§ 4210 — Election of directors of domestic mutual life insurance companies

New York § 4210

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 42: Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies

Text

§ 4210. Election of directors of domestic mutual life insurance\ncompanies. (a) (1) The directors of every domestic mutual life insurance\ncompany shall be elected in the manner and subject to the regulations\nprescribed in this section.\n (2) Every such company shall, in accordance with its charter, either\nelect its entire board of directors biennially, or divide its board of\ndirectors into not more than three classes, as nearly equal as may be,\nin which case the members of one class only shall be elected annually.\n (3) In this section:\n (A) "Policyholder" means the person insured under an individual policy\nof life insurance or of accident and health insurance issued upon the\napplication of such person, the person who effectuates any such policy\nupon the person of another pursuant to subsection (c) of section three\nthousand two hundred five of this chapter, the person to whom any\nannuity or pure endowment is presently or prospectively payable by the\nterms of an individual annuity or a pure endowment contract, except\nwhere the policy or contract declares some other person to be the owner\nor holder thereof, in which case such owner or policyholder shall be\ndeemed the policyholder, and except in cases of assignment as\nhereinafter provided. In the case of any such individual policy or\ncontract insuring two or more persons jointly the persons insured, or,\nif any such policy be issued upon the application of some third person\nor persons, the person or persons who effectuated any such policy\npursuant to subsection (c) of section three thousand two hundred five of\nthis chapter shall be deemed one policyholder within the meaning of this\nsection. In case any such policy or contract shall have been assigned by\nan assignment absolute on its face, to an assignee other than the\ncompany which shall have issued such policy, and in case the signature\nof such assignee, either attested by the assignor or acknowledged by the\nassignee, shall have been more than six months prior to any election\nhereinafter referred to, filed at the principal office of such company,\nthen such assignee shall be deemed a policyholder within the meaning of\nthis section. In the case of every policy or contract of group insurance\nor group annuity contract, issued by such company, the employer, or\nother person, firm, corporation or association to whom or in whose name\nthe master policy shall have been issued and held, shall be deemed one\npolicyholder within the meaning of this section. Whenever in this\nsection reference is made to a policy of life insurance for one thousand\ndollars or more, such reference shall be deemed to include, as\nequivalent thereto, an annuity contract which at normal date of maturity\nrequires the payment of one hundred dollars or more annually, and a pure\nendowment contract for the principal sum of one thousand dollars or\nmore.\n (B) "Acknowledged", when used in reference to any instrument or\nsignature, shall have the same meaning which it has in reference to\nconveyances of real property eligible for recording under section two\nhundred ninety-one of the real property law.\n (b) (1) Every participating policyholder of such company and every\npolicyholder of such company whose policy or contract is a\nnon-participating policy or contract described in the first sentence of\nparagraph one of subsection (e) of section four thousand two hundred\nthirty-one of this article, or a variable annuity contract subject to\nparagraph one of subsection (d) of section four thousand two hundred\nforty of this article and whose policy or contract shall be in force and\nshall have been in force for at least one year prior to any such\nelection shall be entitled, without further qualification, to vote\nthereat, either in person or by mail or by proxy, as hereinafter\nprovided, except that any company may adopt a resolution amending its\ncharter or by-laws so as to provide that all voting by policyholders for\ndirectors shall be by ballot alone and not by proxy. In the event any\ncompany adopts such an amendment, all mention of proxy or proxies or of\npersons to receive proxies in this section, shall not apply to such\ncompany and such company shall conduct its elections only by means of\nballots as long as such amendment is in effect. Any such company may,\nupon the approval of the superintendent, confer, upon all or any class\nof its non-participating policyholders holding a policy or contract\nissued pursuant to the special permit granted by the superintendent in\naccordance with paragraph one of subsection (e) of section four thousand\ntwo hundred thirty-one of this article, the same rights to vote for\ndirectors possessed by its participating policyholders. The\nsuperintendent may give such approval if he finds that the proposed\nchange is in conformity with the requirements of law and that the\nrepresentation of the policyholders therein conferred is equitable and\nreasonable.\n (2) Every other person having a right to vote in any such election by\nvirtue of any contract which was made prior to April twenty-seventh,\nnineteen hundred six, and which shall be in force at the time of such\nelection, shall be entitled to vote thereat in similar manner.\n (3) In any election of directors of a domestic mutual life insurance\ncompany pursuant to the provisions of this section, every policyholder\nshall be entitled to one vote only, irrespective of the number of\npolicies or contracts held by him and of the amount thereof.\n (c) (1) Not less than five months nor more than eight months prior to\nany such election, on request of not less than twenty-five policyholders\nentitled to vote at the last prior election, which request must be\nsubscribed and affirmed as true under the penalties of perjury by each\nof such policyholders and must be filed in duplicate with such company\nat least five days before any hearing thereon, the superintendent, after\nnotice of not less than five days to such company and a hearing thereon,\nmay in his discretion order such company within a period of not more\nthan forty-five days and not less than thirty days thereafter, to file\nin his office, or in some suitable place designated by him and under his\ncustody, a full and correct copy of its list or card catalogue of the\nnames and last known postoffice addresses of all policyholders who have\nbeen such for at least six months under a policy of life insurance for\none thousand dollars or more, or to file any part of such list or card\ncatalogue as the superintendent specifies.\n (2) A list or any part thereof which may be so ordered filed pursuant\nto paragraph one hereof shall be arranged, classified and corrected as\ndirected by the superintendent; and if one or more independent\nnominations are made, as specified in subsection (h) hereof, then such\nelection shall be deemed a contested election and a complete list or\ncard catalogue of names of all policyholders who are eligible to vote,\nas defined in this section, under a policy of life insurance for one\nthousand dollars or more shall be so filed within forty-five days after\nthe copy of the certificate of such nominations, certified by the\nsuperintendent shall have been filed at the home office of such company,\nand such list or card catalogue shall be corrected from the records of\nsuch home office so that a list or card catalogue, as nearly correct as\nmay be, shall be on file as aforesaid down to within three months of\nsuch election.\n (d) (1) Such list or card catalogue or any part thereof so filed,\nwhile in the custody of the superintendent, shall be subject to\ninspection, under regulations prescribed by him, at any time during\nbusiness hours by any policyholder of such company or by his authorized\nrepresentative, and in case of a contested election, under regulations\nto be prescribed by the superintendent, may be used in the canvass of\nthe policyholders of the company.\n (2) After such election, or, if no independent nomination has been\nmade, then after the time for such independent nominations has expired,\nsuch list or card catalogue shall be returned to the company filing the\nsame.\n (e) If all or any class of the policyholders of any domestic stock\nlife insurance company shall be entitled to vote at any election of the\ndirectors of such company, such policyholders, subject to the provisions\nof the company's charter, shall be entitled to vote in person, by proxy\nor by mail, as herein provided, and under the conditions stated in\nsubsection (c) hereof, a similar list or card catalogue of\npolicyholders, qualified to vote, in accordance with the charter or\nby-laws of such corporation, except the holders of industrial policies,\nshall be filed and maintained in the office of the superintendent, or in\nsome suitable place designated by him and under his custody, and at the\nhome office of such company, respectively, similarly arranged and\nsimilarly subject to inspection and copy and withdrawal as in the case\nof mutual life insurance companies as above provided.\n (f) Where policyholders in any company shall have made nominations as\nhereinafter prescribed, they or a committee representing them, shall\nupon demand, and with the approval of the superintendent and the payment\nto the company of the actual cost of making such copies, be furnished by\nsuch company with a copy of such list of policyholders or with a copy\ntherefrom of the policyholders residing in a designated territory. A\ncopy of a list so taken, or of any part thereof, shall be held by\npersons receiving the same inviolate and solely for the purposes of said\nnominators in a pending election and shall not be transmitted to other\npersons for any other use whatever. At the close of the canvass of the\nvotes all copies of such lists shall be returned to the company.\n (g) At least seven months prior to the date of any election of\ndirectors in any such company, the board of directors shall nominate\ncandidates for every vacancy to be filled at such election and shall\nalso appoint three persons, jointly or severally, to receive proxies to\nbe voted for said nominees, and shall also file in duplicate with the\nsuperintendent and at its home office a certificate of the names of the\ncandidates so nominated and of the persons so designated to receive said\nproxies, which shall be described as the "administration ticket."\n (h) (1) (A) In every such company which had over one hundred thousand\npolicies or contracts of the kind or kinds specified in subsection (a)\nhereof, in force at its last preceding election, each in the amount of\none thousand dollars or more, of life insurance or an equivalent thereto\nas hereinbefore provided, any policyholders, prospectively qualified as\nvoters at the next ensuing election of directors, equal in number to\none-tenth of one per centum of such total policies in force or five\nhundred, whichever number is greater, and in every other such company,\nany five hundred or more of such prospectively qualified voters, may\nmake other nominations for one or more vacancies in the board of\ndirectors to be filled at any such election by filing with the\nsuperintendent, at least five months before the election, a certificate,\nsubscribed and affirmed as true under the penalties of perjury by each\nof such policyholders, giving the names and addresses of the candidates\nnominated, the names and addresses of three persons jointly or\nseverally, designated to receive proxies to be voted for said nominees,\nand an appropriate name or title designated by the superintendent to\ndistinguish such ticket from the administration ticket and other\nnominations.\n (B) If the superintendent finds after investigation or hearing that\nsuch other nominations have been made as specified in this subsection,\nhe may certify to such certificate.\n (C) Such nominators shall also file a copy of said certificate,\ncertified by the superintendent, at the home office of the company at\nleast five months before such election.\n (D) Any policyholder who will be qualified to vote at such ensuing\nelection if he continues his policy or contract in force at the time of\nsuch election, shall be deemed prospectively qualified to vote thereat.\n (2) (A) All certificates of nomination shall be accompanied by a\nwritten acceptance of such nomination by each nominee thereon.\n (B) The supreme court in the judicial district in which such company\nhas its home office may for cause shown direct the name of any candidate\nto be stricken from a ticket on file.\n (C) The provisions of subsection (k) hereof shall apply to any vacancy\nso created.\n (3) If no independent nomination shall have been made as provided in\nsubsection (h) hereof, then the provisions of subsections (i) to (k),\nhereof inclusive, of this section, shall not be applicable, and such\nelection of directors shall be conducted in accordance with such\nreasonable rules and regulations as the superintendent may prescribe;\nbut no votes shall be cast or counted except by ballot signed by the\npolicyholder and for candidates nominated by the board of directors, in\naccordance with subsection (g) of this section or for such candidate as\nthe board of directors may have nominated to fill vacancies among said\ncandidates caused by the death, disability or refusal to stand as\ncandidates of any one or more of those so nominated.\n (i) (1) (A) At least three months prior to any such contested election\nthe company shall cause to be mailed, in a sealed envelope with postage\nprepaid, to each policyholder whose name shall be upon said complete\nlist or card catalogue and whose policy shall still be in force, at his\nlast known post-office address, a serially numbered official ballot in a\nform approved by the superintendent and containing the respective\ntickets nominated as hereinbefore provided and the names and addresses\nof the persons so appointed to receive proxies. A corresponding serially\nnumbered stub or card containing the name and address of the\npolicyholder to whom each ballot is sent shall be retained at the home\noffice of the company for the purpose of identifying said ballot when\nreturned.\n (B) Such official ballot shall be conveniently arranged under the\nnames or titles by which the nominations have been designated and shall\nhave printed upon it the name of the company, the post-office address of\nits home office, the number of directors to be elected and the names of\nthose whose terms expire, the date of the election and instructions as\nherein provided for executing such official ballot or for the use of a\nproxy as herein provided and a designated space for the signature of the\npolicyholder, the number of one of his policies and the signature of a\nsubscribing witness.\n (C) No other or different ballot shall be used, except that a\nduplicate ballot or ballots may be supplied to any policyholder and\nvoter or to the holder of his proxy, for his own use, pursuant to rules\nand regulations prescribed by the superintendent.\n (D) There shall be inclosed in such sealed envelope with such official\nballot a suitable return gummed envelope having inscribed thereon the\nname and post-office address of the home office of the company, the\ncorresponding serial number, and the words "ballot for directors". There\nshall also be inclosed in such sealed envelope or printed on the back of\nsuch ballot, a suitable blank proxy together with a statement of the\nright of the policyholder to vote either by mail or by proxy as herein\nprovided or in person.\n (E) No other papers or written or printed matter shall be inclosed in\nsuch sealed envelope. Specimen copies of such sealed envelope, ballot\nand proxy shall be submitted to the superintendent for his approval, and\nno such envelope and inclosures shall be mailed unless the same shall\nhave been approved by him.\n (2) A policyholder desiring to vote directly by mail must indicate the\nname of the nominee or nominees for whom he desires to vote or strike\nout the name or names of those for whom he does not desire to vote upon\nthe official ballot so provided or must otherwise suitably indicate in\nthe blank spaces thereon the nominee or nominees for whom he desires to\nvote, and must sign the said official ballot in his own handwriting in\nthe presence of a subscribing witness, and place or cause to be placed\nthereon the number of at least one policy held by him. Failure to state\nor to correctly state such policy number shall not render a ballot void\nor subject the policyholder to any penalty.\n (3) Such policyholder desiring to vote directly by mail must inclose\nthe official ballot so marked in such return envelope or in a similarly\ninscribed envelope. Such envelope containing the ballot sealed and\npostpaid shall be mailed by the policyholder to the home office of the\ncompany. No policyholder may vote for more than the number of directors\nso to be elected and all ballots upon which the intent of the\npolicyholder does not fairly appear shall be void.\n (j) (1) A policyholder may vote by proxy executed to one or more of\nthe persons designated in the certificates filed as provided in\nsubsections (g) and (h) of this section. The execution of a proxy shall\nbe attested by a subscribing witness and the proxy shall set forth the\nnumber of at least one policy held by the person giving it. A proxy\nshall not be valid unless executed within three months prior to the\nelection and shall be used only at such election or any adjournment\nthereof and may not be revoked by the policyholder giving the same\nunless it appears that the policyholder was induced by fraud or\nmisrepresentation to execute the proxy.\n (2) In exercising such proxy the holder or holders thereof shall vote\nonly upon the official ballot, or the duplicate thereof, furnished to\nsuch policyholder as hereinbefore provided, to which such proxy shall be\nattached. In so voting the proxy holder shall sign said ballot in the\nname of the policyholder, and shall also sign his own name as proxy.\n (3) Ballots voted by proxy holders shall be mailed to the home office,\nor voted in person by said proxy holder, in the same manner as herein\nprescribed for ballots voted directly by policyholders.\n (k) (1) The votes at such contested election shall be limited to the\ncandidates nominated as aforesaid and to substituted nominees chosen as\nfollows:\n (A) In case any vacancy occurs more than five months prior to the day\nset for such election, the board of directors, if such vacancy occurs on\nthe administration ticket, or a majority of the nominators, if such\nvacancy occurs on any independent ticket, shall nominate another\ncandidate to fill such vacancy by filing at least one month prior to the\ndate of such election a certificate of said nomination with the\nsuperintendent and a certified copy thereof at the home office of the\ncompany, and the name of the candidate so selected shall be set forth in\nthe official ballot sent out by the company.\n (B) If such vacancy occurs within five months of such election then\nthe board of directors, including those elected at such election, shall\nhave power to fill such vacancy.\n (2) All ballots by mail shall be received, at the home office of the\ncompany holding such contested election, by two or more persons,\none-half of whom shall be appointed for that purpose by the\nsuperintendent and one-half by the directors of the company. The\ncompensation of the custodians so appointed shall be paid by the\ncompany. Such custodians shall keep a daily record of the envelopes\nmarked as containing ballots for directors which are received at the\nhome office, and shall securely retain them in their joint custody in\nsafety vaults or compartments accessible only to such custodians and not\nto either of them separately, under regulations prescribed by the\nsuperintendent. Prior to the closing of the polls on election day said\ncustodians shall deliver all ballots so received by them to the\ninspectors of election.\n (3) The election shall be held at the home office of the company. The\npolls shall be opened at ten o'clock in the forenoon and remain open\nuntil four o'clock in the afternoon of the day of the election, at which\ntime they shall be closed. All votes cast at such election shall be by\nballot as hereinbefore provided.\n (4) The superintendent shall appoint an adequate number of competent\nand disinterested inspectors of election and may appoint if necessary,\nexpert accountants and other assistants and may authorize the\nprocurement of stationery and supplies necessary for conducting the\nelection and canvassing the votes. The reasonable compensation of such\ninspectors, expert accountants and other assistants prescribed by the\nsuperintendent, and other necessary disbursements approved by him, shall\nbe paid by the company. Such inspectors shall have power to determine\nall questions concerning the verification of the ballots, the\nascertainment of the validity thereof, the qualifications of the voters\nand the canvass of the vote, and with respect thereto shall act under\nsuch rules and regulations as are prescribed by the superintendent.\n (5) All envelopes marked substantially as hereinbefore prescribed\nreceived by mail at the office of the company at any time prior to the\nday of election or on that day before the polls are closed shall be\nforthwith delivered intact without opening to the custodians appointed\nas hereinbefore provided and before the polls are closed shall be\ndelivered to the inspectors of election.\n (6) No person shall conceal or withhold or aid or abet any other\nperson in concealing or withholding from the custodians or inspectors\nany such envelope; nor shall any person, other than an inspector, or an\nauthorized assistant, open or aid or abet any person to open any such\nenvelope.\n (7) No ballots received by mail at the office of the company or\noffered personally or by proxy after the polls are closed shall be\ncounted. All ballots offered personally or under proxies and all ballots\nreceived by mail at the office of the company as aforesaid before the\npolls are closed shall be received by the inspectors subject to\nverification and ascertainment of the validity thereof and of the\nqualifications of the voters.\n (8) Immediately upon the closing of the polls the inspectors shall\nproceed to the examination of the ballots and shall canvass the votes\nlawfully cast. The canvass shall proceed from day to day and the\ninspectors, or a majority thereof, shall certify the result to the\ncompany and to the superintendent as soon as it is completed. Such\ncertificate shall be subscribed and affirmed by such inspectors as true\nunder the penalties of perjury. Unless contested by the superintendent\nor other qualified person pursuant to paragraph twelve hereof, the\nresults so certified shall be decisive. The superintendent may require\nthe inspectors to report for determination by him any questions upon\nwhich they may disagree.\n (9) Representatives designated by a majority of each three persons who\nshall have been appointed as aforesaid to receive proxies to be voted\nfor tickets nominated for such contested election, in such number as\nshall be approved by the superintendent, may be present during the\ncasting, verification and canvass of the votes. The compensation of such\nrepresentatives shall not be a charge upon or paid from the funds of the\ncompany.\n (10) All ballots and proxies received by the inspectors of election\nshall immediately upon the completion of the canvass be placed in sealed\npackages and shall be preserved by the said inspectors for a period of\nfour months, subject to the order of any court having jurisdiction of\nany proceedings relating thereto. The necessary expenses of preserving\nsuch ballots and proxies shall be paid by the company as a part of the\nexpenses of such election.\n (11) The superintendent shall have power to supervise and direct the\nmethods and procedure of any such contested election and to make all\nfurther needful rules and regulations concerning the same. The\nsuperintendent shall prescribe the method of distribution of ballots and\nproxies to policyholders, qualified to vote at such election, who are\nnot included in such list or card catalogue, and shall prescribe\nreasonable rules and regulations for the casting of such ballots and the\nexercise of such proxies. All bills for or on account of the custodians\nof ballots and inspectors of election, their employees, assistants and\nother necessary expenses or disbursements, during the conduct of such\ncontested election, and the canvass of the votes, shall be approved by\nthe superintendent before payment by the company.\n (12) Any such contested election and the conduct thereof shall at all\ntimes, on petition of the superintendent or of any person or persons\nqualified with respect to any procedure or right therein which is in\nquestion, be subject to the supervision and control of the supreme court\nin the judicial district in which such company has its home office, in\nlike manner as elections for state, county and municipal officers, so\nfar as analogous thereto.\n (l) The inclusion by any such company of the name of any person in any\nlist of policyholders required by this section shall not be construed as\nan admission by the company of the validity of any policy or contract\nand no such list shall be competent evidence against the corporation in\nany action or proceeding in which the question of the validity of any\npolicy or contract or of any claim under it is involved.\n (m) (1) No insurance company, and no officer, agent or employee\nthereof shall knowingly omit, from any list or card catalogue herein\nrequired to be filed, the name of any policyholder required to be\nincluded therein, or shall knowingly omit to give the correct name and\naddress of such policyholder, or shall knowingly give a wrong address,\nor shall expend, advance or lend any money of the company contrary to\nthe provisions of this section.\n (2) Except where such expenditure is otherwise authorized or required\nby this section, no money of the company shall be expended in connection\nwith any such election or in canvassing therefor, and no officer or\nagent of the company shall directly or indirectly make any advance or\nloan of such moneys to any person in connection with or for the purpose\nof such election or canvass unless the expenditure or loan is in a\ncontested election and shall be limited to reasonable amounts authorized\nby the board of directors of the company and approved in advance by the\nsuperintendent.\n (3) No officer, salaried agent or employee of any such company shall,\nwithin the period between the filing of the nominations and the\nelection, during business hours, devote any of his time to soliciting\nvotes in support of or in opposition to any candidate or list of\ncandidates in connection with any such election of directors. No\nofficer, agent or employee of any such company shall compel or coerce\nany other such officer, agent or employee to support, work for, or\noppose any candidate or any list of candidates. Neither the stationery\nor supplies of any such company nor office space devoted to the conduct\nof its business shall be used for furthering the interest of any ticket\nor candidate at any election of directors. Notwithstanding the above,\nthe company may utilize the time of officers, employees and agents,\noffice space, stationery and supplies in circumstances where money of\nthe company may be expended pursuant to paragraph two of this\nsubsection, but no officer, employee or agent shall in connection with\nany election be coerced to undertake activity outside the scope of the\nduties of the position of such officer, employee or agent.\n (4) No person, firm or corporation, whether connected with such\ncompany or otherwise, shall issue or cause to be issued any circular or\nother written or printed communication, either in behalf of or in\nopposition to any ticket or any candidate for election as director of\nsuch company which contains any false statement.\n (5) No policyholder shall sell or offer to sell any vote or proxy for\nany sum of money or anything of value. No agent shall be paid or receive\nany sum of money or anything of value in connection with the voting of a\nballot or obtaining of a proxy.\n (n) In addition to the procedures described in this section, a\ndomestic mutual life insurance company may, upon approval of the\nsuperintendent, offer policyholders alternate methods of voting in an\nuncontested election and receiving materials related thereto, including\nvia electronic means. The superintendent may approve such methods if he\nor she finds that they are consistent with the requirements of law and\nequitable and reasonable for the company's policyholders. The\nsuperintendent may issue such rules and regulations as he or she deems\nnecessary to implement the provisions of this subsection.\n