2023 New York Laws › ISC - Insurance › Article 12 - Organization and Corporate Procedure › 1211 - Mutual Insurance Corporations; Membership and Dividends.

§  1211.  Mutual insurance corporations; membership and dividends. (a)
Every  domestic  mutual  insurance  corporation  shall   be   organized,
maintained  and  operated  for the benefit of its members as a non-stock
corporation. Every policyholder shall be a member  of  such  corporation
and  shall,  except as provided in subsection (d) hereof, be entitled to
vote at any regular or special meeting of such  corporation,  to  notice
thereof  pursuant  to  the  by-laws  and to share equitably in dividends
declared by the board of directors. The board of directors may,  subject
to  limitations  in  this  chapter, from time to time declare a dividend
from the corporation's surplus. No dividend shall be declared or paid if
thereby  the  company's  minimum  or  other  required  surplus  will  be
impaired.  In  declaring  and paying any dividend the board of directors
may make reasonable classifications of policies, and shall  declare  and
pay  such  dividend  in  a  manner  that  is  fair  and equitable to the
policyholders. Unless otherwise provided in the corporation's charter or
by-laws, each member shall be entitled to one vote  at  any  regular  or
special  meeting.  The  charter or by-laws may, with the approval of the
superintendent, provide for distribution of voting power  among  members
on  the  basis of the amount of insurance held, number of policies held,
amount of premiums paid by them or on any other basis the superintendent
finds fair and equitable.
(b) A member of any such corporation may vote at any such  meeting  in
person  or by proxy. No proxy or power of attorney given by him, to vote
at any meeting of such corporation, shall be valid  or  effective  after
the  next  meeting.  No  person  shall  directly  or  indirectly sell or
purchase, or offer to sell or purchase, any proxy or power  of  attorney
to vote at any such meeting, nor shall any person directly or indirectly
give  or  receive,  or  offer  to give or receive, any proxy or power of
attorney to vote at any such meeting as an inducement to the negotiation
or making of a contract of insurance or  any  renewal  thereof,  to  the
settlement  of  any  claim  thereunder,  or  to  any  other act relating
thereto.
(c) All corporations, their  directors  and  representatives  and  all
persons,  firms or corporations holding property in trust may insure the
same in mutual insurance corporations and by so  doing  such  directors,
representatives  or  trustees,  in  their  representative  capacity, may
assume the liabilities and be entitled to the rights of a member of such
insurer, but shall not be personally liable  as  individuals  upon  such
contract of insurance.
(d)  The  provisions  of this section as to members' voting rights and
the election of directors shall not apply to any  domestic  mutual  life
insurance  company  governed  by the provisions of section four thousand
two hundred ten of this chapter, nor shall they require any such company
to hold a meeting of its members.
(e) As to any surety or fidelity bond or like obligation executed by a
mutual property/casualty insurance company as a surety or guarantor, the
principal, and not the obligee, shall be a member of such corporation.