A mutual insurer may not be converted to a stock insurer.
The director shall adopt regulations regarding the conduct of meetings of shareholders and members of an insurer and the purchase, sale, and bartering of votes and proxies.
A domestic 'mutual' insurer is an incorporated insurer without capital stock, and the governing body of which is elected by the policyholders.
A domestic 'stock' insurer is an incorporated insurer with capital divided into shares and owned by its stockholders.
Solicitation for sale of securities to members of the public under a solicitation permit shall be made only by individuals licensed under the provisions of the securities act.
The bylaws of a domestic stock life insurer may provide a plan for its policyholders to participate with stockholders in the election of its directors.
The director shall adopt regulations concerning proxies, consents and authorizations in respect to securities issued by domestic insurance companies. The regulations adopted shall substantially conform to the recommendations of the National Association of Insurance Commissioners.
An insurer may not enter into an agreement to withhold from sale any of its property. Disposition of an insurer's property shall be at all times within the control of its board of directors.
The applicable laws of this state as to domestic corporations formed for profit apply to domestic stock insurers and domestic mutual insurers, except where in conflict with the express provisions of this title and the reasonable implications of the provisions.
A transfer of the stock of a domestic insurer made during the existence of an impairment of the insurer's capital does not release the stockholder making the transfer from liability as a stockholder of the insurer that accrued before the transfer.
The granting of a solicitation permit is permissive only and does not constitute an endorsement by the director of any person or thing related to the proposed insurer, corporation, or syndicate and the existence of the permit may not be advertised or used as an inducement in a solicitation. The substance of this section in bold faced type not less than 10 point shall be printed at the top of each solicitation permit.
Upon the filing of the bond required by AS 21.69.140 after notice by the director, the director shall
(1) file the articles of incorporation of the proposed incorporated insurer or other corporation with the commissioner;
(2) issue to the applicant a solicitation permit.
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of a national emergency the home office or principal place of business of the insurer shall be at the location named or described in the resolution. The resolution may provide for alternate locations and establish an order of preference.
If the proposed domestic insurer fails to complete its organization and to secure its original certificate of authority within one year from and after the date of its certificate of incorporation, its corporate powers shall cease, and the director shall return or cause to be returned to the persons entitled thereto all advance deposits or payments of premiums held in trust under AS 21.69.250 .
The directors of the insurer shall be individually liable for losses incurred under policies issued by the insurer after expiration of the period provided in AS 21.69.530 for curing a deficiency of the insurer's capital stock or surplus and before the deficiency is cured.
This chapter applies only to domestic stock insurers and domestic mutual insurers transacting, or proposing to transact, insurance on the cash premium or legal reserve plan, except that AS 21.69.280 and 21.69.460 also apply to foreign and alien insurers.
The board of directors of a domestic insurer may at any time adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws for the insurer, which shall be operative during a national emergency and which may, notwithstanding any different provisions of the regular bylaws, or of the applicable statutes, or of the insurer's charter, make any provision that may be reasonably necessary for the operation of the insurer during the period of the emergency.
(a) The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds that represents net realized savings and net realized earnings in excess of the surplus required by law to be maintained.
(b) A dividend otherwise proper may be payable out of the savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
(a) The incorporators of an insurer or other corporation, or the persons proposing to form a reciprocal insurer, or a syndicate, shall be jointly and severally liable for its debts or liabilities until it has secured a certificate of authority, if an insurer, or has completed its organization if a corporation other than an insurer or a syndicate.
(b) Any portion of funds received on account of stock or syndicate subscriptions which is allowed under the solicitation permit, may be applied concurrently toward the payment of promotion and organization expense theretofore incurred.
All applications for insurance obtained in forming a mutual or reciprocal insurer must provide that
(1) issuance of the policy is contingent upon completion of organization of the insurer and issuance to it of a certificate of authority;
(2) the prepaid premium or deposit will be refunded in full to the applicant if the organization is not completed and certificate of authority issued before the solicitation permit's date of expiration;
(3) the agreement for insurance is not effective until a policy has been issued under it.
The director shall revoke the authority of a domestic mutual insurer to issue policies without contingent liability if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for the authority, or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked. During the absence of the authority the insurer may not issue a policy without including a provision for the contingent liability of the policyholder or renew a policy that is renewable at the option of the insurer without an endorsement providing for the contingent liability.
A bylaw adopted at a meeting of stockholders of a domestic insurer may not be modified or revoked except by the stockholders at a subsequent meeting unless the bylaw as adopted or amended by the stockholders grants authority to the board of directors to revoke or modify bylaw provisions; but the board of directors may not revoke or modify a bylaw relating to the qualifications, election, terms, or compensation of directors, or to the calling or notice of meetings of stockholders. A revocation or modification of bylaws made by the directors under this provision shall be presented at the next meeting of stockholders for the information of the stockholders.
(a) 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 or more than 21 directors.
(b) Directors must be elected from and by the members or stockholders of a domestic insurer, except as provided in AS 21.69.350 , at the time and place, and for the terms, not exceeding three years, as may be provided in the insurer's bylaws.
(c) The term of a director extends until a successor has been elected and has qualified.
(a) The director may, for cause, modify a solicitation permit, or may, after a hearing, revoke a solicitation permit for violation of a provision of this title, or of the terms of the permit, or of a proper order of the director, or for misrepresentation.
(b) The director shall revoke a solicitation permit if requested in writing by a majority of the syndicate members, or by a majority of the incorporators and two-thirds of the subscribers to stock or applicants for insurance in the proposed incorporated insurer or corporation, or if the director is requested by a majority of the subscribers of a proposed reciprocal insurer.
At any time the board of directors of a domestic insurer may, by resolution, provide that in the event of a national emergency and in the event of the death or incapacity of the president, the secretary, or the treasurer of the insurer, the officers, or any of them, shall be succeeded in the office by the person named or described in a succession list adopted by the board of directors. The list may be on the basis of named persons or position titles, must establish the order of priority, and may prescribe the conditions under which the powers of the office shall be exercised.
(a) A proposed stock insurer, corporation, or syndicate may not issue a share of stock or participation agreement except for payment in cash or in securities eligible for investment of funds of insurers. Shares or an agreement may not be issued until all subscriptions received under the solicitation permit have been fully paid, or, if an insurer, until a certificate of authority has been issued to it.
(b) Every subscription contract to shares of a stock insurer or other corporation calling for payment in installments, together with all amounts paid, may be forfeited at the option of the corporation, upon failure to make good a delinquency in an installment upon not less than 45 days notice in writing, and every such contract must so provide.
(a) A domestic stock insurer may not pay a cash dividend to stockholders except out of that part of its available surplus funds that is derived from realized net profits on its business.
(b) A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer under AS 21.69.520 .
(c) A dividend otherwise proper may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value.
A domestic mutual insurer, after being authorized to transact one kind of insurance, may be authorized by the director to transact the additional kinds of insurance that are permitted under AS 21.09.060 while otherwise in compliance with this title and while maintaining unimpaired surplus funds in an amount not less than the amount of paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, subject further to the additional expendable surplus requirements of AS 21.09.080 applicable to such a stock insurer.
The director shall withdraw all funds held in escrow and refund to subscribers or applicants all sums paid in on stock or syndicate subscriptions, less that part of the sums paid in on subscriptions as has been allowed and used for promotion and organization expenses, and all sums paid in on insurance applications, and shall dissolve the proposed insurer, corporation or syndicate if
(1) the proposed insurer, corporation, or syndicate fails to complete its organization and obtain full payment for subscriptions and applications, and, if an insurer, it fails to secure its certificate of authority, all before expiration of the solicitation permit; or
(2) the director revokes the solicitation permit.
(a) Each member of a domestic mutual insurer shall, except as provided with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be expressed in the policy and be in the maximum amount that is specified in the insurer's articles of incorporation.
(b) Termination of the policy of the member does not relieve the member of contingent liability for the member's proportion, if any, of the obligations of the insurer that accrued while the policy was in force.
(c) Unrealized contingent liability of members does not constitute an asset of the insurer in a determination of its financial condition.
A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have knowingly exhibited, with intent to deceive, a false account, document, or advertisement, relative to the affairs of an insurer, or of a corporation or syndicate of the kind enumerated in AS 21.69.060 , formed or proposed to be formed, is subject to a civil penalty of not more than $25,000.
(a) When possessing surplus funds in an amount not less than the paid-in capital stock required of a domestic stock insurer transacting like kinds of insurance, a domestic mutual insurer may, upon receipt of the director's order so authorizing, extinguish the contingent liability of its members as to all its policies in force and may omit provisions imposing contingent liability in all its policies currently issued.
(b) A foreign or alien mutual insurer may issue nonassessable policies to its members in this state under its article of incorporation and the laws of its domicile.
(c) A policy of a domestic mutual insurer that, under the director's order, is without contingent liability and thereby nonassessable by its terms may not be subject to assessment for a debt or liability of the insurer.
(a) Each policyholder of a domestic mutual insurer, other than of a reinsurance contract, is a member of the insurer with all rights and obligations of the membership, and the policy must so specify.
(b) A 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. An officer, stockholder, trustee, or legal representative of any such corporation, board, association, or estate may be recognized as acting for or on its behalf for the purpose of the membership, and is not personally liable upon a contract of insurance for acting in the representative capacity.
(c) A domestic corporation may participate as a member of a mutual insurer as an incidental purpose for which the corporation is organized.
The legislature declares that it is desirable for the general welfare and in particular for the welfare of insurance beneficiaries, policyholders, injured claimants, and others that the business of domestic insurers be continued notwithstanding the event of a national emergency. The specific purpose of AS 21.69.650 - 21.69.690 is to facilitate the continued operation of domestic insurers in the event that a national emergency is caused by an attack on the United States or by a nuclear, atomic, or other disaster which makes it impossible or impracticable for an insurer to conduct its business in strict accord with applicable provisions of law, its bylaws, or its charter.
(a) An insurer may not make a disbursement of $100 or more, unless evidenced by a voucher correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the person receiving the money.
(b) If the disbursement is for services and reimbursement, the voucher must describe the services and expenditures.
(c) If the disbursement is in connection with a matter pending before a legislature or public body or before a public official, the voucher must also correctly describe the nature of the matter and of the insurer's interest in it.
(d) If a voucher cannot be obtained, the expenditure referred to in (a) of this section must be evidenced by an affidavit in which is set out the character and object of the expenditure and the reasons for not obtaining the voucher.
(a) All sums collected by a domestic mutual corporation as premiums or fees on qualifying applications for insurance shall be deposited in trust in a bank or trust company in this state under a written trust agreement consistent with this section and AS 21.69.240 (c)(3). The corporation shall file an executed copy of the trust agreement with the director.
(b) Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which the applications were solicited, all funds so held in trust shall become the funds of the insurer, and the insurer, shall thereafter in due course issue and deliver its policies for which premiums had been paid and accepted. The insurance provided by the policies shall be effective as of the date of the certificate of authority or thereafter as provided by the respective policies.
(a) A person forming or proposing to form in this state an insurer, or insurance holding corporation, or stock corporation to finance an insurer or insurance production therefor, or corporation to manage an insurer, or corporation to be attorney in fact for a reciprocal insurer, or a syndicate for any of these purposes, may not advertise, or solicit or receive any funds, agreement, stock subscription, or membership on account thereof unless the person has applied for and has received from the director a solicitation permit.
(b) A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have violated this section is subject to a civil penalty of not more than $25,000.
To voluntarily surrender the certificate of authority of a domestic insurer, a request shall be made to the director to extinguish the certificate of authority six months before the planned effective date of the extinguishment of the charter. Before the request is granted, the director shall conduct an examination under AS 21.06.120 . The examination shall be completed within 12 months before the effective date of an extinguishment and all issues contained in the examination report must be resolved to the satisfaction of the director. Insurance business of the domestic insurer shall be cancelled or reinsured as required under AS 21.69.610 or 21.69.620.
(a) All funds received under a solicitation permit shall be deposited and held in escrow in a bond or trust company under an agreement approved by the director. Funds deposited may not be withdrawn, except
(1) for the payment of promotion and organization expenses as authorized by the solicitation permit;
(2) for the purpose of making a deposit with the director required for the issuance of a certificate of authority to an insurer;
(3) if the proposed organization is not to be an insurer, upon completion of payments on stock or syndicate subscriptions made under the solicitation permit and deposit or appropriation of the funds to the purposes specified in the solicitation permit; or
(4) for making refunds as provided in AS 21.69.190 .
(b) When the director has issued a certificate of authority to an insurer the funds remaining in escrow for its account shall be released to the insurer.
(a) The president, secretary, and treasurer of a mutual insurer shall each file with the director and thereafter maintain in force as long as the person is an officer, a fidelity bond in the sum of $10,000 issued by an authorized corporate surety in favor of the insurer. In lieu of individual bonds, all these officers may be covered under a blanket bond for the same respective amounts; the blanket bond shall be filed with the director.
(b) The premium for the bond shall be payable by the insurer.
(c) A bond is not subject to cancellation except upon written notice to both the insurer and the director, delivered not less than 30 days in advance of the effective date of the cancellation.
(d) The insurer shall provide for the bonding by authorized corporate surety of all other officers in any way responsible for the handling of the funds of the insurer.
(e) This section does not limit the amount of bonded protection which the insurer may carry as to any officer.
(a) An assessment made by an insurer under AS 21.69.440 or 21.69.540 shall be considered to be prima facie correct. The amount of the assessment to be paid by each member as determined by the insurer shall be considered to be likewise prima facie correct.
(b) The insurer shall notify each member of the amount of the assessment to be paid by written notice mailed to the address of the member last of record with the insurer. Failure of the member to receive the notice so mailed, within the time specified for the payment of the assessment or at all, is no defense in an action to collect the assessment.
(c) If a member fails to pay the assessment within the period specified in the notice, which period may not be less than 20 days after mailing, the insurer may institute suit to collect it.
(a) If provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating and nonparticipating basis, and may determine the right to participate and the extent of participation of a class or classes of policies. The classification or determination shall be reasonable, and may not unfairly discriminate between policyholders within the same classifications. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged. A domestic insurer that, before July 1, 1966, has been issuing all or part of its policies on a participating basis without specific authorization in its articles of incorporation may continue to issue the policies on a basis not inconsistent with this section.
(b) After the third policy year a dividend otherwise earned may not be made contingent upon the payment of renewal premium on the policy.
(a) The director shall expeditiously examine the application for a solicitation permit and make an investigation if considered necessary. If the director finds that (1) the application is complete; (2) the documents filed with it are equitable in terms and proper in form; and (3) the agreements made or proposed are equitable to present and future shareholders, subscribers, members, or policyholders, the director shall give notice to the applicant that the director will issue a solicitation permit, stating the terms to be contained in it, upon the filing of the bond required by AS 21.69.140 .
(b) If the director does not so find, or if the director finds that any of the persons named in the application as being associated or to be associated in the formation of the insurer, corporation, or syndicate are untrustworthy, the director shall give notice to the applicant that the permit will not be granted, stating the grounds therefor, and shall refund to the applicant all sums deposited except the application fee.
(a) Upon the liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within 36 months immediately preceding the date the liquidation was authorized or ordered, or date of last termination of the insurer's certificate of authority, whichever date is the earlier.
(b) The distributive share of each member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of that member's membership bear to the aggregate of all premiums earned on the policies of all the members. The insurer may, and if a life insurer shall, make a reasonable classification of its policies held by the members, and a formula based upon the classification, for determining the equitable distributive share of each member. The classification and formula is subject to the approval of the director.
(a) A domestic insurer may not make a contract granting a person or permitting a person to enjoy in fact the management of the insurer to the substantial exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, unless the contract is filed with and approved by the director. The contract shall be considered approved unless disapproved by the director within 20 days after date of filing, subject to a reasonable extension of time that the director may require by notice given within the 20 days. A disapproval shall be delivered to the insurer in writing, stating the grounds for it.
(b) The director shall disapprove a contract upon a finding that it
(1) subjects the insurer to excessive charges;
(2) is to extend for an unreasonable length of time;
(3) does not contain fair and adequate standards of performance; or
(4) contains other inequitable provision or provisions that impair the proper interests of stockholders or members of the insurer.
(a) A director of a domestic stock or mutual insurer determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have voted for or concurred in a declaration or payment of a dividend to stockholders or members other than as authorized under AS 21.69.490 or 21.69.500 is subject to a civil penalty of not more than $2,500 and is jointly and severally liable, together with other directors likewise voting for or concurring, for any loss sustained by the insurer.
(b) A stockholder receiving an illegal dividend shall be liable in the amount of it to the insurer.
(c) The director may revoke or suspend the certificate of authority of an insurer that has declared or paid an illegal dividend.
(a) A domestic insurer may not knowingly solicit insurance business in a reciprocating state in which it is not then licensed as an authorized insurer.
(b) This section does not prohibit advertising through publication and radio, television, and other broadcasts originating outside the reciprocating state, if the insurer is licensed in a majority of the states in which the advertising is disseminated, and if the advertising is not specifically directed to residents of the reciprocating state.
(c) This section does not prohibit insurance covering persons or risks located in a reciprocating state under contract solicited and issued in states in which the insurer is then licensed. This section does not prohibit insurance effectuated by the insurer as an unauthorized insurer in accordance with the laws of the reciprocating state.
(d) The director shall suspend or revoke the certificate of authority of a domestic insurer found by the director, after a hearing, to have violated this section.
(e) In this section a 'reciprocating' state is one that imposes a similar prohibition upon insurers domiciled in that state.
(a) A domestic insurer, or insurance holding corporation, or stock corporation for financing operations of a mutual insurer, or attorney in fact corporation of a reciprocal insurer, after (1) it has received a certificate of authority, if an insurer; or (2) it has completed its initial organization and financing if a corporation other than an insurer, may not solicit or receive funds in exchange for a new issue of its corporate securities, other than through a stock dividend, until it has applied to the director for, and has been granted, a solicitation permit.
(b) The director shall issue a permit unless the director finds that
(1) the funds proposed to be secured are excessive in amount for the purpose intended;
(2) the proposed securities or the manner of their distribution are inequitable; or
(3) the issuance of the securities would jeopardize the interests of policyholders or the holders of other securities of the insurer or corporation.
(c) A solicitation permit granted by the director shall be for the duration, and must contain the terms and be issued upon the conditions that the director may reasonably specify or require.
If the board of directors of a domestic insurer has not adopted emergency bylaws, the following provisions become effective upon the occurrence of a national emergency:
(1) Three directors constitute a quorum for the transaction of business at all meetings of the board.
(2) A vacancy in the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.
(3) If there are no surviving directors, but at least three vice presidents of the insurer survive, the three vice presidents with the longest term of service shall be the directors and shall possess all of the powers of the previous board of directors and the powers that are granted herein or by subsequently enacted legislation. By a majority vote the emergency board of directors may elect other directors. If there are not at least three surviving vice presidents, the director of insurance or designated person exercising the powers of director of insurance shall appoint three persons as directors who shall possess all of the powers of the previous board of directors and the powers that are granted herein or by subsequently enacted legislation, and these persons by majority vote may elect other directors.
(a) The corporate charter of a corporation formed under the laws of this state more than three years before July 1, 1966, for the purpose of becoming an insurer, which corporation, within the three-year period, has not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the director under laws then in force, is extinguished and nullified.
(b) The corporate charter of any other corporation formed under the laws of this state for the purpose of becoming an insurer, and which corporation during any period of 36 consecutive months after July 1, 1966, is not actively engaged in business as a domestic insurer under a certificate of authority issued to it by the director under law currently in force, is automatically extinguished and nullified at the expiration of the 36-month period.
(c) The period during which the corporation referred to in (b) of this section is the subject of delinquency proceedings under AS 21.78 shall not be counted as part of the 36-month period.
(d) Upon merger or consolidation of a domestic insurer with another insurer under this chapter, the corporate charter of the merged or consolidated domestic insurer is automatically extinguished and nullified.
(a) If an insurer becomes impaired, the director shall determine the amount of deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of the notice.
(b) The deficiency may be made good in cash or in assets eligible under AS 21.21 for the investment of the insurer's funds; or if a stock insurer, by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only the kind or kinds of insurance thereafter for which the insurer has sufficient surplus under this title.
(c) If the deficiency is not made good and proof filed with the director within the 60-day period, the insurer shall be considered insolvent and the director shall institute delinquency proceedings against it under AS 21.78; except that if the deficiency exists because of increased loss reserves required by the director, or because of disallowance by the director of certain assets or reduction of the value at which carried in the insurer's accounts, the director may, upon application and good cause shown, extend for not more than an additional 60 days the period within which the deficiency may be made good and the proof filed.
Every solicitation permit issued by the director must
(1) be for a period of not over two years, subject to the right of the director to grant a reasonable extension for good cause;
(2) state the securities for which subscriptions are to be solicited, the number, classes, par value, and selling price thereof, or identify the insurance contract for which applications and advance premiums or deposits are to be solicited;
(3) limit the portion of funds received on account of stock or syndicate subscriptions, if any are proposed to be taken, which may be used for promotion and organization expenses to an amount the director considers adequate, but in no event to exceed 15 percent of the funds as and when actually received;
(4) if to be a mutual or reciprocal insurer, limit the portion of funds received on account of applications for insurance that may be used for promotion or organization expenses to a reasonable commission upon the funds, giving consideration to the kind of insurance and policy involved and to the costs incurred by insurers generally in the production of similar business, and provide that no commission shall be considered to be earned or be paid until the insurer has received its certificate of authority and the policies applied for and upon which the commission is to be based, have been actually issued and delivered;
(5) contain other information required by this chapter or reasonable conditions relative to accounting and reports or otherwise that the director considers necessary.
(a) Before soliciting applications for insurance required under AS 21.69.220 as qualification for the original certificate of authority, the incorporators of the proposed insurer shall file with the director a corporate surety bond in the penalty of $20,000, in favor of the state and for the use and benefit of the state and of applicant members and creditors of the corporation. The bond shall be conditioned as follows:
(1) for the prompt return to applicant members of all premiums collected in advance;
(2) for payment of all indebtedness of the corporation;
(3) for payment of costs incurred by the state in event of legal proceedings for liquidation or dissolution of the corporation, all in the event the corporation fails to complete its organization and secure a certificate of authority within one year after the date of its certificate of incorporation.
(b) In lieu of the bond, the incorporators may deposit with the director $20,000 in cash or United States government bonds, negotiable and payable to the bearer, with a market value at all times of not less than $20,000, to be held in trust upon the same conditions as required for the bond.
(c) The bond filed or deposit or remaining portion thereof held under this section shall be released and discharged upon settlement and termination of all liabilities against it.
(a) An officer or director, or a member of a committee or an employee of a domestic insurer who is charged with the duty of investing or handling the insurer's funds may not deposit or invest the funds except in the insurer's corporate name; may not borrow the funds of the insurer; may not be pecuniarily interested in a loan, pledge of deposit, security, investment, sale, purchase, exchange, reinsurance, or other similar transaction or property of the insurer except as a stockholder or member; and may not take or receive to personal use a fee, brokerage, commission, gift, or other consideration for or on account of a transaction made by or on behalf of the insurer.
(b) An insurer may not guarantee a financial obligation of any of its officers or directors.
(c) This section does not prohibit a director or officer, or member of a committee or employee from becoming a policyholder of the insurer and enjoying the usual rights provided for its policyholders.
(d) The director may, by regulations from time to time, define and permit additional exceptions to the prohibition contained in (a) of this section solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer, or to a corporation or firm in which a director is interested, for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of the director or the corporation or firm.
(a) Notwithstanding (b) of this section, a domestic stock insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by a reinsurance agreement. A reinsurance agreement shall be filed with the director within 30 days after all parties have signed the agreement. A reinsurance agreement is designated as confidential for purposes of AS 21.06.060 .
(b) A domestic stock insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by an agreement of assumption reinsurance, but an agreement of assumption reinsurance is not effective unless filed with and approved in writing by the director after a hearing.
(c) The director shall approve the agreement within a reasonable time after the filing unless the director finds that it is inequitable to the stockholders of the domestic insurer or would substantially reduce the protection or service to its policyholders. If the director does not approve the agreement, the director shall notify the insurer in writing specifying the reasons.
(d) This section does not apply to a facultative reinsurance contract. In this subsection, 'facultative reinsurance contract' means an agreement whereby individual risk is offered by an insurer for acceptance or rejection by a reinsurer. Under a facultative reinsurance contract, both parties are free to act in their own best interest, regardless of any prior contractual arrangement.
(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it by this title for authority to transact the kinds of insurance being transacted and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who held policies providing for contingent liability at any time within the 12 months preceding the date notice of the assessment was mailed to them, and the members shall be liable to the insurer for the amount assessed.
(b) The assessment shall be for the amount required to cure the deficiency and to provide a reasonable amount of working funds above the minimum amount of surplus, but the working funds so provided may not exceed five percent of the insurer's liabilities as of the date as on which the amount of the deficiency was determined.
(c) In levying an assessment upon a policy providing for contingent liability, the assessment shall be computed on the basis of the premiums earned on the policy during the period to which the assessment relates.
(d) A member may not have an offset against an assessment for which the member is liable, on account of a claim for unearned premium or loss payable.
(e) As to life insurance, any part of the assessment upon a member that remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in the notice, may, if approved by the director as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.
(a) A domestic mutual insurer may not merge or consolidate with a stock insurer.
(b) A domestic mutual insurer may merge or consolidate with another mutual insurer under the applicable procedures prescribed by the statutes of this state applying to corporations formed for profit, except as provided in this section.
(c) The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer involved and voting in person or by proxy at a meeting called for the purpose after reasonable notice and under procedures that have been approved by the director. If a life insurer, the right to vote may be limited to members whose policies are other than term and group policies and have been in effect for more than one year.
(d) A merger or consolidation may not be effectuated unless the plan and agreement for it have been filed with the director and approved by the director in writing after a hearing. The director shall give the approval within a reasonable time after the filing unless the director finds the plan or agreement
(1) is inequitable to the policyholders of a domestic insurer involved; or
(2) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state and elsewhere.
(e) If the director does not approve the plan or agreement the director shall notify the insurers in writing specifying the reasons.
(f) AS 21.69.590 (e) also applies to mergers and consolidations of mutual insurers.
(a) Except as provided in AS 21.69.230 , the director may not issue a solicitation permit until the person applying for it files with the director a corporate surety bond in the penalty of $10,000, in favor of the state and for the use and benefit of the state and of subscribers and creditors of the proposed organization.
(b) The bond shall be conditioned upon the payment of costs incurred by the state in the event of a legal proceeding for liquidation or dissolution of the proposed organization before completion of organization or if a certificate of authority is not granted; and upon a full accounting for funds received until the proposed insurer has been granted its certificate of authority, or until the proposed corporation or syndicate has completed its organization as defined in the solicitation permit.
(c) In lieu of filing the bond, the person may deposit with the director $10,000 in cash or in United States government bonds at par value, to be held in trust upon the same conditions as required for the bond.
(d) The director may waive the requirement for a bond or deposit in lieu of a bond if the permit provides that
(1) the proposed securities are to be distributed solely and finally to those few persons who are the active promoters intimate to the formation of the insurer, or other corporation or syndicate; or
(2) the securities are to be issued in connection with subsequent financing as provided in AS 21.69.200 .
(e) A bond filed or deposit or remaining portion of a bond held under this section shall be released and discharged upon settlement or termination of all liabilities against it.
(a) An insurer receiving the director's notice mentioned in AS 21.69.530(a)
(1) if a stock insurer, by resolution of its board of directors and subject to limitations upon assessment contained in its articles of incorporation, may assess its stockholders for amounts necessary to cure the deficiency and provide the insurer with a reasonable amount of surplus in addition; if a stockholder fails to pay a lawful assessment after notice given to the stockholder in person or by advertisement in the time and manner approved by the director, the insurer may require the return of the original certificate of stock held by the stockholder, and issue a new certificate for the number of shares the stockholder may then be entitled to, upon the basis of the stockholder's proportionate interest in the amount of the insurer's capital stock as determined by the director to be remaining at the time of determination of amount of impairment under AS 21.69.530 , after deducting from the proportionate interest the amount of the unpaid assessment; the insurer may pay for or reissue fractional shares under this subsection;
(2) if a mutual insurer, shall levy an assessment upon members as provided for under AS 21.69.440 ;
(b) Neither this section nor AS 21.69.530 prohibits the insurer from curing the deficiency through any lawful means other than those referred to in those sections.
(a) Subject to the director's prior written approval, a domestic stock or mutual insurer may borrow money to defray the expenses of its organization or provide it with surplus funds upon a written agreement that the money is required to be repaid only out of the insurer's surplus in excess of that stipulated in the agreement. The agreement may provide for interest not exceeding six percent a year, which interest may or may not constitute a liability of the insurer as to its funds other than the excess of surplus, as stipulated in the agreement. A commission or promotion expense may not be paid in connection with the loan.
(b) Money borrowed, together with the interest, if so stipulated in the agreement, may not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount stipulated in the agreement, or be the basis of any setoff; but until repaid financial statements filed or published by the insurer shall show as a footnote the amount then unpaid together with any interest accrued but unpaid.
(c) The loan to a mutual insurer is subject to the director's approval. The insurer shall, in advance of the loan, file with the director a statement of the purpose of the loan and a copy of the proposed loan agreement. The loan and agreement shall be considered approved unless within 15 days after the date of the filing the insurer is notified of the director's disapproval and the reasons for it. The director shall disapprove a proposed loan or agreement upon a finding that the loan is unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable to the parties, and other similar lenders, if any, to the insurer, or that the information filed by the insurer is inadequate.
(d) This section does not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, or to loans secured by pledge or mortgage of assets.
To apply for a solicitation permit the person shall
(1) file with the director a request showing
(A) the name, type, and purpose of insurer, corporation, or syndicate proposed to be formed;
(B) the names, addresses, and business records of each person associated or to be associated in the formation of the proposed insurer, corporation, or syndicate;
(C) the full disclosure of the terms of all understandings and agreements existing or proposed among persons so associated relative to the proposed insurer, corporation, or syndicate, or its formation;
(D) the plan according to which solicitations are to be made;
(E) additional information that the director may reasonably require;
(2) file with the director
(A) the original and copies in triplicate of the proposed articles of incorporation or syndicate agreement; or, if the proposed insurer is a reciprocal, original and duplicate of the proposed subscriber's agreement and attorney in fact agreement;
(B) the original and duplicate copy of proposed bylaws;
(C) a copy of the security proposed to be issued and copy of the application or subscription agreement therefor;
(D) a copy of the insurance contract proposed to be offered and copy of the application therefor;
(E) a copy of the prospectus, advertising, or literature proposed to be used;
(F) a copy of the proposed form of escrow agreement required;
(3) deposit with the director the fees required by law to be paid for the application, for filing of the articles of incorporation of an insurer, for filing the subscribers' agreement and attorney in fact agreement if the proposed insurer is a reciprocal, for the solicitation permit, if granted, and for filing articles of incorporation with the commissioner.
(a) Upon receipt of the director's approval of the bond or deposit as provided in AS 21.69.230 , the directors and officers of the proposed domestic mutual insurer may commence solicitation of the requisite applications for insurance policies which they may accept, and may receive deposits of premiums on them.
(b) The applications must be in writing signed by the applicant, covering subjects of insurance resident, located, or to be performed in this state.
(c) The applications must provide that
(1) issuance of the policy is contingent upon the insurer qualifying for and receiving a certificate of authority;
(2) no insurance is in effect unless and until the certificate of authority has been issued;
(3) the prepaid premium or deposit, and membership or policy fee, if any, shall be refunded in full to the applicant if organization is not completed and the certificate of authority is not issued and received by the insurer before a specified reasonable date which date shall be not later than one year after the date of the certificate of incorporation.
(d) All qualifying premiums collected shall be in cash.
(e) Solicitation for qualifying applicants for insurance shall be by licensed agents of the corporation, and the director shall, upon the corporation's application, issue temporary agent's licenses expiring on the date specified under (c)(3) of this section to individuals qualified for a resident agent's license except as to the taking or passing of an examination. The director may suspend or revoke a license for any of the causes and under the same procedures applicable to suspension or revocation of licenses of agents in general under AS 21.27.
(a) The incorporators of a proposed domestic insurer shall deliver the triplicate originals of the articles of incorporation to the director together with the filing fees set under AS 21.06.250 .
(b) When the articles of incorporation have been approved by the director, the director shall endorse the approval upon each set of the articles; except, that if the director finds that the proposed insurer would not be eligible for a certificate of authority under AS 21.09.100, the director shall refuse to approve the articles of incorporation, and shall return them to the proposed incorporators together with a written statement of the reasons for the refusal. If approved by the director, the director shall then forward the articles of incorporation, endorsed with the approval, to the incorporators. The incorporators shall immediately file one set of the articles of incorporation with the commissioner of commerce, community, and economic development, one set with the director bearing the certification of the commissioner, and the remaining set of articles shall be made a part of the corporation's record.
(c) If the director finds that the proposed articles of incorporation do not comply with law, the director shall refuse to approve them, and shall return the triplicate sets to the incorporators, together with a written statement of the reasons for the refusal to approve.
(d) The corporation shall have legal existence upon the issuance of the certificate of incorporation by the commissioner and the completion of the filings referred to in (b) of this section, but it may not transact business as an insurer until it has qualified for and received from the director a certificate of authority as provided in this title.
(e) A copy of the certificate of incorporation, certified by the commissioner, shall be admissible in all the courts of this state as prima facie evidence of incorporation.
(a) A stock insurer other than a title insurer may become a mutual insurer under the plan and procedure that may be approved by the director after a hearing.
(b) The director may not approve a plan, procedure, or mutualization unless
(1) it is equitable to stockholders and policyholders;
(2) it is subject to approval by the holders of not less than three-fourths of the insurer's outstanding capital stock having voting rights and by not less than two-thirds of the insurer's policyholders who vote on the plan in person, by proxy, or by mail under the notice and procedure which may be approved by the director;
(3) if a life insurer, the right to vote on it is limited to holders of policies other than term or group policies, and whose policies have been in force for more than one year;
(4) mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value as determined by competent disinterested appraisers;
(5) the plan provides for the purchase of the shares of a nonconsenting stockholder in the same manner and subject to the same applicable conditions as provided by the general corporation law of the state, as to rights of nonconsenting stockholders, with respect to consolidation or merger of private corporations;
(6) the plan provides for definite conditions to be fulfilled by a designated early date upon which the mutualization will be considered effective;
(7) the mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to enable it to continue successfully in business in the state in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificates of authority in those states.
(c) This section does not apply to mutualization ordered by a court to rehabilitate or reorganize an insurer under AS 21.78.
(a) A domestic mutual insurer shall have bylaws for the governing of its affairs. The initial board of directors of the insurer shall adopt original bylaws, subject to the approval of the insurer's members at the next succeeding meeting. The members shall have power to make, modify, and revoke bylaws.
(b) The bylaws must provide
(1) that each member is entitled to one vote upon each matter coming to a vote at meetings of members; or to more votes in accordance with a reasonable classification of members as set out in the bylaws and based upon the amount of insurance in force, number of policies held, or upon the amount of the premiums paid by the member, or upon other reasonable factors; a member shall have the right to vote in person or by a written proxy; a proxy may not be made irrevocable or for longer than a reasonable period of time;
(2) for election of directors by the members; and the number, qualifications, terms of office, and powers of directors;
(3) the time, notice, quorum, and conduct of annual and special meetings of members and voting at meetings; the bylaws may provide that the annual meeting shall be held at a place, date, and time to be set out in the policy and without giving other notice of the meeting;
(4) the number, designation, election, terms, and powers and duties of the respective corporate officers;
(5) for deposit, custody, disbursement, and accounting as to corporate funds;
(6) for other reasonable provisions customary, necessary, or convenient for the management or regulation of its corporate affairs.
(c) A provision in the bylaws for determining a quorum of members at a meeting of less than a majority of all the insurer's members is not effective unless approved by the director. This subsection does not affect any other provision of law requiring a vote of a larger percentage of members for a specified purpose.
(d) The insurer shall promptly file with the director a copy, certified by the insurer's secretary, of its bylaws and of every modification or addition. The director shall disapprove a bylaw provision considered by the director to be unlawful, unreasonable, inadequate, unfair, or detrimental to the proper interests or protection of the insurer's members or a class of them. The insurer may not, after receiving written notice of the disapproval and during the existence thereof, effectuate the disapproved bylaw provision.
(a) A domestic stock insurer may merge or consolidate with one or more domestic or foreign stock insurers authorized to transact insurance in this state, by complying with the applicable provisions of the statutes of this state governing the merger or consolidation of stock corporations formed for profit, but subject to (b) and (c) of this section.
(b) A merger or consolidation may not be effectuated unless the plan and agreement for it have been filed with the director and approved in writing by the director after a hearing. The director shall give approval within a reasonable time after the filing unless the director finds the plan or agreement
(1) is contrary to law;
(2) inequitable to the stockholders of a domestic insurer involved; or
(3) would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in this state or elsewhere.
(c) A director, officer, agent, or employee of an insurer party to the merger or consolidation may not receive a fee, commission, compensation, or other valuable consideration for aiding, promoting, or assisting therein except as set out in the plan or agreement.
(d) If the director does not approve the plan or agreement the director shall so notify the insurer in writing specifying the reasons.
(e) If a domestic insurer involved in the proposed merger or consolidation is authorized to transact insurance also in other states, the director may request the insurance commissioner, director of insurance, superintendent of insurance, or other similar public insurance supervisory official of the two other states in which the insurer has in force the larger amounts of insurance, to participate in the hearing provided for under (b) of this section, with full right to examine all witnesses and evidence and to offer to the director the pertinent information and suggestions they consider proper.
(f) A plan or proposal through which a stock insurer proposes to acquire a controlling stock interest in another stock insurer through an exchange of stock of the first insurer, issued by the insurer for the purpose, for the controlling stock of the second insurer, is considered to be a plan or proposal of merger of the second insurer into the first insurer for the purposes of this section and is subject to the applicable provisions hereof.
(a) A domestic mutual insurer may reinsure a portion or all of its business in force or a portion or all of a major class of its business with another insurer, stock or mutual, by a reinsurance agreement. A reinsurance agreement shall be filed with the director within 30 days after all parties have signed the agreement. The agreement filed with the director is designated as confidential for the purposes of AS 21.06.060. A domestic mutual insurer may reinsure a portion or all of its insurance in force or a major class of its insurance with another insurer by an agreement of assumption reinsurance. An agreement of assumption reinsurance is not effective unless filed with and approved in writing by the director after a hearing.
(b) The director shall approve the agreement within a reasonable time after filing if the director finds it to be fair and equitable to each domestic insurer involved, and that the reinsurance, if effectuated, would not substantially reduce the protection or service to its policyholders. If the director does not approve, the director shall notify each insurer involved in writing specifying the reasons.
(c) The plan and agreement for the reinsurance must be approved by a vote of not less than two-thirds of each domestic mutual insurer's members voting on the plan or agreement at meetings of members called for the purpose, after reasonable notice and under procedures that the director may approve. If a life insurer, the right to vote may be limited to members whose policies are other than term or group policies, and have been in effect for more than one year.
(d) If the agreement is for reinsurance in a stock insurer of all or substantially all of the insurance in force of a mutual insurer, the agreement must provide for payment in cash to each member of the insurer entitled thereto of the member's equity in the business reinsured as determined under a fair formula approved by the director, as based upon the reserves, assets, whether or not 'admitted' assets, and surplus, if any, of the mutual insurer to be taken over by the stock insurer.
(e) A director, officer, agent, or employee of an insurer party to the reinsurance, or any other person, may not receive a fee, commission, or other valuable consideration for aiding, promoting, or assisting therein except as set out in the reinsurance agreement.
(a) A domestic stock insurer may amend its articles of incorporation for any lawful purpose by written authorization of the holders of a majority of the voting power of its outstanding capital stock or by affirmative vote of a majority voting at a lawful meeting of stockholders of which the notice given to stockholders included due notice of the proposal to amend.
(b) A domestic mutual insurer formed after July 1, 1966, may amend its articles of incorporation for any lawful purpose by affirmative vote of a majority of those of its members present or represented by proxy at a lawful meeting of its members of which the notice given members included notice of the proposal to amend.
(c) Upon adoption of an amendment the insurer shall make in triplicate under its corporate seal a certificate, sometimes referred to as 'articles of amendment,' setting out the amendment and the date and manner of its adoption, which certificate shall be executed by the insurer's president or vice-president and secretary or assistant secretary and acknowledged by them before an officer authorized by law to take acknowledgements of deeds. The insurer shall deliver to the director the triplicate originals of the certificate, together with a filing fee set under AS 21.06.250 . If the director finds that the certificate and amendments comply with law, the director shall endorse approval upon each of the triplicate originals and return them to the insurer. The insurer shall immediately file one set of the endorsed articles of amendment with the commissioner of commerce, community, and economic development, one set with the director bearing the certification of the commissioner, and retain the remaining set in the corporate records. The amendment shall be effective when the filings have been completed.
(d) If the director finds that the proposed amendment or certificate does not comply with the law, the director shall not approve it, and shall return the triplicate certificate of amendment to the insurer together with a written statement of reasons for nonapproval. The filing fee is not returnable.
(e) If an amendment of articles of incorporation would reduce the authorized capital stock of a stock insurer below the amount then outstanding, the director may not approve the amendment if there is reason to believe that the interests of policyholders or creditors of the insurer would be materially prejudiced by the reduction. If a reduction of capital stock is effectuated the insurer may require return of the original certificates of stock held by each stockholder for exchange for new certificates for the number of shares the stockholder is then entitled to in the proportion that the reduced capital bears to the amount of capital stock outstanding as of immediately before the effective date of the reduction.
(a) Meetings of stockholders or members of a domestic insurer shall be held in the city or town of its principal office or place of business in this state. The meetings may be held, for good cause, in another location within the state upon approval of the director.
(b) A meeting of stockholders or members may not amend the insurer's articles of incorporation unless the proposal to amend was included in the notice of the meeting.
(c) Each insurer shall, during the first six months of each calendar year, hold the 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 other business which may properly be brought before it. No less than 20 days' notice shall be given of the meeting in the manner provided in the bylaws, except where notice of the annual meeting of a mutual insurer is contained in its policies.
(d) 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 10 days' notice as provided in the bylaws. The notice shall state the purpose of the meeting, and no business may be transacted at the meeting if notice was not given.
(e) If more than 15 months are allowed to elapse without an annual stockholders' or members' meeting being held, a stockholder or member may call a meeting to be held. At any time, upon written request of a director, or of 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 stockholders or members to be held at the time the secretary may fix, not less than 10 or more than 30 days after the receipt of the request. If the secretary fails to issue the call, the director, stockholders, or members making the request may do so.
(f) A stockholders' or members' meeting can be organized for the transaction of business whenever a quorum is present. Except as otherwise provided by law or the articles of incorporation,
(1) the presence, in person or by proxy, of the holders of a majority of the voting power of all stockholders or of all members constitutes a quorum;
(2) the stockholders or members present at a meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders or members to leave less than a quorum;
(3) if a necessary officer fails to attend the meeting, a stockholder or member present may be elected to act temporarily in lieu of the absent officer;
(4) if a meeting cannot be organized because a quorum has not attended, those present may adjourn the meeting to a time they may determine, but if a meeting was called for the election of a director the adjournment must be to the next day. Those who attend the second of the adjourned meetings, although less than a quorum, constitute a quorum for the purpose of electing a director;
(5) an annual or special meeting of stockholders or members may be adjourned to another date without new notice being given.
(a) This section applies to stock and mutual insurers incorporated in this state after July 1, 1966.
(b) Five or more individuals, none of whom are less than 21 years of age, may incorporate a stock insurer; 10 or more individuals may incorporate a mutual insurer. At least 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 execute articles of incorporation in triplicate and acknowledge their execution in the same manner as provided by law for the acknowledgment of deeds. The articles of incorporation must state the purpose for which the corporation is formed and must show
(1) the name of the corporation; if a mutual, the word 'mutual' must be a part of the name; an alternative name or names may be specified for use in jurisdictions in which conflict of name with that of another insurer or organization might otherwise prevent the corporation from being authorized to transact insurance therein;
(2) the duration of its existence, which may be perpetual;
(3) the kinds of insurance, as defined in this title, that the corporation is formed to transact;
(4) if a stock corporation, its authorized capital stock, the number of shares of common stock into which divided, the par value of each share, which par value shall be at least $1; shares without par value, or other than one class of voting common stock, may not be authorized; the articles of incorporation may limit or deny present or future stockholders pre-emptive or preferential rights to acquire additional issues of the stock, or bonds, debentures, or other obligations convertible into stock, of the corporation, subject to the laws of this state fixing the required representation and proportion of outstanding capital stock required to be represented and voted, for specified action, at any and all corporate meetings, elections, votes, or consent proceedings;
(5) if a stock corporation, the extent, if any, to which shares of its stock are subject to assessment;
(6) if a stock corporation, the number of shares subscribed, if any, by each incorporator;
(7) if a mutual corporation, the maximum contingent liability of its members, other than as to nonassessable policies, for payment of loses and expenses incurred; the liability shall be stated in the articles of incorporation, but may not be less than one or more than six times the premium for the member's policy at the annual premium rate for a term of one year;
(8) the minimum, not less than five, and the maximum, not more than 21, number of directors who constitute the board of directors and conduct the affairs of the corporation; also, the names, addresses and terms of the members of the initial board of directors; the term of office of initial directors shall be for not more than one year after the date of incorporation;
(9) the judicial district or other political subdivision within the judicial district, in which its principal office or principal place of business is to be located in this state;
(10) other provisions, not inconsistent with law, considered appropriate by the incorporators;
(11) the name and residence address of each incorporator, and the citizenship of each incorporator who is not a citizen of the United States.
(a) An insurer organized under the laws of another state and admitted to do business in this state may become a domestic insurer of this state by complying with the requirements of this title relative to the organization and licensing of a domestic insurer and by designating its principal place of business at a place in this state.
(b) A domestic insurer may, upon approval of the director, transfer its domicile to another state in which it is admitted to transact the business of insurance. Upon a transfer as described in this subsection, the insurer shall cease to be a domestic insurer of this state but shall be considered admitted to this state. The insurer shall meet the qualifications to remain admitted to this state for a period of three years or, if ordered by the director, a longer period. The director may approve a proposed transfer unless the transfer is not in the interest of the policyholders of the insurer or the insurance marketplace of this state.
(c) Upon transfer of domestic status to or from this state, the certificate of authority, appointments under AS 21.27.100 , rates, and other items that the director allows, and that are in existence at the time the insurer is licensed to transact the business of insurance in this state, shall continue in full force and effect and the insurer shall remain duly qualified to transact the business of insurance in this state. Outstanding policies of a transferring insurer shall remain in full force and effect and shall be endorsed with the new name of the company, its new location, and any other information the director may require. A transferring insurer shall notify the director of the details of the proposed transfer 30 days before the effective date of the transfer and shall promptly file any resulting amendments to corporate documents filed or required to be filed with the director.
(d) A transfer of domestic status by merger, consolidation, or any other lawful method of combination must meet the requirements of AS 21.69.590 or 21.69.600. The certificate of authority, appointments under AS 21.27.100 , rates, and other items that the director allows, and that are in existence at the time the insurer is licensed to transact the business of insurance in this state, shall continue in full force and effect, and the insurer shall remain duly qualified to transact the business of insurance in this state. Outstanding policies of a domestic insurer being merged, consolidated, or otherwise combined shall remain in full force and effect, and shall be endorsed with the new name of the company, its new location, and any other information the director may require.
(e) An insurer that is transferring its domicile to this state shall file its revised policy forms for approval under AS 21.42.
(f) A domestic insurer that is transferring its domicile to another state is not required to file policy forms at the time of transfer if the forms have already been approved under AS 21.42.
(a) Each domestic insurer shall have and maintain a place of business in this state, and shall keep in this state and in its principal place of business a complete record of its assets, transactions, and affairs in accordance with the methods and systems that are customary or suitable as to the kind or kinds of insurance transacted.
(b) A person determined by the director, following an appropriate hearing as provided in AS 21.06.170 - 21.06.230, to have removed or attempted to remove any records from the place where they are required to be kept under (a) or (d) of this section with the intent to wrongfully remove them, or to have concealed or attempted to conceal them from the director, is subject to a civil penalty of not more than $25,000. If a domestic insurer violates a provision of this section the director may institute delinquency proceedings against the insurer under the provisions of AS 21.78.
(c) [Repealed, Sec. 42 ch 14 SLA 1987].
(d) To meet the requirements of (a) of this section, a domestic insurer shall keep at its principal place of business in the state the following records of assets, transactions, and affairs:
(1) a general ledger;
(2) copies of reports prepared to comply with AS 21.09.200 - 21.09.210;
(3) if prepared in the normal course of business, financial statements prepared under generally accepted accounting principles on which a licensed certified public accountant has expressed an opinion;
(4) filings made by a domestic insurer or affiliates of the domestic insurer with a government agency with which a domestic insurer or affiliates of the domestic insurer's securities may be registered;
(5) a state certificate of authority;
(6) filings made under AS 21.21;
(7) original policy and claim files for insurance of property or a risk resident or located in the state;
(8) a corporate minutes book;
(9) articles of incorporation;
(10) corporate bylaws;
(11) contracts; and
(12) other records required by the director by regulation.
(e) A domestic insurer may change the place of business or the location of records with the written approval of the director. The domestic insurer must submit a list of the records and the locations of the records that will be maintained outside of this state when requesting approval. Any change in place of business, the approved list of records, and the location of the records maintained outside of this state shall be submitted 60 days before relocation and is considered approved if not disapproved by the director within 30 days after receipt. The director shall approve the change in place of business or location of records outside of this state subject to the following standards:
(1) the place of business is readily accessible by the general public by visit and telephone;
(2) the records are immediately available to examiners representing the director in an examination;
(3) the domestic insurer agrees to ship the records to the state if the insurer is ordered to do so under AS 21.78;
(4) the location of the place of business and records outside of the state has a valid business purpose that is not satisfied by maintaining a place of business or the records in the state;
(5) the list of records and location is of sufficient detail to readily locate specific records.
(a) When newly organized, a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in (b) of this section.
(b) When applying for an original certificate of authority, the insurer must be otherwise qualified under this title, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted, must have collected in cash the full premium at a rate not less than that usually charged by stock insurers for comparable coverages, must have surplus funds on hand and deposited as of the date the insurance coverages are to become effective, or, in lieu of the applications, premiums, and surplus, may deposit surplus, all in accordance with that part of the following schedule that applies to the one kind of insurance the insurer proposes to transact:
-------------------------------------------------------------
-------------------------------------------------------------
(A) (B) (C) (D)
Minimum No. Minimum No.
of of Minimum
Kind of Applicants Subjects Premium
Insurance Accepted Covered Collected
-------------------------------------------------------------
-------------------------------------------------------------
Life (1) 500 500 annual
Health (2) 500 500 quarterly
Property (3) 100 250 annual
Casualty (4) 250 500 annual
With Workers'
Compensation 250 1,500 quarterly
Marine, Wet
Marine, and
Transportation 50 50 annual
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(E) (F) (G) (H)
Maximum
Minimum Amount of Minimum
Amount of Insurance Surplus Deposit
Insurance Each Funds of Surplus
Each Subject Deposited in Lieu of
Subject (5) (6) (6)
-------------------------------------------------------------
-------------------------------------------------------------
$1,000 $ 2,500 $ 800,000 $ 800,000
$ 10 $ 25 $ 800,000 $ 800,000
(weekly (weekly
indem.) indem.)
$1,000 $ 3,000 $ 600,000 $ 600,000
$1,000 $10,000 $1,000,000 $1,000,000
$1,000 $10,000 $1,000,000 $1,000,000
$1,000 $25,000 $1,000,000 $1,000,000
(c) The following provisos are respectively applicable to the schedule in (b) of this section and provisions as indicated by like numerals appearing in the schedule:
(1) group insurance or term policies for terms of less than 10 years may not be included;
(2) group, blanket, or family plans of insurance may not be included; in lieu of weekly indemnity a like premium value in medical, surgical and hospital benefits may be provided; any accidental death or dismemberment benefit provided may not exceed $2,500;
(3) only insurance of the owner's interest in real property may be included;
(4) must include insurance of legal liability for bodily injury and property damage, to which the maximum and minimum insured amounts apply;
(5) the maximums provided for in column (F) are net of applicable reinsurance;
(6) the deposit of surplus in the amount specified in columns (G) and (H) must thereafter be maintained unimpaired; the deposit is subject to the provisions of AS 21.24.
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