NY Ins L § 4210 (2021)
2021 New York Laws ISC - Insurance Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies 4210 - Election of Directors of Domestic Mutual Life Insurance Companies.

§  4210.  Election  of  directors  of  domestic  mutual life insurance companies. (a) (1) The directors of every domestic mutual life insurance company shall be elected in the manner and subject  to  the  regulations prescribed in this section.  (2)  Every  such company shall, in accordance with its charter, either elect its entire board of directors biennially, or divide its  board  of directors  into  not more than three classes, as nearly equal as may be, in which case the members of one class only shall be elected annually.  (3) In this section:  (A) "Policyholder" means the person insured under an individual policy of life insurance or of accident and health insurance  issued  upon  the application  of  such person, the person who effectuates any such policy upon the person of another pursuant to subsection (c) of  section  three thousand  two  hundred  five  of  this  chapter,  the person to whom any annuity or pure endowment is presently or prospectively payable  by  the terms  of  an  individual  annuity  or a pure endowment contract, except where the policy or contract declares some other person to be the  owner or  holder  thereof,  in  which case such owner or policyholder shall be deemed  the  policyholder,  and  except  in  cases  of   assignment   as hereinafter  provided.  In  the  case  of  any such individual policy or contract insuring two or more persons jointly the persons  insured,  or, if  any  such policy be issued upon the application of some third person or persons, the person  or  persons  who  effectuated  any  such  policy pursuant to subsection (c) of section three thousand two hundred five of this chapter shall be deemed one policyholder within the meaning of this section. In case any such policy or contract shall have been assigned by an  assignment  absolute  on  its  face,  to  an assignee other than the company which shall have issued such policy, and in case  the  signature of such assignee, either attested by the assignor or acknowledged by the assignee,  shall  have  been  more than six months prior to any election hereinafter referred to, filed at the principal office of such  company, then  such assignee shall be deemed a policyholder within the meaning of this section. In the case of every policy or contract of group insurance or group annuity contract, issued by  such  company,  the  employer,  or other  person, firm, corporation or association to whom or in whose name the master policy shall have been issued and held, shall be  deemed  one policyholder  within  the  meaning  of  this  section.  Whenever in this section reference is made to a policy of life insurance for one thousand dollars  or  more,  such  reference  shall  be  deemed  to  include,  as equivalent thereto, an annuity contract which at normal date of maturity requires the payment of one hundred dollars or more annually, and a pure endowment  contract  for  the  principal  sum of one thousand dollars or more.  (B) "Acknowledged", when  used  in  reference  to  any  instrument  or signature,  shall  have  the  same  meaning which it has in reference to conveyances of real property eligible for recording  under  section  two hundred ninety-one of the real property law.  (b) (1)  Every  participating  policyholder  of such company and every policyholder  of  such  company  whose   policy   or   contract   is   a non-participating  policy or contract described in the first sentence of paragraph one of subsection (e) of section  four  thousand  two  hundred thirty-one  of  this  article, or a variable annuity contract subject to paragraph one of subsection (d) of section  four  thousand  two  hundred forty of this article and whose policy or contract shall be in force and shall  have  been  in  force  for  at  least  one year prior to any such election shall be  entitled,  without  further  qualification,  to  vote thereat,  either  in  person  or  by  mail  or  by proxy, as hereinafter provided, except that any company may adopt a  resolution  amending  its  charter or by-laws so as to provide that all voting by policyholders for directors  shall  be  by ballot alone and not by proxy. In the event any company adopts such an amendment, all mention of proxy or proxies or  of persons  to  receive  proxies  in  this section, shall not apply to such company and such company shall conduct its elections only  by  means  of ballots  as  long  as such amendment is in effect. Any such company may, upon the approval of the superintendent, confer, upon all or  any  class of  its  non-participating  policyholders  holding  a policy or contract issued pursuant to the special permit granted by the  superintendent  in accordance with paragraph one of subsection (e) of section four thousand two  hundred  thirty-one  of  this  article, the same rights to vote for directors   possessed   by   its   participating   policyholders.    The superintendent  may  give  such  approval  if he finds that the proposed change is in conformity with  the  requirements  of  law  and  that  the representation  of  the policyholders therein conferred is equitable and reasonable.  (2) Every other person having a right to vote in any such election  by virtue  of  any  contract  which was made prior to April twenty-seventh, nineteen hundred six, and which shall be in force at the  time  of  such election, shall be entitled to vote thereat in similar manner.  (3)  In  any election of directors of a domestic mutual life insurance company pursuant to the provisions of this section,  every  policyholder shall  be  entitled  to  one  vote  only,  irrespective of the number of policies or contracts held by him and of the amount thereof.  (c) (1) Not less than five months nor more than eight months prior  to any such election, on request of not less than twenty-five policyholders entitled  to  vote  at  the  last  prior election, which request must be subscribed and affirmed as true under the penalties of perjury  by  each of  such  policyholders and must be filed in duplicate with such company at least five days before any hearing thereon, the superintendent, after notice of not less than five days to such company and a hearing thereon, may in his discretion order such company within a  period  of  not  more than  forty-five  days and not less than thirty days thereafter, to file in his office, or in some suitable place designated by him and under his custody, a full and correct copy of its list or card  catalogue  of  the names  and last known postoffice addresses of all policyholders who have been such for at least six months under a policy of life  insurance  for one  thousand  dollars or more, or to file any part of such list or card catalogue as the superintendent specifies.  (2) A list or any part thereof which may be so ordered filed  pursuant to  paragraph  one hereof shall be arranged, classified and corrected as directed  by  the  superintendent;  and  if  one  or  more   independent nominations  are  made, as specified in subsection (h) hereof, then such election shall be deemed a contested election and  a  complete  list  or card  catalogue  of names of all policyholders who are eligible to vote, as defined in this section, under a policy of  life  insurance  for  one thousand  dollars or more shall be so filed within forty-five days after the copy of the  certificate  of  such  nominations,  certified  by  the superintendent shall have been filed at the home office of such company, and  such  list or card catalogue shall be corrected from the records of such home office so that a list or card catalogue, as nearly correct  as may  be,  shall  be  on file as aforesaid down to within three months of such election.  (d) (1) Such list or card catalogue or  any  part  thereof  so  filed, while  in  the  custody  of  the  superintendent,  shall  be  subject to inspection, under regulations prescribed by  him,  at  any  time  during business  hours by any policyholder of such company or by his authorized representative, and in case of a contested election,  under  regulations  to  be  prescribed  by the superintendent, may be used in the canvass of the policyholders of the company.  (2)  After  such  election,  or, if no independent nomination has been made, then after the time for such independent nominations has  expired, such  list or card catalogue shall be returned to the company filing the same.  (e) If all or any class of the policyholders  of  any  domestic  stock life  insurance company shall be entitled to vote at any election of the directors of such company, such policyholders, subject to the provisions of the company's charter, shall be entitled to vote in person, by  proxy or  by  mail,  as  herein  provided,  and under the conditions stated in subsection  (c)  hereof,  a  similar   list   or   card   catalogue   of policyholders,  qualified  to  vote,  in  accordance with the charter or by-laws of such corporation, except the holders of industrial  policies, shall be filed and maintained in the office of the superintendent, or in some  suitable place designated by him and under his custody, and at the home office  of  such  company,  respectively,  similarly  arranged  and similarly  subject  to inspection and copy and withdrawal as in the case of mutual life insurance companies as above provided.  (f) Where policyholders in any company shall have made nominations  as hereinafter  prescribed,  they  or  a committee representing them, shall upon demand, and with the approval of the superintendent and the payment to the company of the actual cost of making such copies, be furnished by such company with a copy of such list of policyholders or  with  a  copy therefrom  of  the  policyholders  residing in a designated territory. A copy of a list so taken, or of  any  part  thereof,  shall  be  held  by persons receiving the same inviolate and solely for the purposes of said nominators  in  a pending election and shall not be transmitted to other persons for any other use whatever. At the close of the canvass  of  the votes all copies of such lists shall be returned to the company.  (g)  At  least  seven  months  prior  to  the  date of any election of directors in any such company, the board  of  directors  shall  nominate candidates  for  every  vacancy  to be filled at such election and shall also appoint three persons, jointly or severally, to receive proxies  to be  voted  for  said nominees, and shall also file in duplicate with the superintendent and at its home office a certificate of the names of  the candidates so nominated and of the persons so designated to receive said proxies, which shall be described as the "administration ticket."  (h)  (1) (A) In every such company which had over one hundred thousand policies or contracts of the kind or kinds specified in  subsection  (a) hereof,  in  force at its last preceding election, each in the amount of one thousand dollars or more, of life insurance or an equivalent thereto as hereinbefore provided, any policyholders, prospectively qualified  as voters  at  the  next  ensuing election of directors, equal in number to one-tenth of one per centum of such total  policies  in  force  or  five hundred,  whichever  number is greater, and in every other such company, any five hundred or more of such  prospectively  qualified  voters,  may make  other  nominations  for  one  or  more  vacancies  in the board of directors to  be  filled  at  any  such  election  by  filing  with  the superintendent, at least five months before the election, a certificate, subscribed  and  affirmed as true under the penalties of perjury by each of such policyholders, giving the names and addresses of the  candidates nominated,   the  names  and  addresses  of  three  persons  jointly  or severally, designated to receive proxies to be voted for said  nominees, and  an  appropriate  name  or title designated by the superintendent to distinguish  such  ticket  from  the  administration  ticket  and  other nominations.  (B)  If  the  superintendent finds after investigation or hearing that such other nominations have been made as specified in  this  subsection, he may certify to such certificate.  (C)  Such  nominators  shall  also  file  a  copy of said certificate, certified by the superintendent, at the home office of  the  company  at least five months before such election.  (D)  Any  policyholder  who  will be qualified to vote at such ensuing election if he continues his policy or contract in force at the time  of such election, shall be deemed prospectively qualified to vote thereat.  (2)  (A)  All  certificates  of  nomination  shall be accompanied by a written acceptance of such nomination by each nominee thereon.  (B) The supreme court in the judicial district in which  such  company has its home office may for cause shown direct the name of any candidate to be stricken from a ticket on file.  (C) The provisions of subsection (k) hereof shall apply to any vacancy so created.  (3)  If  no independent nomination shall have been made as provided in subsection (h) hereof, then the provisions of subsections  (i)  to  (k), hereof  inclusive,  of  this  section, shall not be applicable, and such election of  directors  shall  be  conducted  in  accordance  with  such reasonable  rules  and  regulations as the superintendent may prescribe; but no votes shall be cast or counted except by  ballot  signed  by  the policyholder  and for candidates nominated by the board of directors, in accordance with subsection (g) of this section or for such candidate  as the  board  of directors may have nominated to fill vacancies among said candidates caused by the  death,  disability  or  refusal  to  stand  as candidates of any one or more of those so nominated.  (i) (1) (A) At least three months prior to any such contested election the  company shall cause to be mailed, in a sealed envelope with postage prepaid, to each policyholder whose name shall  be  upon  said  complete list  or card catalogue and whose policy shall still be in force, at his last known post-office address, a serially numbered official ballot in a form approved  by  the  superintendent  and  containing  the  respective tickets  nominated  as hereinbefore provided and the names and addresses of the persons so appointed to receive proxies. A corresponding serially numbered  stub  or  card  containing  the  name  and  address   of   the policyholder  to  whom each ballot is sent shall be retained at the home office of the company for the purpose of identifying  said  ballot  when returned.  (B)  Such  official  ballot  shall  be conveniently arranged under the names or titles by which the nominations have been designated and  shall have printed upon it the name of the company, the post-office address of its  home office, the number of directors to be elected and the names of those whose terms expire, the date of the election and  instructions  as herein  provided  for executing such official ballot or for the use of a proxy as herein provided and a designated space for the signature of the policyholder, the number of one of his policies and the signature  of  a subscribing witness.  (C)  No  other  or  different  ballot  shall  be  used,  except that a duplicate ballot or ballots may be  supplied  to  any  policyholder  and voter  or to the holder of his proxy, for his own use, pursuant to rules and regulations prescribed by the superintendent.  (D) There shall be inclosed in such sealed envelope with such official ballot a suitable return gummed envelope having  inscribed  thereon  the name  and  post-office  address  of  the home office of the company, the corresponding serial number, and the words "ballot for directors". There shall also be inclosed in such sealed envelope or printed on the back of such ballot, a suitable blank proxy together with  a  statement  of  the  right  of  the policyholder to vote either by mail or by proxy as herein provided or in person.  (E)  No other papers or written or printed matter shall be inclosed in such sealed envelope. Specimen copies of such  sealed  envelope,  ballot and proxy shall be submitted to the superintendent for his approval, and no  such  envelope  and inclosures shall be mailed unless the same shall have been approved by him.  (2) A policyholder desiring to vote directly by mail must indicate the name of the nominee or nominees for whom he desires to  vote  or  strike out  the name or names of those for whom he does not desire to vote upon the official ballot so provided or must otherwise suitably  indicate  in the  blank spaces thereon the nominee or nominees for whom he desires to vote, and must sign the said official ballot in his own  handwriting  in the  presence  of a subscribing witness, and place or cause to be placed thereon the number of at least one policy held by him. Failure to  state or  to correctly state such policy number shall not render a ballot void or subject the policyholder to any penalty.  (3) Such policyholder desiring to vote directly by mail  must  inclose the  official ballot so marked in such return envelope or in a similarly inscribed envelope. Such  envelope  containing  the  ballot  sealed  and postpaid  shall  be mailed by the policyholder to the home office of the company. No policyholder may vote for more than the number of  directors so  to  be  elected  and  all  ballots  upon  which  the  intent  of the policyholder does not fairly appear shall be void.  (j) (1) A policyholder may vote by proxy executed to one  or  more  of the  persons  designated  in  the  certificates  filed  as  provided  in subsections (g) and (h) of this section. The execution of a proxy  shall be  attested  by a subscribing witness and the proxy shall set forth the number of at least one policy held by the  person  giving  it.  A  proxy shall  not  be  valid  unless  executed within three months prior to the election and shall be used only at  such  election  or  any  adjournment thereof  and  may  not  be  revoked  by the policyholder giving the same unless it  appears  that  the  policyholder  was  induced  by  fraud  or misrepresentation to execute the proxy.  (2)  In exercising such proxy the holder or holders thereof shall vote only upon the official ballot, or the duplicate  thereof,  furnished  to such policyholder as hereinbefore provided, to which such proxy shall be attached.  In  so  voting the proxy holder shall sign said ballot in the name of the policyholder, and shall also sign his own name as proxy.  (3) Ballots voted by proxy holders shall be mailed to the home office, or voted in person by said proxy holder, in the same  manner  as  herein prescribed for ballots voted directly by policyholders.  (k)  (1)  The votes at such contested election shall be limited to the candidates nominated as aforesaid and to substituted nominees chosen  as follows:  (A)  In case any vacancy occurs more than five months prior to the day set for such election, the board of directors, if such vacancy occurs on the administration ticket, or a majority  of  the  nominators,  if  such vacancy  occurs  on  any  independent  ticket,  shall  nominate  another candidate to fill such vacancy by filing at least one month prior to the date of  such  election  a  certificate  of  said  nomination  with  the superintendent  and  a  certified copy thereof at the home office of the company, and the name of the candidate so selected shall be set forth in the official ballot sent out by the company.  (B) If such vacancy occurs within five months of  such  election  then the  board of directors, including those elected at such election, shall have power to fill such vacancy.  (2) All ballots by mail shall be received, at the home office  of  the company  holding  such  contested  election,  by  two  or  more persons, one-half  of  whom  shall  be  appointed  for  that   purpose   by   the superintendent  and  one-half  by  the  directors  of  the  company. The compensation  of  the  custodians  so  appointed  shall  be  paid by the company. Such custodians shall keep a  daily  record  of  the  envelopes marked  as  containing  ballots  for directors which are received at the home office, and shall securely retain them in their  joint  custody  in safety vaults or compartments accessible only to such custodians and not to  either  of  them  separately,  under  regulations  prescribed by the superintendent. Prior to the closing of the polls on election  day  said custodians  shall  deliver  all  ballots  so  received  by  them  to the inspectors of election.  (3) The election shall be held at the home office of the company.  The polls  shall  be  opened  at ten o'clock in the forenoon and remain open until four o'clock in the afternoon of the day of the election, at which time they shall be closed. All votes cast at such election shall  be  by ballot as hereinbefore provided.  (4)  The  superintendent shall appoint an adequate number of competent and disinterested inspectors of election and may appoint  if  necessary, expert   accountants   and   other  assistants  and  may  authorize  the procurement of stationery and  supplies  necessary  for  conducting  the election  and  canvassing the votes. The reasonable compensation of such inspectors, expert accountants and other assistants  prescribed  by  the superintendent, and other necessary disbursements approved by him, shall be  paid  by  the company. Such inspectors shall have power to determine all  questions  concerning  the  verification  of   the   ballots,   the ascertainment  of the validity thereof, the qualifications of the voters and the canvass of the vote, and with respect thereto  shall  act  under such rules and regulations as are prescribed by the superintendent.  (5)  All  envelopes  marked  substantially  as hereinbefore prescribed received by mail at the office of the company at any time prior  to  the day  of  election  or  on  that day before the polls are closed shall be forthwith delivered intact without opening to the  custodians  appointed as  hereinbefore  provided  and  before  the  polls  are closed shall be delivered to the inspectors of election.  (6) No person shall conceal or withhold  or  aid  or  abet  any  other person  in  concealing  or withholding from the custodians or inspectors any such envelope; nor shall any person, other than an inspector, or  an authorized  assistant,  open  or aid or abet any person to open any such envelope.  (7) No ballots received by mail  at  the  office  of  the  company  or offered  personally  or  by  proxy  after  the polls are closed shall be counted. All ballots offered personally or under proxies and all ballots received by mail at the office of the company as  aforesaid  before  the polls  are  closed  shall  be  received  by  the  inspectors  subject to verification and ascertainment  of  the  validity  thereof  and  of  the qualifications of the voters.  (8)  Immediately  upon  the  closing of the polls the inspectors shall proceed to the examination of the ballots and shall  canvass  the  votes lawfully  cast.  The  canvass  shall  proceed  from  day  to day and the inspectors, or a majority thereof,  shall  certify  the  result  to  the company  and  to  the  superintendent  as  soon as it is completed. Such certificate shall be subscribed and affirmed by such inspectors as  true under  the  penalties of perjury. Unless contested by the superintendent or other qualified person  pursuant  to  paragraph  twelve  hereof,  the results  so  certified shall be decisive. The superintendent may require  the inspectors to report for determination by  him  any  questions  upon which they may disagree.  (9) Representatives designated by a majority of each three persons who shall  have  been  appointed as aforesaid to receive proxies to be voted for tickets nominated for such contested election,  in  such  number  as shall  be  approved  by  the  superintendent,  may be present during the casting, verification and canvass of the votes. The compensation of such representatives shall not be a charge upon or paid from the funds of the company.  (10) All ballots and proxies received by the  inspectors  of  election shall immediately upon the completion of the canvass be placed in sealed packages  and  shall be preserved by the said inspectors for a period of four months, subject to the order of any court  having  jurisdiction  of any  proceedings  relating thereto. The necessary expenses of preserving such ballots and proxies shall be paid by the company as a part  of  the expenses of such election.  (11)  The  superintendent shall have power to supervise and direct the methods and procedure of any such contested election  and  to  make  all further   needful   rules  and  regulations  concerning  the  same.  The superintendent shall prescribe the method of distribution of ballots and proxies to policyholders, qualified to vote at such  election,  who  are not  included  in  such  list  or  card  catalogue,  and shall prescribe reasonable rules and regulations for the casting of such ballots and the exercise of such proxies. All bills for or on account of the  custodians of  ballots  and inspectors of election, their employees, assistants and other necessary expenses or disbursements, during the  conduct  of  such contested  election,  and the canvass of the votes, shall be approved by the superintendent before payment by the company.  (12) Any such contested election and the conduct thereof shall at  all times,  on  petition  of  the superintendent or of any person or persons qualified with respect to any procedure or right  therein  which  is  in question, be subject to the supervision and control of the supreme court in  the  judicial district in which such company has its home office, in like manner as elections for state, county and  municipal  officers,  so far as analogous thereto.  (l) The inclusion by any such company of the name of any person in any list of policyholders required by this section shall not be construed as an  admission  by  the company of the validity of any policy or contract and no such list shall be competent evidence against the corporation  in any  action  or  proceeding in which the question of the validity of any policy or contract or of any claim under it is involved.  (m) (1) No insurance  company,  and  no  officer,  agent  or  employee thereof  shall  knowingly  omit,  from any list or card catalogue herein required to be filed, the  name  of  any  policyholder  required  to  be included  therein,  or shall knowingly omit to give the correct name and address of such policyholder, or shall knowingly give a  wrong  address, or  shall  expend,  advance or lend any money of the company contrary to the provisions of this section.  (2) Except where such expenditure is otherwise authorized or  required by this section, no money of the company shall be expended in connection with  any  such  election  or  in canvassing therefor, and no officer or agent of the company shall directly or indirectly make  any  advance  or loan  of such moneys to any person in connection with or for the purpose of such election or canvass unless the  expenditure  or  loan  is  in  a contested election and shall be limited to reasonable amounts authorized by  the board of directors of the company and approved in advance by the superintendent.  (3) No officer, salaried agent or employee of any such company  shall, within  the  period  between  the  filing  of  the  nominations  and the election, during business hours, devote any of his  time  to  soliciting votes  in  support  of  or  in  opposition  to  any candidate or list of candidates  in  connection  with  any  such  election  of  directors. No officer, agent or employee of any such company shall  compel  or  coerce any  other  such  officer,  agent  or  employee to support, work for, or oppose any candidate or any list of candidates. Neither  the  stationery or  supplies of any such company nor office space devoted to the conduct of its business shall be used for furthering the interest of any  ticket or  candidate  at  any election of directors. Notwithstanding the above, the company may utilize the time  of  officers,  employees  and  agents, office  space,  stationery  and supplies in circumstances where money of the  company  may  be  expended  pursuant  to  paragraph  two  of   this subsection,  but  no officer, employee or agent shall in connection with any election be coerced to undertake activity outside the scope  of  the duties of the position of such officer, employee or agent.  (4)  No  person,  firm  or  corporation,  whether  connected with such company or otherwise, shall issue or cause to be issued any circular  or other  written  or  printed  communication,  either  in  behalf of or in opposition to any ticket or any candidate for election  as  director  of such company which contains any false statement.  (5)  No policyholder shall sell or offer to sell any vote or proxy for any sum of money or anything of value. No agent shall be paid or receive any sum of money or anything of value in connection with the voting of a ballot or obtaining of a proxy.  (n) In addition  to  the  procedures  described  in  this  section,  a domestic  mutual  life  insurance  company  may,  upon  approval  of the superintendent, offer policyholders alternate methods of  voting  in  an uncontested  election and receiving materials related thereto, including via electronic means. The superintendent may approve such methods if  he or  she  finds that they are consistent with the requirements of law and equitable  and  reasonable  for   the   company's   policyholders.   The superintendent  may  issue such rules and regulations as he or she deems necessary to implement the provisions of this subsection.