RCW 48.08.010
Increase of capital stock.
(1) Increase of the capital stock of a domestic stock insurer shall be by amendment to its articles of incorporation.
(2) If the increased capital stock is to be distributed as a stock dividend, such increased capital stock may be fully paid in out of any available surplus funds as is provided in RCW 48.08.030, and such payment shall be effected by a transfer on the insurer's books from its surplus account to its capital account.
(3) When the increased capital has been fully paid in, a certificate to such effect shall be made in quadruplicate under oath and the corporate seal by the insurer's president and secretary and filed in the public offices named in RCW 48.07.070
.
[
1953 c 197 s 4
; 1947 c 79 s .08.01; Rem. Supp. 1947 s 45.08.01.]
RCW 48.08.020
Reduction of capital stock.
(1) Reduction of the capital stock of a domestic stock insurer shall be by amendment of its articles of incorporation. No such reduction shall be made which results in capital stock less in amount than the minimum required by this code for the kinds of insurance thereafter to be transacted by the insurer.
(2) No surplus funds of the insurer resulting from a reduction of its capital stock shall be distributed to stockholders, except as a stock dividend on a subsequent increase of capital stock, or upon dissolution of the insurer, or upon approval of the commissioner of a distribution upon proof satisfactory to him or her that the distribution will not impair the interests of policyholders or the insurer's solvency.
(3) Upon such reduction of capital stock, the insurer's directors shall call in any outstanding stock certificates required to be changed pursuant thereto, and issue proper certificates in their stead.
[
2009 c 549 s 7028
; 1947 c 79 s .08.02; Rem. Supp. 1947 s 45.08.02.]
RCW 48.08.030
Dividends to stockholders.
(1) No domestic stock insurer shall pay any cash dividend to stockholders except out of earned surplus. For the purpose of this section, "earned surplus" means that part of its available surplus funds which is derived from any realized net profits on its business, and does not include unrealized capital gains or reevaluation of assets.
(2) Such an insurer may pay a stock dividend out of any available surplus funds.
(3) Payment of any dividend to stockholders of a domestic stock insurer shall also be subject to all the limitations and requirements governing the payment of dividends by other private corporations.
(4) No dividend shall be declared or paid which would reduce the insurer's surplus to an amount less than the minimum required for the kinds of insurance thereafter to be transacted.
(5) For the purposes of this chapter "surplus funds" means the excess of the insurer's assets over its liabilities, including its capital stock as a liability.
(6) Available surplus means the excess over the minimum amount of surplus required for the kinds of insurance the insurer is authorized to transact.
[
1993 c 462 s 52
; 1947 c 79 s .08.03; Rem. Supp. 1947 s 45.08.03.]
NOTES:
Severability
—
Implementation
—
1993 c 462:
See RCW 48.31B.901
and
48.31B.902
.
RCW 48.08.040
Illegal dividends, reductions
—
Penalty against directors.
Any director of a domestic stock insurer who votes for or concurs in the declaration or payment of any dividend to stockholders or a reduction of capital stock not authorized by law shall, in addition to any other liability imposed by law, be guilty of a gross misdemeanor.
[1947 c 79 s .08.04; Rem. Supp. 1947 s 45.08.04.]
RCW 48.08.050
Impairment of capital.
(1) If the capital stock of a domestic stock insurer becomes impaired, the commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to require its stockholders to make good the deficiency within ninety days after service of such notice.
(2) The deficiency shall be made good in cash, or in assets eligible under this code for the investment of the insurer's funds, or by reduction of the insurer's capital stock to an amount not below the minimum required for the kinds of insurance to be thereafter transacted.
(3) If the deficiency is not made good and proof thereof filed with the commissioner within such ninety-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this code.
(4) If the deficiency is not made good the insurer shall not issue or deliver any policy after the expiration of such ninety-day period. Any officer or director who violates or knowingly permits the violation of this provision shall be subject to a fine of from fifty dollars to one thousand dollars for each violation.
[1947 c 79 s .08.05; Rem. Supp. 1947 s 45.08.05.]
RCW 48.08.060
Repayment of contributions to surplus.
Contributions to the surplus of a domestic stock insurer other than resulting from sale of its capital stock, shall not be subject to repayment except out of surplus in excess of the minimum surplus initially required of such an insurer transacting like kinds of insurance.
[1947 c 79 s .08.06; Rem. Supp. 1947 s 45.08.06.]
RCW 48.08.070
Participating policies.
(1) Any domestic stock insurer may, if its charter so provides, issue policies entitled to participate from time to time in the earnings of the insurer through dividends.
(2) Any classification of its participating policies and of risks assumed thereunder which the insurer may make shall be reasonable. No dividend shall be paid which is inequitable or which unfairly discriminates as between such classifications or as between policies within the same classification.
(3) No such insurer shall issue in this state both participating and nonparticipating policies for the same class of risks; except, that both participating and nonparticipating life insurance policies may be issued if the right or absence of the right to participate is reasonably related to the premium charged.
(4) Dividends to participating life insurance policies issued by such insurer shall be paid only out of its surplus funds as defined in subsection (5) of RCW 48.08.030
. Dividends to participating policies for other kinds of insurance shall be paid only out of that part of such surplus funds which is derived from any realized net profits from the insurer's business.
(5) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.
[1947 c 79 s .08.07; Rem. Supp. 1947 s 45.08.07.]
RCW 48.08.080
Mutualization of stock insurers.
(1) Any domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as are approved by the commissioner in advance of such mutualization.
(2) The commissioner shall not approve any such plan, procedure, or mutualization unless:
(a) It is equitable to both shareholders and policyholders.
(b) It is approved by vote of the holders of not less than three-fourths of the insurer's capital stock having voting rights, and by vote of not less than two-thirds of the insurer's policyholders who vote on such plan, pursuant to such notice and procedure as may be approved by the commissioner. Such vote may be registered in person, by proxy, or by mail.
(c) If a life insurer, the right to vote thereon is limited to those policyholders whose policies have face amounts of not less than one thousand dollars and have been in force one year or more.
(d) Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair value thereof as determined by competent disinterested appraisers.
(e) The plan provides for appraisal and purchase of the shares of any nonconsenting stockholder in accordance with the laws of this state relating to the sale or exchange of all the assets of a private corporation.
(f) The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective.
(g) The mutualization leaves the insurer with surplus funds reasonably adequate to preserve the security of its policyholders and its ability to continue successfully in business in the states in which it is then authorized, and in the kinds of insurance it is then authorized to transact.
[1947 c 79 s .08.08; Rem. Supp. 1947 s 45.08.08.]
RCW 48.08.090
Stockholder meetings
—
Duty to inform stockholders of matters to be presented
—
Proxies.
(1) This section shall apply to all domestic stock insurers except:
(a) A domestic stock insurer having less than one hundred stockholders; except, that if ninety-five percent or more of the insurer's stock is owned or controlled by a parent or affiliated insurer, this section shall not apply to such insurer unless its remaining shares are held by five hundred or more stockholders.
(b) Domestic stock insurers which file with the Securities and Exchange Commission forms of proxies, consents and authorizations pursuant to the Securities and Exchange Act of 1934, as amended.
(2) Every such insurer shall seasonably furnish its stockholders in advance of stockholder meetings, information in writing reasonably adequate to inform them relative to all matters to be presented by the insurer's management for consideration of stockholders at such meeting.
(3) No person shall solicit a proxy, consent, or authorization in respect of any stock of such an insurer unless he or she furnishes the person so solicited with written information reasonably adequate as to
(a) The material matters in regard to which the powers so solicited are proposed to be used, and
(b) The person or persons on whose behalf the solicitation is made, and the interest of such person or persons in relation to such matters.
(4) No person shall so furnish to another, information which the informer knows or has reason to believe, is false or misleading as to any material fact, or which fails to state any material fact reasonably necessary to prevent any other statement made from being misleading.
(5) The form of all such proxies shall:
(a) Conspicuously state on whose behalf the proxy is solicited;
(b) Provide for dating the proxy;
(c) Impartially identify each matter or group of related matters intended to be acted upon;
(d) Provide means for the principal to instruct the vote of his or her shares as to approval or disapproval of each matter or group, other than election to office; and
(e) Be legibly printed, with context suitably organized.
Except, that a proxy may confer discretionary authority as to matters as to which choice is not specified pursuant to (d) of this subsection, if the form conspicuously states how it is intended to vote the proxy or authorization in each such case; and may confer discretionary authority as to other matters which may come before the meeting but unknown for a reasonable time prior to the solicitation by the persons on whose behalf the solicitation is made.
(6) No proxy shall confer authority (a) to vote for election of any person to any office for which a bona fide nominee is not named in the proxy statement, or (b) to vote at any annual meeting (or adjournment thereof) other than the annual meeting next following the date on which the proxy statement and form were furnished stockholders.
(7) The commissioner shall have authority to make and promulgate reasonable rules and regulations for the effectuation of this section, and in so doing shall give due consideration to rules and regulations promulgated for similar purposes by the insurance supervisory officials of other states.
[
2010 c 8 s 11001
;
2009 c 549 s 7029
;
1965 ex.s. c 70 s 5
.]
NOTES:
Exemption from federal registration: 15 U.S.C. s 78 l(g)(2)(G).
RCW 48.08.100
Equity security
—
Defined.
The term "equity security" when used in RCW 48.08.100
through
48.08.160
means any stock or similar security; or any security convertible, with or without consideration, into such a security, or carrying any warrant or right to subscribe to or purchase such a security; or any such warrant or right; or any other security which the commissioner shall deem to be of similar nature and consider necessary or appropriate, by such rules and regulations as he or she may prescribe in the public interest or for the protection of investors, to treat as an equity security.
[
2009 c 549 s 7030
;
1965 ex.s. c 70 s 11
.]
RCW 48.08.110
Equity security
—
Duty to file statement of ownership.
Every person who is directly or indirectly the beneficial owner of more than ten percent of any class of any equity security of a domestic stock insurer, or who is a director or an officer of such insurer, shall file with the commissioner on or before the 30th day of September, 1965, or within ten days after he or she becomes such beneficial owner, director or officer, a statement, in such form as the commissioner may prescribe, of the amount of all equity securities of such insurer of which he or she is the beneficial owner, and within ten days after the close of each calendar month thereafter, if there has been a change in such ownership during such month, shall file with the commissioner a statement, in such form as the commissioner may prescribe, indicating his or her ownership at the close of the calendar month and such changes in his or her ownership as have occurred during such calendar month.
[
2009 c 549 s 7031
;
1965 ex.s. c 70 s 6
.]
RCW 48.08.120
Equity security
—
Profits from short term transactions
—
Remedies
—
Limitation of actions.
For the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director or officer by reason of his or her relationship to such insurer, any profit realized by him from any purchase and sale, or any sale and purchase, of any equity security of such insurer within any period of less than six months, unless such security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the insurer, irrespective of any intention on the part of such beneficial owner, director or officer in entering into such transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six months. Suit to recover such profit may be instituted at law or in equity in any court of competent jurisdiction by the insurer, or by the owner of any security of the insurer in the name and in behalf of the insurer if the insurer shall fail or refuse to bring such suit within sixty days after request or shall fail diligently to prosecute the same thereafter: PROVIDED, That no such suit shall be brought more than two years after the date such profit was realized. This section shall not be construed to cover any transaction where such beneficial owner was not such both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions which the commissioner by rules and regulations may exempt as not comprehended within the purpose of this section.
[
2009 c 549 s 7032
;
1965 ex.s. c 70 s 7
.]
NOTES:
Exemption from federal registration: 15 U.S.C. s 78 l(g)(2)(G).
RCW 48.08.130
Equity security
—
Sales, unlawful practices.
It shall be unlawful for any such beneficial owner, director or officer, directly or indirectly, to sell any equity security of such insurer if the person selling the security or his or her principal (1) does not own the security sold, or (2) if owning the security, does not deliver it against such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation: PROVIDED, That no person shall be deemed to have violated this section if he or she proves that notwithstanding the exercise of good faith he or she was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense.
[
2010 c 8 s 11002
;
2009 c 549 s 7033
;
1965 ex.s. c 70 s 8
.]
RCW 48.08.140
Equity security
—
Exemptions
—
Sales by dealer.
The provisions of RCW 48.08.120
shall not apply to any purchase and sale, or sale and purchase, and the provisions of RCW 48.08.130
shall not apply to any sale of an equity security of a domestic stock insurer not then or theretofore held by him or her in an investment account, by a dealer in the ordinary course of his or her business and incident to the establishment or maintenance by him or her of a primary or secondary market (otherwise than on an exchange as defined in the Securities Exchange Act of 1934) for such security. The commissioner may, by such rules and regulations as he or she deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.
[
2009 c 549 s 7034
;
1965 ex.s. c 70 s 9
.]
RCW 48.08.150
Equity security
—
Exemptions
—
Foreign or domestic arbitrage transactions.
The provisions of RCW 48.08.110, 48.08.120
and
48.08.130
shall not apply to foreign or domestic arbitrage transactions unless made in contravention of such rules and regulations as the commissioner may adopt in order to carry out the purposes of RCW 48.08.100
through
48.08.160
.
[
1965 ex.s. c 70 s 10
.]
RCW 48.08.160
Equity security
—
Exemptions
—
Securities registered or required to be, or no class held by one hundred or more persons.
The provisions of RCW 48.08.110, 48.08.120, and
48.08.130
shall not apply to equity securities of a domestic stock insurer if (1) such securities shall be registered, or shall be required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934, as amended, or if (2) such domestic stock insurer shall not have any class of its equity securities held of record by one hundred or more persons on the last business day of the year next preceding the year in which equity securities of the insurer would be subject to the provisions of RCW 48.08.110, 48.08.120, and
48.08.130
except for the provisions of this subsection (2).
[
1965 ex.s. c 70 s 12
.]
RCW 48.08.170
Equity security
—
Rules and regulations.
The commissioner shall have the power to make such rules and regulations as may be necessary for the execution of the functions vested in him or her by RCW 48.08.100
through
48.08.160, and may for such purpose classify domestic stock insurers, securities, and other persons or matters within his jurisdiction. No provision of RCW 48.08.110, 48.08.120, and
48.08.130
imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the commissioner, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.
[
2009 c 549 s 7035
;
1965 ex.s. c 70 s 13
.]
RCW 48.08.190
Failure to file required information, documents, or reports
—
Forfeiture.
Any person who fails to file information, documents, or reports required to be filed under chapter 241, Laws of 1969 ex. sess. or any rule or regulation thereunder shall forfeit to the state of Washington the sum of one hundred dollars for each and every day such failure to file shall continue. Such forfeiture, which shall be in lieu of any criminal penalty for such failure to file which might be deemed to arise under this title, shall be payable to the treasurer of the state of Washington and shall be recoverable in a civil suit in the name of the state of Washington.
[
1969 ex.s. c 241 s 18
.]