Section 611.16. Termination of organization permit and payment of organization expenses.

 

(1)   Termination. The organization permit shall terminate upon:

(a) Issuance of a certificate of authority under s. 611.20 ;

(b) Revocation under sub. (2) ; or

(c) Expiration of one year after issuance unless a good faith application for a certificate of authority has been filed with the commissioner. The commissioner may grant a reasonable extension if the commissioner reasonably expects that the corporation will be able to satisfy the requirements for a certificate of authority within the extended period.

(2)   Revocation. The commissioner may revoke an organization permit if:

(a) The commissioner finds, after a hearing, that because of changes in circumstances, or because the facts were not as represented in the application, the conditions for issuance of a permit are no longer satisfied; or

(b) The commissioner denies an application for a certificate of authority and finds that the corporation cannot reasonably be expected to satisfy the requirements for a certificate of authority within the remaining term of the organization permit or any extension thereof under sub. (1) (c) .

(3)   Reimbursements and refunds.

(a) General. Except in cases under pars. (b) and (c) , if the organization permit is revoked or expires before a certificate of authority is granted, incorporators who have advanced money for the reasonable and authorized expenses of organization, including underwriting expenses, may be reimbursed in cash from the proceeds of shares or mutual bond or contribution note subscriptions under the organization permit, on itemized receipts audited by the commissioner. The total reimbursement shall not exceed 5 percent of the amount received from such sources. The remainder in the escrow account shall thereupon be distributed among such subscribers in proportion to their contributions, valued as of the time the contributions were made.

(b) Violation of law. Reimbursement may be refused to any incorporator under par. (a) if the commissioner finds that in connection with the organization of the corporation the incorporator has willfully or negligently violated in a material way any provision of this chapter.

(c) Assessable mutuals. No reimbursement may be made to any incorporator of a mutual under par. (a) until all advanced premiums collected under s. 611.19 (4) (c) have been repaid in full.

(4)   End of legal existence. The legal existence of the corporation shall terminate upon completion of the payments under sub. (3) .

1971 c. 260 , 307 ; 1991 a. 316 .