Section 611.51. Board of directors.

 

(1)   General. Subject to this section, ss. 180.0801 and 180.0802 apply to stock corporations and ss. 181.0801 (1) and (2) and 181.0802 apply to mutuals.

(2)   Number of directors.

(a) General. Except under pars. (b) and (c) , a corporation shall have at least 5 directors if no more than one director is an employee or representative of the corporation, and shall have at least 9 directors in other cases.

(b) New corporations. During the first 5 years after initial issuance of a certificate of authority, a corporation shall have at least 5 directors.

(c) Exception. The commissioner may by order reduce the number of directors required under this subsection, if he or she finds that it would be an unreasonable burden on the corporation to comply with the requirement and that the interests of policyholders and shareholders can be otherwise protected.

(3)   Inside directors. Employees and representatives of a corporation may not constitute a majority of its board.

(4)   Subsidiaries and closely held corporations. Subsections (2) (a) and (3) do not apply to an insurance subsidiary authorized under s. 611.26 (1) nor to a stock insurance corporation more than 95 percent of whose outstanding shares entitled to vote are owned by a single person or all of whose voting shareholders are either members of or are individually represented on the board.

(5)   Classification of directors. If directors are divided into classes by the articles or the bylaws, no class may contain fewer than 3 members. Subject thereto, s. 180.0806 applies to stock corporations.

(6)   Unlawful delegation. The board shall manage the business and affairs of the corporation and may not delegate its power or responsibility to do so, except to the extent authorized by ss. 180.0841 , 181.0841 , 611.56 and 611.67 .

(7)   Quorum and voting. Section 180.0824 applies to the board of a stock corporation and s. 181.0824 applies to the board of a mutual except as modified by s. 611.60 .

(8)   Place and notice of directors' meetings. Sections 180.0820 , 180.0822 and 180.0823 apply to stock corporations. Sections 181.0820 , 181.0822 and 181.0823 apply to mutuals.

(9)   Books and records.

(a) Stock corporations. Sections 180.1601 to 180.1620 apply to stock corporations.

(am) Mutuals.

1. Each mutual shall keep correct and complete books and records of account and shall also keep minutes of the proceedings of its policyholders, board of directors and committees having any authority of the board of directors. Each mutual shall keep at its principal office or at the office of its secretary a record giving the names and addresses of policyholders entitled to vote, or records showing where such information can be obtained.

2. Except for the records of the names and addresses of policyholders entitled to vote, all relevant books and records of a mutual may be inspected by any policyholder or the policyholder's agent or attorney for any proper purpose at any reasonable time. Inspection of the records of the names and addresses of policyholders of mutuals entitled to vote shall be permitted only for the purpose of communicating with other policyholders with regard to the nomination and election of candidates for the board or other corporate matters which may be submitted to a vote of the policyholders. No person may, directly or indirectly, use any information so obtained for any other purpose.

3. In any pending action or proceeding, or upon petition, a court of record in this state may, upon notice fixed by the court, hearing and a showing of proper cause, and upon suitable terms, order any books and records of account, minutes and records of policyholders of a mutual and any other pertinent documents in the mutual's possession, or transcripts from or duly authenticated copies thereof, to be brought within this state and kept at such place and for such time and for such purposes as may be designated in the order. A mutual failing to comply with an order under this subdivision is subject to involuntary dissolution under this chapter and all of its directors and officers may be punished for contempt of court for disobedience of the order.

(b) Form of books, records or minutes. Any books, records or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.

(c) Records of policyholders entitled to vote. Any provision of this chapter or of any articles or bylaws of a mutual, which requires the keeping of records concerning the names and addresses of policyholders entitled to vote shall be deemed to be complied with by the keeping of a record of the names of policyholders and the names and addresses of insureds or persons paying premiums. Any such provision which requires the mailing or sending of notices, reports, proposals, ballots or other materials to policyholders shall be deemed to be complied with if mailing thereof is made to the insured or the person paying premiums on the policy for delivery to the policyholder.

1971 c. 260 ; 1975 c. 373 ; 1979 c. 102 ss. 99 , 236 (5) ; 1983 a. 321 s. 5 ; 1989 a. 303 , 308 , 359 ; 1991 a. 16 ; 1997 a. 35 , 79 . Legislative Council Note to (2) (a), 1975: This amendment accommodates the needs of small corporations while continuing to satisfy the purposes for having large boards, as explained in the note to s. 611.51 (2) (a) in chapter 260, laws of 1971 . [Bill 643-S]