shall provide a fair procedure subject to the commissioner’s supervision to value contractual obligations of the corporation, such as those relating to stock options, that must be terminated on the date of conversion and are compensable under sub. (6) (b). (3) APPROVAL REQUIREMENT. No conversion may be effected unless the plan of conversion is approved by the commissioner. The corporation shall file with the plan so much of the information under s. 611.13 (2) for the new mutual as the commissioner reasonably requires. (4) CONDITION FOR APPROVAL. The commissioner shall approve the conversion unless he or she finds, after a hearing, that: (a) The conversion would violate the law; or (b) Its terms are not fair to the shareholders or the policyholders; or (c) The resulting mutual would not meet the requirements for a certificate of authority under s. 611.20. (5) APPROVAL BY SHAREHOLDERS. After the commissioner approves the plan of conversion, it shall be submitted to the shareholders for approval by the affirmative vote of a majority of
May 22, 2026, are designated by NOTES. (Published 5-22-26)
Updated 23-24 Wis. Stats. 18 DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS each class of shares entitled to vote. Only shareholders of record mittee shall receive reasonable compensation and shall be reimon the date of the adoption under sub. (1) may vote. bursed for reasonable expenses in discharging their duties. They (6) CONVERSION. (a) Continuation of corporation. If the may, as reasonably necessary, employ consultants to advise them shareholders approve the plan of conversion under sub. (5), the on technical problems of the appraisal. The appraisal committee commissioner shall issue a new certificate of authority. The is- shall consider the assets and liabilities of the corporation, adjustsuance of the certificate is the act of conversion, the corporation ing liabilities to take account of the amounts of any reserves in exat once becomes a mutual and is no longer a stock corporation. cess of or below realistic estimates, the value of the marketing orThe mutual shall be deemed to have been organized at the time ganization, the value of goodwill, the going-concern value and the converted stock corporation was organized. The board shall any other factor having an influence on the value of the corporation, including, in the case of a mutual life insurance company, thereupon implement the plan of conversion. (b) Termination of contract rights. Any contractual obligation the estimated amount needed to continue to maintain dividend inconsistent with the nature of a mutual, including any obligation scales on policies under s. 632.62 (4) (b) at the same level after to issue or to redeem stock options, shall terminate upon the act conversion as before conversion. of conversion under par. (a), without compensation unless the (d) Presumption. In a proceeding under this section, any reobligation was legally binding before April 30, 1972. port adopted by an appraisal committee under par. (c) or exami(7) EXPENSES. The corporation may not pay compensation of nation report concerning the domestic mutual or its affiliate is adany kind to any person other than regular salaries to existing per- missible as evidence and the facts asserted in the reports are presonnel, in connection with the proposed conversion, other than sumed to be true. for clerical and mailing expenses, except that with the commis(4) PLAN OF CONVERSION. The board may adopt a plan of sioner’s approval payment may be made at reasonable rates for conversion, which, unless sub. (4m) applies, shall specify: printing costs and for legal and other professional fees for ser(a) The number of shares proposed to be authorized for the vices actually rendered. All expenses of the conversion, includ- new stock corporation, their par value and the price at which they ing the expenses incurred by the commissioner and the prorated will be offered to policyholders, which price may not exceed onesalaries of any insurance office staff members involved, shall be half of the median equitable share of all policyholders under par. borne by the corporation being converted. (b); History: 1971 c. 260; 1979 c. 102 s. 236 (5). (b) That each person who has been a policyholder and has 611.76 Conversion of a domestic mutual into a stock paid premiums within 5 years prior to the resolution under sub. corporation. (1) CONVERSION PERMITTED. (a) General. Ex- (2) shall be entitled without additional payment to so much comcept under par. (b), a domestic mutual may be converted into a mon stock of the new stock corporation as his or her equitable domestic stock corporation under subs. (2) to (11). share of the value of the converting corporation will purchase; (b) Conversion of related insurers. No domestic mutual that that the equitable share shall be determined by the ratio which the is affiliated with other mutuals may be converted into a stock cor- net premium (gross premium less return premium and dividends poration, unless all such affiliated mutuals are also converted at paid) he or she has paid to the corporation during the 5 years imthe same time, or the commissioner finds that the interests of the mediately preceding the resolution under sub. (2) bears to the topolicyholders of the remaining mutuals can be permanently pro- tal net premiums received by the corporation during the same petected by limitations on the corporate powers of the new stock riod; and that, if the equitable share is sufficient only for the purcorporation or on its authority to do business, or otherwise. chase of a fraction of a share of stock, the policyholder shall have (c) Conversion and merger. A domestic mutual may adopt a the option either to receive the value of the fractional share in plan of acquisition or merger as part of a plan of conversion under cash or to purchase a full share by paying the balance in cash; this section. The commissioner shall approve the plan of acquisi(bm) Notwithstanding par. (b), that each person who was a tion or merger as part of the plan of conversion unless grounds for policyholder of a mutual life insurance company on the date of disapproval exist under s. 611.72 (3) (am). the resolution under sub. (2) or within 5 years prior to that date (2) RESOLUTION BY THE BOARD. The board shall pass a reso- shall be entitled to an equitable share based on a formula which lution to the effect that such conversion is in the best interests of fairly reflects the policyholder’s interest in the company and the the policyholders. The resolution shall specify the reasons for policies and contracts issued by the company to the policyholder, and the purposes of the proposed conversion, and the manner in and which takes into account premiums paid, cash surrender valwhich the conversion is expected to benefit policyholders. ues, policy loans, reserves, surplus, benefits payable and other (3) INVESTIGATION BY COMMISSIONER. (a) Application. The relevant factors; and that the equitable share shall be provided to board shall file with the commissioner the resolution and any ad- the policyholders on a uniform basis approved by the commisditional documents and information he or she reasonably re- sioner in the form of common stock, cash, increased benefits, quires, whereupon the commissioner shall order examination and lower premiums or a combination of those forms; appraisal of the corporation, unless he or she finds that: (c) The procedure for stock subscriptions which shall include 1. The resolution is defective upon its face; or a written offer to each such policyholder indicating his or her in2. The reason for or the purposes of the proposed conversion dividual equitable share and the terms of subscription; are contrary to law or to the interests of the policyholders or the (d) That no common stock under par. (b) or (dm) may be ispublic. sued to persons other than the policyholders under par. (b) or the (b) Examination. The commissioner shall cause to be made corporation under par. (dm) until all subscriptions by the policyan examination of the company under s. 601.43 to determine its holders and corporation, respectively, have been filled and that financial condition and whether it is operated in accordance with thereafter any new issue of stock for 5 years after the conversion shall first be offered to the persons who have become shareholdthe law. (c) Appraisal. The commissioner shall appoint an appraisal ers under par. (b) or (dm) in proportion to their interests under committee, consisting of at least 3 qualified and disinterested per- par. (b) or (dm); (dm) Notwithstanding par. (b), whether the shares of common sons with differing kinds of training, to determine the value of the corporation as of the date of the resolution in sub. (2) or, if sub. stock representing the equitable shares of the policyholders of a (4m) applies, as of the date of conversion. Members of the com- mutual life insurance company may, with the approval of the 611.75
May 22, 2026, are designated by NOTES. (Published 5-22-26)
19
Updated 23-24 Wis. Stats. DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS
commissioner, be issued to a corporation organized under ch. 180 with the policyholders to be stockholders of the corporation and, if so issued, that each policyholder is entitled to his or her equitable share calculated under par. (bm) in shares of common stock of the corporation; (e) That no policyholder, other than a policyholder of a mutual life insurance company, may receive a distribution of shares valued in excess of the amount to which he or she is entitled under s. 645.72 (4). Any excess over that amount shall be distributed in shares to the state treasury for the benefit of the common school fund. After 5 years the shares may be sold by the secretary of administration at his or her discretion and the proceeds credited to the common school fund; and (f) Except with the approval of the commissioner, that during the first 5 years after the conversion the directors and officers of a mutual life insurance company and persons acting in concert with them may not, in the aggregate, acquire control over more than 5 percent of the common stock of the converted stock life insurance company, the corporation formed under par. (dm) or any other corporation which acquires control of more than 5 percent of the common stock of either the converted stock life insurance company or the corporation formed under par. (dm). (4m) INSURERS IN FINANCIALLY HAZARDOUS CONDITION; PLAN OF CONVERSION. If grounds exist under s. 645.41 (2) or (4) for rehabilitation or liquidation of a domestic mutual or are reasonably expected to exist within one year, the board may adopt a plan of conversion which shall specify all of the following: (a) That each person who has been a policyholder and has paid premiums within 5 years prior to the date the resolution is adopted under sub. (2) is entitled to receive his or her equitable share of the value of the domestic mutual, adjusted to reflect the condition of the domestic mutual immediately prior to the date of conversion; that the equitable share shall be determined by the ratio that the net premium paid by the policyholder during the 5 years immediately preceding the date of the adoption of the resolution under sub. (2) bears to the total net premium received by the domestic mutual during that period, unless the commissioner approves another method of determining equitable shares with the net premium to be calculated as gross premium less premium returned and dividends paid to policyholders; that each policyholder’s equitable share may be distributed in any form including securities of the insurer or another person, debt instruments, property or cash; and that the value of the domestic mutual will be finally determined immediately prior to the date of conversion and with the approval of the commissioner. (b) Any person who will, under the plan of conversion, acquire control of the domestic stock corporation and the manner in which this will occur. (c) That sufficient capital will be contributed or other measures taken to remove any grounds for liquidation under s. 645.41 (2) or (4) and to reasonably assure that those grounds will not exist within the 5 years immediately following the date of conversion. (5) APPLICATION FOR APPROVAL. The plan of conversion shall be submitted to the commissioner for approval, together with: (a) The proposed articles and bylaws of the new stock corporation which shall comply with s. 611.12; (b) So much of the information specified in s. 611.13 (2) as the commissioner reasonably requires; (c) A projection of the planned or anticipated financial situation of the new corporation for 5 years after the conversion. (6) HEARING. (a) The commissioner shall hold a hearing after receipt of a plan of conversion, notice of which shall be mailed to the last-known address of each person who was a poli-
611.76
cyholder of the corporation on the date of the resolution under sub. (2), together with a copy of the plan of conversion or a copy of a summary of the plan, if the commissioner approves the summary, and any comment the commissioner considers necessary for the adequate information of policyholders. If the plan of conversion is submitted under sub. (4m), the hearing shall be held not less than 10 days nor more than 30 days after notice is mailed. Failure to mail notice to a policyholder does not invalidate a proceeding under this section if the commissioner determines the domestic mutual has substantially complied with this subsection and has attempted in good faith to mail notice to all policyholders entitled to notice. (b) With regard to a mutual life insurance company, the notice, the plan or a summary of the plan, and any comments under par. (a) shall also be mailed to the commissioner of every jurisdiction in which the mutual life insurance company is authorized to do any business. (c) Any policyholder under par. (a) and any commissioner under par. (b) may present written or oral statements at the hearing and may present written statements within a period after the hearing specified by the commissioner. The commissioner shall take statements presented under this paragraph into consideration in making the determination under sub. (7). (7) APPROVAL BY COMMISSIONER. (a) The commissioner shall approve the plan of conversion unless he or she finds that the plan violates the law or is contrary to the interests of policyholders or the public. (b) In determining the interests of the policyholders and the public, the commissioner shall consider whether the reorganization would be detrimental to the safety and soundness of the insurer or the contractual rights and reasonable expectations of the persons who are policyholders on or before the effective date of the reorganization. The commissioner shall also take into consideration any conclusions and recommendations on the subject of such reorganizations published by recognized organizations of professional life insurance actuaries. The commissioner may by rule establish standards applicable to such reorganizations. (8) APPROVAL BY POLICYHOLDERS. After approval under sub. (7), the conversion plan shall be submitted to a vote of the persons who were policyholders of the mutual on the date of the resolution under sub. (2). (9) CONVERSION. If the policyholders approve the conversion under sub. (8), the commissioner shall issue a new certificate of authority. The issuance of the certificate is the act of conversion, the mutual at once becomes a stock corporation and is no longer a mutual. The stock corporation shall be deemed to have been organized at the time the converted mutual was organized. The directors, officers, agents and employees of the mutual shall continue in like capacity with the stock corporation. (10) EXPENSES. The corporation may not pay compensation of any kind to any person other than regular salaries to existing personnel, in connection with the proposed conversion, other than for clerical and mailing expenses, except that with the commissioner’s approval payment may be made at reasonable rates for printing costs and for legal and other professional fees for services actually rendered. All expenses of the conversion, including the expenses incurred by the commissioner and the prorated salaries of any insurance office staff members involved, shall be borne by the corporation being converted. (11) SECURITY REGULATION. The filing with the division of securities of a certified copy of the plan of conversion as approved by the commissioner constitutes registration under s. 551.305 of the securities authorized to be issued thereunder. History: 1971 c. 260; 1979 c. 102 ss. 107, 236 (5), (13); 1981 c. 314; 1983 a. 192, 215; 1985 a. 29, 215; 1995 a. 27; 1997 a. 79; 1999 a. 85; 2003 a. 33; 2007 a. 196; 2013 a. 279.
May 22, 2026, are designated by NOTES. (Published 5-22-26)
Updated 23-24 Wis. Stats. 20 DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS 2. If the articles of incorporation do not give members the 611.77 Conversion of assessable to nonassessable and nonassessable to assessable mutuals. (1) ASSESS- right to vote on the sale, lease, exchange or other disposition of all ABLE TO NONASSESSABLE. Whenever an assessable mutual accuor substantially all of a mutual’s property and assets, the sale, mulates enough surplus to satisfy the financial requirements for lease, exchange or other disposition may be authorized by the the operation of a nonassessable mutual under like conditions, it vote of the majority of the directors in office. may apply for a certificate of authority authorizing it to sell (2) REPORT TO COMMISSIONER. Any action by which an innonassessable policies. The commissioner shall issue a certifi- surance corporation proposes to transfer to another person or to cate of authority designating it a nonassessable mutual if he or reinsure any part of its insurance business, other than in the norshe finds that the applicant satisfies the requirements of the law mal and usual course of business, or to sell, lease, exchange, and that the issuance of nonassessable policies will not endanger mortgage, pledge or otherwise dispose of or encumber more than the interests of its insureds or the public. Policies issued there- one-fourth of its assets, shall be reported to the commissioner not after shall be nonassessable; existing policies shall continue in ef- less than 30 days in advance of the proposed effective date. The fect and shall also become nonassessable. commissioner may defer the effective date for an additional pe(2) NONASSESSABLE TO ASSESSABLE. A nonassessable mu- riod not exceeding 30 days by written notice to the corporation tual may apply to the commissioner for a certificate of authority before expiration of the initial 30-day period. designating it an assessable mutual. The commissioner shall is(3) DISAPPROVAL. The commissioner may, within the 30-day sue the certificate if the law permits such a corporation to issue assessable policies and if he or she finds that the conversion will period or its extension, prohibit the proposed action if it is connot endanger the interests of present or future insureds or of the trary to law or to the interests of insureds or the public or if it will public. All policies issued after conversion shall be assessable, make possible the circumvention of any of the requirements of ss. and all policies in effect on the date of conversion shall be assess- 611.71 to 611.77. History: 1971 c. 260; 1979 c. 102; 1989 a. 303; 1997 a. 79; 1999 a. 30. able except to the extent that there is a contract right then existing not to be assessed. 611.785 Dissenters’ rights. Sections 180.1301 to History: 1971 c. 260; 1979 c. 102 s. 236 (5). 180.1331 apply to stock corporations, except as provided in s. 611.78 Transfer of business or assets. (1) SALE, 611.71 (5) (b) with respect to a shareholder’s right to dissent from a share exchange consummated under s. 611.71. LEASE, EXCHANGE OR MORTGAGE OF A STOCK CORPORATION’S History: 1989 a. 303. ASSETS. Except as modified by subs. (2) and (3), ss. 180.1202, 180.1706 and 180.1708 (6) apply to stock corporations. 611.79 Conversion of a domestic mutual life insur(1m) SALE, LEASE, EXCHANGE OR MORTGAGE OF A MU- ance company into a fraternal. A domestic mutual life inTUAL’S ASSETS. (a) Except as modified by subs. (2) and (3), a surance company may be converted into a fraternal under ch. 614, sale, lease, exchange or other disposition of less than substan- as follows: tially all of the property and assets of a mutual, and the mortgage (1) CONVERSION PLAN. The board of directors of the comor pledge of any or all property and assets of a mutual, whether or pany shall adopt a plan of conversion stating: not made in the usual and regular course of its affairs, may be (a) The reasons for and the purposes of the proposed action; made upon the terms and conditions authorized by the mutual’s (b) The proposed articles and bylaws for the new fraternal; board of directors. Unless otherwise provided by the articles of and incorporation, consent of the members is not required for a sale, (c) The proposed procedure and estimated expenses for imlease, exchange or other disposition of property, or for a mortgage or pledge of property, authorized under this paragraph. plementing the conversion. (b) A sale, lease, exchange or other disposition of all or sub(2) APPROVAL BY COMMISSIONER. The plan shall be filed stantially all of the property and assets of a mutual may be made with the commissioner for approval, together with so much of the upon such terms and conditions as may be authorized in the fol- information under s. 614.13 (2) as the commissioner reasonably lowing manner: requires. The commissioner shall approve the plan unless find1. If the articles of incorporation give members the right to ing, after a hearing, that it would be contrary to the law, that the vote on the sale, lease, exchange or other disposition of all or sub- new fraternal would not satisfy the requirements for a certificate stantially all of the mutual’s property and assets, the board of di- of authority under s. 611.20 as incorporated by s. 614.20, or that rectors shall adopt a resolution recommending the sale, lease, ex- the plan would be contrary to the interests of policyholders or the change or other disposition and directing that it be submitted to a public. vote at an annual or special meeting of the members. Written no(3) APPROVAL BY MEMBERS. After being approved by the tice stating that the purpose, or one of the purposes, of the meet- commissioner, the plan shall be submitted to the policyholders ing is to consider the sale, lease, exchange or other disposition of for their approval. all, or substantially all, of the property and assets of the mutual (4) REPORT TO COMMISSIONER. A copy of the resolution shall be given to each member entitled to vote at the meeting, adopted by the members shall be filed with the commissioner, inwithin the time and in the manner provided by this chapter for providing notice of member meetings. At the meeting, the mem- dicating the number of policyholders voting, the method of voting bers may authorize the sale, lease, exchange or other disposition and the number of votes cast in favor of the plan. (5) CERTIFICATE OF AUTHORITY. If all requirements of the and may authorize the board of directors to fix any or all of the terms and conditions of the sale, lease, exchange or other disposi- law are met, the commissioner shall issue a certificate of authortion. The authorization shall be by the affirmative vote of at least ity for the new fraternal. Thereupon the mutual shall cease its letwo-thirds of the members present or represented by proxy at the gal existence and the corporate existence of the new fraternal meeting. After the authorization by a vote of the members, the shall begin, but it shall be deemed to have been incorporated as of board of directors, nevertheless, in its discretion, may abandon the date the converted mutual was incorporated. The new fraterthe sale, lease, exchange or other disposition, subject to the rights nal shall have all the assets and be liable for all of the obligations of 3rd parties under any contracts relating thereto, without further of the converted mutual. The commissioner may grant a period action or approval by the members. not exceeding one year for adjustment to the requirements of ch. 611.77
May 22, 2026, are designated by NOTES. (Published 5-22-26)
21
Updated 23-24 Wis. Stats. DOMESTIC STOCK AND MUTUAL INSURANCE CORPORATIONS
614, specifying the extent to which particular provisions of ch. 614 do not apply. History: 1975 c. 373, 421. Legislative Council Note, 1975: This provision is not likely to be used often but it is desirable in order to enlarge the options open to legitimate organizations. If members of a mutual wish to accept the additional restrictions imposed by fraternal law in return for its benefits, they should be free to do so. [Bill 643-S]
611.94
SUBCHAPTER VI MISCELLANEOUS PROVISIONS 611.94 Trustee of proceeds. Section 632.42 applies to insurers doing a life insurance business. History: 1979 c. 102.
May 22, 2026, are designated by NOTES. (Published 5-22-26)