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2023 Oklahoma Statutes › Title 36. Insurance › §36-2042. Stay of other proceedings - Judgments may be set aside.

All proceedings in which the insolvent insurer is a party in any court in this state shall be stayed one hundred eighty (180) days from the date an order of liquidation, rehabilitation or conservation is final to permit proper legal action by the Oklahoma Life and Health Insurance Guaranty Association on any matters germane to its powers or duties. As to judgment under any decision, order, verdict or finding based on default, the Association may apply to have the judgment set aside by the same court that made the judgment and shall be permitted to defend against the suit on the merits.
Added by Laws 1981, c. 133, § 22. Amended by Laws 2010, c. 145, § 6, eff. Nov. 1, 2010.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2101. Scope of article.

A. This article shall apply to domestic stock insurers and domestic mutual insurers only except that it shall not apply to farmers' mutual fire insurance associations organized under Article 28 of this Code, to any association organized under the supervision or by authority of any legally incorporated Grange Order of Patrons of Husbandry, or to the Oklahoma State Union of the Farmer's Educational and Cooperative Union of America, when such association is formed for the mutual benefit of the members of such order or orders exclusively.
Subsection B of Section 2115 and subsection C of Section 2119 of this article shall apply also to foreign and alien mutual insurers.
B. Any domestic stock or mutual insurer which as of April 1, 1957, had duly filed its articles of incorporation and was lawfully in process of completing its organization, shall complete its organization according to such procedures as were provided by laws in force immediately prior to the effective date of this Code.
Any other domestic stock or mutual insurer in process of organization on the effective date of this Code shall be governed by such provisions of this article as the Insurance Commissioner deems to be practicably applicable, and otherwise according to laws in force immediately prior to such effective date.
C. Existing domestic stock and mutual insurers are governed by the applicable provisions of this article.
Laws 1957, p. 303, § 2101.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2105. Articles of incorporation; contents.

A. This section applies to stock and mutual insurers hereafter incorporated in Oklahoma.
B. Five or more individuals of age of twenty-one (21) years or more may incorporate a stock insurer; ten or more such individuals may incorporate a mutual insurer. Not less than two-thirds (2/3) of the incorporators shall be citizens of the United States residing in Oklahoma. The articles of incorporation shall be signed and acknowledged by the incorporators as deeds are required to be acknowledged.
C. The articles of incorporation shall state:
1. The name of the corporation; if a mutual, the word "mutual" shall be a part of the name;
2. The duration of its existence, which may be perpetual;
3. The kinds of insurance the corporation is formed to transact, according to the definitions thereof in this Code;
4. If a stock corporation, its authorized capital, the classes and number of shares into which divided, the par value of each such share, and the respective rights of each such class. Shares without par value shall not be authorized;
5. If a mutual corporation, the maximum contingent liability of its members, other than as to nonassessable policies, for payment of losses and expenses incurred, which liability shall be as stated in the articles of incorporation but not less than one nor more than six times the premium for the member's policy at the annual premium rate for a term of one (1) year;
6. The number of directors, of which there shall be not less than three nor more than fifty, who shall conduct the affairs of the corporation, and the names and addresses of the corporation's first directors and officers for stated terms of office of not less than two (2) months nor more than one (1) year; provided, however, that the Insurance Commissioner may approve amended articles of incorporation for a domestic insurer to permit the board of directors to consist of three or more directors;
7. The city or town in Oklahoma in which is to be located the principal place of business, and the counties, states, and countries in which business may be transacted;
8. The limitations, if any, on the corporation's indebtedness;
9. If a stock corporation, the extent, if any, to which stock of the corporation shall be liable to assessment;
10. Such other provisions, not inconsistent with law, as deemed appropriate by the incorporators;
11. The names and addresses of the incorporators; and
12. The name and address of the person in Oklahoma upon whom all process in any action or proceeding may be served. Such designation may be changed or amended on authority of the Board of Directors evidenced by the filing of a certificate stating such change, executed by the President, attested by the Secretary, and filed with the Insurance Commissioner.
Added by Laws 1957, p. 304, § 2105. Amended by Laws 1997, c. 273, § 5, eff. July 1, 1997; Laws 1997, c. 418, § 91, eff. Nov. 1, 1997.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2106. Corporate powers granted; general powers and duties.

Every corporation organized under the provisions of this act may, in its corporate name, sue and be sued; and shall have power to make contracts of insurance, indemnity or suretyship with any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee or fiduciary in this state or elsewhere; to prescribe the qualifications and the manner and form of the admission or withdrawal of members; to have and use a common seal which may be changed or altered at pleasure; to be capable in its corporate name, or in the name of trustee chosen by the board of directors, to take, purchase, lease, hold and dispose of real or personal property for carrying into effect the purpose of the corporation; to make all necessary rules and regulations concerning the hazards incurred, the premium rates to be used, and adjustment and payment of losses; to fix the compensation of its directors and officers and require bond for the faithful performance of their duties; to exercise all such other powers as may be necessary to effect the object of such corporation, subject to the restrictions herein provided; to make or amend bylaws not inconsistent with law or the provisions of the articles of association, which bylaws shall fix the date and place of the annual meeting of members, shall designate the number of directors, which shall be not less than five, define the duties of the officers and fix the term of office of the directors and officers of such company, and make all further necessary provisions concerning the conduct of its business or affairs.
Laws 1957, p. 304, § 2106.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2107. Filing of articles; issuance of certificate.

A. The articles of incorporation shall be filed in the office of the Secretary of State, and certified copies thereof shall be filed with the Insurance Commissioner. Articles of incorporation shall be approved by the Insurance Commissioner before they are filed in the office of the Secretary of State. After January 1, 1970, the Insurance Commissioner shall not approve or renew any articles of incorporation which provide for the issuance of shares of common capital stock to any shareholder unless such shareholder shall be entitled at the shareholders meetings to one vote for each share standing in the name of such shareholder in the books of the corporation.
B. Upon completion of such filing as to the articles of incorporation, the Secretary of State shall issue to the corporation a certificate of incorporation. Such corporation shall not transact business as an insurer until it has applied for and received from the Commissioner a certificate of authority as provided by this Code.
Laws 1957, p. 305, § 2107; Laws 1969, c. 289, § 2; Laws 1970, c. 109, § 2, emerg. eff. April 1, 1970.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2108. Amendment of articles.

A. The articles of incorporation of a stock insurer increasing or reducing authorized capital or for other purposes may be amended in accordance with the general laws of Oklahoma applying to corporations formed for profit. No amendment shall reduce authorized capital below the amount required by this Code for the kinds of insurance thereafter to be transacted.
B. The articles of incorporation of a mutual insurer may be amended by the affirmative vote of two-thirds (2/3) of its members present in person or by proxy at a regular or special meeting of members of which notice in writing setting forth the proposed amendment was mailed to all members at least thirty (30) days in advance. A certificate of the amendments, signed and acknowledged by the president and attested by the secretary of the corporation shall be filed with the Commissioner and the Secretary of State.
Laws 1957, p. 305, § 2108.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2109. Applications for insurance in formation of mutual insurers.

A. Upon issuance of its certificate of incorporation as provided in subsection B of Section 2107 of this article, the directors and officers of a domestic mutual corporation formed for the purpose of becoming a mutual insurer may open books for the registration of such requisite applications for insurance policies as they may accept, and may receive deposits of premiums thereon.
B. All such applications shall be in writing signed by the applicant, covering subjects of insurance resident, located, or to be performed in Oklahoma.
C. All such applications shall provide that:
1. Issuance of the policy is contingent upon completion of organization of the insurer and issuance to it of a proper certificate of authority.
2. No insurance is provided until the certificate of authority has been so issued; and
3. The prepaid premium or deposit, and membership or policy fee, if any, shall be refunded in full to the applicant if the organization is not completed and certificate of authority issued before a specified reasonable date, which date shall be not later than one (1) year following date of issuance of the certificate of incorporation.
D. All qualifying premiums collected shall be in cash.
E. Solicitation for such qualifying applications for insurance shall be by licensed agents of the corporation, and the Commissioner shall upon application therefor issue temporary agent's licenses expiring on the date specified pursuant to paragraph 3, subsection B, above, to individuals appointed by the corporation and qualified as for a resident agent's license except as to the taking of an examination. The Commissioner may suspend or revoke any such license for any of the same causes and pursuant to the same procedures as are applicable to suspension or revocation of licenses of agents in general under article 13.
Laws 1957, p. 305, § 2109; Laws 1965, c. 60, § 15, eff. July 1, 1965.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2110. Formation of mutuals; trust deposit of premiums; issuance of policies.

A. All sums collected by a domestic mutual corporation as premiums and fees on qualifying applications for insurance therein shall be deposited in trust in an Oklahoma bank or trust company under a written agreement consistent with this section and with paragraph 3 of subsection C of Section 2109 of this article. The corporation shall file an executed copy of such trust agreement with the Commissioner.
B. Upon issuance to the corporation of a certificate of authority as an insurer for the kind of insurance for which such applications were solicited, all funds so held in trust shall become the funds of the insurer, and the insurer shall forthwith issue and deliver its policies for which premiums had been paid and accepted. The insurance provided by such policies shall be effective as of the date of the certificate of authority.
Laws 1957, p. 306, § 2110.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2111. Initial qualification, domestic mutuals.

When newly organized, a domestic mutual insurer may be authorized to transact any one or more kinds of insurance other than title insurance. When applying for an original certificate of authority as an insurer, a domestic mutual insurer must be otherwise qualified therefor under this code, must possess and maintain the minimum requirements for surplus in regard to policyholders as set forth in Sections 610 and 611 of this code, and must have received and accepted bona fide applications with respect to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted, must have collected in full and in cash the proper premium therefor at a rate substantially equal to that usually charged by stock insurers for comparable coverages, must have surplus funds on hand as at completion of issuance of all such policies so applied for, or, in lieu of such applications, premiums, and surplus, may deposit surplus, all in accordance with the requirements set forth in Sections 610 and 611 of this code.
Laws 1957, p. 306, § 2111; Laws 1980, c. 185, § 5, eff. Oct. 1, 1980.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2112. Additional kinds of insurance, mutual.

A domestic mutual insurer after being authorized to transact one kind of insurance shall be authorized by the Insurance Commissioner to transact such additional kinds of insurance as are authorized under Section 609 of Article 6 and upon otherwise qualifying therefor and depositing and thereafter maintaining on deposit with the State Treasurer through the Insurance Commissioner unimpaired surplus funds in amount not less than the amount of capital required of a domestic stock insurer transacting like kinds of insurance, and subject further to the additional surplus requirements of Section 611 of Article 6 if applicable (expendable additional surplus in amount of one-half (1/2) of required surplus if it qualifies to transact more than one kind of insurance within first five (5) years).
Laws 1957, p. 307, § 2112.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2113. Bylaws of mutual.

A. The initial board of directors of a domestic mutual insurer shall adopt original bylaws for the government of the corporation and conduct of its business. Such bylaws shall be subject to the approval of the insurer's members at the next succeeding annual meeting of members, and no bylaw provision shall thereafter be effective which is not so approved. Bylaws shall be revoked or modified only by two-thirds (2/3) favorable vote of the insurer's members voting either in person or by proxy at a meeting of which notice was given as provided in the bylaws.
B. The bylaws shall provide that each member of the insurer is entitled to one vote in the election of corporate directors and on all matters coming before membership meetings, and that such vote may be exercised in person or by proxy.
C. The insurer shall promptly file with the Commissioner a copy, certified by the insurer's secretary, of such bylaws and of every modification thereof or of addition thereto. The Commissioner shall disapprove any bylaw provision deemed by him to be unlawful. The insurer shall not, after receiving written notice of such disapproval and during the existence thereof, effectuate any bylaw provision so disapproved; provided, however, such disapproval shall constitute an order from which an appeal will lie, and such appeal may be perfected in such manner as is provided by this Code.
Laws 1957, p. 307, § 2113.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2114. Quorum, members of mutual.

A domestic mutual insurer may in its bylaws adopt a reasonable provision for determining a quorum of members at any meeting thereof, but no provisions recognizing a quorum of fewer than a simple majority of all the insurer's members present either in person or by proxy shall be effective unless approved as reasonable by the Insurance Commissioner. This section shall not affect any other provision of law requiring vote of a larger percentage of members for a specified purpose.
Laws 1957, p. 307, § 2114.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2115. Membership in mutuals.

A. Each holder of one or more insurance policies or contracts issued by a domestic mutual insurer, other than a contract or reinsurance, is a member of the insurer with all the rights and obligations of such membership, and each such policy or contract so issued shall so specify.
B. Any person, government or governmental agency, state or political estate, trustee or fiduciary may be a member of a domestic, foreign or alien mutual insurer.
C. The insurer shall be entitled to charge and collect initial membership and/or policy fees, in addition to the premiums.
Laws 1957, p. 307, § 2115.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2119. Nonassessable policies, mutual insurers.

A. While it maintains on deposit with the State Treasurer through the Insurance Commissioner surplus funds in amount not less than the paid-in capital required of a domestic stock insurer transacting like kinds of insurance, a domestic mutual insurer may extinguish the contingent liability of its members as to all policies in force, and may omit provisions imposing contingent liability in all its policies currently issued.
B. When such surplus funds have been so deposited and the Commissioner has so ascertained, he shall issue to the insurer at its request his certificate authorizing such extinguishment and omission of contingent liability.
C. A foreign or alien mutual insurer may issue nonassessable policies to its members in this state in accordance with its charter and the laws of its domicile, provided the standards and requirements of the laws of the state of such domicile with respect to the issuance of nonassessable policies are substantially equivalent to or higher than the legal requirements in Oklahoma.
Laws 1957, p. 308, § 2119.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2120. Nonassessable policies - revocation of authority.

A. The Insurance Commissioner shall revoke the authority of a domestic mutual insurer to issue policies if at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority, or if the insurer, by resolution of its board of directors approved by a majority of its members, requests that the authority be revoked.
B. Policyholders, members or subscribers of a mutual insurer shall at no time be liable for assessment on policies by such insurer. Henceforth, no policies shall be issued or renewed by a domestic mutual insurer which contain provisions for assessment or contingent liability of an insured, member or subscriber.
Laws 1957, p. 308, § 2120; Laws 1981, c. 112, § 2.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2121. Participating policies.

A. If so provided in its articles of incorporation, a domestic stock or domestic mutual insurer may issue any or all of its policies with or without participation in profits, savings, or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis, and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not unfairly discriminate as between policyholders within the same such classification. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.
B. No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.
Laws 1957, p. 309, § 2121.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2122. Dividend to stockholders.

A. A domestic stock insurer shall not pay any ordinary cash dividend to stockholders except out of that part of its available surplus funds which is derived from realized net profits on its business. The restriction shall apply to all extraordinary dividends, as defined in Section 1655 of this title.
B. A stock dividend may be paid out of any available surplus funds in excess of the aggregate amount of surplus loaned to the insurer pursuant to Section 2125 of this article.
C. A dividend otherwise proper may be payable out of the insurer's earned surplus even though its total surplus is then less than the aggregate of its past contributed surplus resulting from issuance of its capital stock at a price in excess of the par value thereof.
Added by Laws 1957, p. 309, § 2122. Amended by Laws 1988, c. 148, § 1, eff. Nov. 1, 1988; Laws 2000, c. 353, § 14, eff. Nov. 1, 2000.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2123. Dividends to mutual policyholders.

A. The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus which is in excess of its required minimum surplus.
B. A dividend otherwise proper may be payable out of such savings and earnings even though the insurer's total surplus is then less than the aggregate of its contributed surplus.
Laws 1957, p. 309, § 2123.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2124. Illegal dividends - penalty.

A. Any director of a domestic stock or mutual insurer who votes for or concurs in declaration or payment of an illegal dividend to stockholders or members shall upon conviction thereof be guilty of a misdemeanor, and shall be jointly and severally liable, together with other such directors, for any loss thereby sustained by the insurer.
B. The stockholders or members receiving such an illegal dividend shall be liable in the amount thereof to the insurer.
C. The Insurance Commissioner may revoke or suspend the certificate of authority of an insurer which has declared or paid an illegal dividend.
Laws 1957, p. 309, § 2124.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2125. Borrowed surplus.

A. A domestic stock or mutual insurer may borrow money to defray the expenses of its organization, provide it with surplus funds, or for any purpose required by its business, upon a written agreement that such money is required to be repaid only out of the insurer's surplus in excess of that stipulated in such agreement. The form of the agreement must be submitted for approval to theCommissioner to assure it is consistent with the requirements of this section. If such agreement is not approved or disapproved by the Commissioner within fifteen (15) days after the date of its filing, it shall be deemed approved. The agreement may provide for interest at the rate agreed upon, but not exceeding a rate of interest approved by the Insurance Commissioner, which interest shall or shall not constitute a liability of the insurer as to its funds other than such excess of surplus, as stipulated in the agreement. Repayment of such loan shall not be made unless it is approved in advance by the Commissioner. Such repayment shall be deemed approved unless within fifteen (15) days after the date of such filing the insurer is notified in writing of the Commissioner's disapproval and the reasons therefor.
B. Money so borrowed, together with the interest thereon if so stipulated in the agreement, shall not form a part of the insurer's legal liabilities except as to its surplus in excess of the amount thereof stipulated in the agreement, or be the basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount thereof then unpaid together with any interest thereon accrued but unpaid.
C. If a domestic mutual insurer, the insurer in advance of any such loan shall file with the Insurance Commissioner a statement of the purposes of the loan and a copy of the proposed loan agreement, which shall be subject to the approval of the Commissioner. The loan and agreement shall be deemed approved unless within fifteen (15) days after date of such filing the insurer is notified in writing of the Commissioner's disapproval and the reasons therefor. The Commissioner shall so disapprove any such proposed loan or agreement if he finds that the loan is reasonably unnecessary or excessive for the purpose intended, or that the terms of the loan agreement are not fair and equitable to the parties, and to other similar lenders, if any, to the insurer, or that the information so filed by the insurer is inadequate, specifying the respects in which it is so inadequate.
D. Any such loan to a mutual insurer or substantial portion thereof shall be repaid by the insurer out of earned surplus when no longer reasonably necessary for the purpose originally intended. No repayment of such a loan shall be made by a mutual insurer unless in advance approved by the Commissioner.
E. This section shall not apply to loans obtained by the insurer in ordinary course of business from banks and other financial institutions, nor to loans secured by pledge of assets.
Amended by Laws 1983, c. 99, § 3, emerg. eff. May 9, 1983.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2127. Management and exclusive agency contracts.

A. No domestic stock or mutual insurer shall make any contract whereby any person or persons is granted or is to enjoy in fact the management of the insurer, or to have the controlling or preemptive right to produce substantially all insurance business for the insurer for an amount which will equal or exceed five percent (5%) of the insurer's net written premium, unless such contract is filed with the Commissioner and be subject to his approval. The contract shall be deemed approved unless disapproved by the Commissioner within twenty (20) days after date of filing, subject to such reasonable extension of time as the Commissioner may require by notice given within such twenty (20) days. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor.
B. The Commissioner shall disapprove any such contract if he finds that it:
1. Subjects the insurer to excessive charges; or
2. Is to extend for an unreasonable length of time; or
3. Does not contain fair and adequate standards of performance; or
4. Contains other inequitable provisions or provisions which impair the proper interests of stockholders or members of the insurer.
Amended by Laws 1983, c. 99, § 5, emerg. eff. May 9, 1983; Laws 1986, c. 251, § 36, eff. Nov. 1, 1986.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2128. Impairment of capital or assets.

A. If the capital stock or expendable surplus of a domestic stock insurer is impaired to an extent of less than twenty percent (20%) of the required capital stock or expendable surplus, or the net surplus of a domestic mutual insurer is impaired to an extent of less than twenty percent (20%) of the minimum amount of surplus required of it by this Code for authority to transact the kinds of insurance being transacted, the Commissioner shall serve notice upon the insurer to make good the deficiency within sixty (60) days after service of such notice.
B. The deficiency may be made good in cash or in assets eligible under this code for the investment of the insurer's funds; or if a stock insurer by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only such kind or kinds of insurance for which the insurer has on deposit sufficient surplus.
C. If the deficiency is not made good and proof thereof filed with the Commissioner within such sixty-day period, the insurer shall be deemed insolvent and the Commissioner may institute delinquency proceedings against it as authorized by this code. If such deficiency exists because of increased loss reserves required by the Insurance Commissioner, or because of disallowance by the Commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the Commissioner may in his discretion and upon application and good cause shown, extend for not more than an additional sixty (60) days the period within which such deficiency may be so made good and such proof thereof so filed.
D. If the Commissioner finds that the capital stock or expendable surplus of a domestic stock insurer is impaired to an extent of more than twenty percent (20%) of the required capital stock or expendable surplus, or that the net surplus of a domestic mutual insurer is impaired to an extent of more than twenty percent (20%) of the minimum amount of surplus required of it by this code for authority to transact the kinds of insurance being transacted, the insurer shall be deemed insolvent and the Commissioner shall forthwith institute delinquency proceedings.
Laws 1957, p. 311, § 2128.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2129. Mutualization of stock insurer.

A. A domestic stock insurer other than a life or title insurer may become a domestic mutual insurer pursuant to such plan and procedure as may be approved in advance by the Insurance Commissioner.
B. The Commissioner shall not approve any such plan, procedure, or mutualization unless:
1. It is equitable to both stockholders and policyholders;
2. It is subject to approval by a vote of the holders of not less than three-fourths (3/4) of the insurer's capital stock having voting rights and by a vote of not less than two-thirds (2/3) of the insurer's policyholders who vote on such plan in person, by proxy or by mail pursuant to such notice and procedure as may be approved by the Commissioner;
3. Mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair market value thereof as determined by competent disinterested appraisers;
4. The plan provides for the purchase of the shares of any nonconsenting stockholder in accordance with the provisions of the Oklahoma General Corporation Act, and such nonconsenting stockholders shall have all the rights and restrictions applicable under said act to stockholders of a private corporation who do not consent to the agreed manner of converting the shares of stock of such private corporation upon proposal for consolidation;
5. The plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective; and
6. The mutualization leaves the insurer with surplus funds reasonably adequate for the security of its policyholders and to continue successfully in business in the states in which it is then authorized to transact insurance, and for the kinds of insurance included in its certificate of authority.
C. This section shall not apply to mutualization under order of court pursuant to rehabilitation or reorganization of an insurer under Article 18, (Rehabilitation and Liquidation).
Amended by Laws 1986, c. 292, § 159, eff. Nov. 1, 1986.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2130. Converting mutual insurer.

A. A domestic mutual insurer may become a domestic stock insurer pursuant to such plan and procedure as is approved in advance by the Insurance Commissioner.
B. The Commissioner shall not approve any such plan or procedure unless:
1. Equitable to the insurer's members;
2. Subject to approval by vote of not less than three-fourths (3/4) of the insurer's current members voting thereon in person, by proxy, or by mail at a meeting of members called for the purpose pursuant to such notice and procedure as may be approved by the Commissioner;
3. The equity of each policyholder in the insurer is determinable under a fair formula approved by the Commissioner, which such equity shall be based upon not less than the insurer's entire surplus (after deducting contributed or borrowed surplus funds) plus a reasonable present equity in its reserves and in all nonadmitted assets;
4. The policyholders entitled to participate in the purchase of stock or distribution of assets shall include all current policyholders and all existing persons who had been a policyholder of the insurer within three (3) years prior to the date such plan was submitted to the Commissioner;
5. The plan gives to each policyholder of the insurer as specified in paragraph 4 of this subsection, a preemptive right to acquire his proportionate part of all of the proposed capital stock of the insurer, within a designated reasonable period, and to apply upon the purchase thereof the amount of his equity in the insurer as determined under paragraph 3, above;
6. Shares are so offered to policyholders at a price not greater than to be thereafter offered to others nor at more than double the par value of such shares;
7. The plan provides for payment to each policyholder not electing to apply his equity in the insurer for or upon the purchase price of stock to which preemptively entitled, of cash in the amount of not less than fifty percent (50%) of the amount of his equity not so used for the purchase of stock, and which cash payment together with stock so purchased, if any, shall constitute full payment and discharge of the policyholder's equity as an owner of such mutual insurer; and
8. The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a domestic stock insurer transacting like kinds of insurance, together with surplus funds in amount not less than one-half (1/2) of such required capital.
Laws 1957, p. 312, § 2130.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2132. Reinsurance, stock insurers.

A. A domestic stock insurer may accept reinsurance for the same kind of insurance and within the same limits as it is authorized to transact direct, unless such reinsurance is prohibited by its articles of incorporation.
B. A domestic stock insurer may reinsure all or substantially all its business in force, or substantially all of a major class thereof, with another insurer by an agreement of bulk reinsurance; but no such agreement shall become effective unless filed with and approved in writing by the Commissioner.
C. The Commissioner shall approve such agreement within a reasonable time after such filing unless the Commissioner finds that the agreement would substantially reduce the protection or service to the policyholders of the insurer. If the Commissioner does not approve the agreement, he shall so notify the insurer in writing specifying his reasons therefor.
Amended by Laws 1988, c. 55, § 1, eff. Nov. 1, 1988.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2133. Mergers and consolidations, mutual insurers.

A. A domestic mutual insurer shall not merge or consolidate with a stock insurer.
B. A domestic mutual insurer may merge or consolidate with another mutual insurer in accordance with procedures prescribed by general laws applying to corporations formed for profit, except as hereinbelow provided.
C. The plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds (2/3) of the members of each mutual insurer involved voting thereon at meetings called for the purpose pursuant to such reasonable notice and procedure as has been approved by the Commissioner.
D. No such merger or consolidation shall be effectuated unless in advance thereof the plan and agreement therefor have been filed with and approved in writing by the Insurance Commissioner. The Commissioner shall give such approval within a reasonable time after such filing unless he finds such plan or agreement:
1. Inequitable to the policyholders of any domestic insurer involved; or
2. Would substantially reduce the security of and service to be rendered to policyholders of the domestic insurer in Oklahoma or elsewhere.
E. If the Commissioner does not approve such plan or agreement, he shall so notify the insurer in writing, specifying his reasons therefor.
Laws 1957, p. 313, § 2133.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2134. Reinsurance, mutual insurers.

A. A domestic mutual insurer may accept reinsurance for the same kinds of insurance and within the same limits as it is authorized to transact direct unless such reinsurance is prohibited by its articles of incorporation.
B. A domestic mutual insurer may reinsure all or any part of its business in force, or all or any part of a major class thereof, with another insurer, stock or mutual, by an agreement or reinsurance treaty. Any reinsurance of all its business or all of a major class of its business shall be subject to the approval of the Insurance Commissioner.
Laws 1957, p. 313, § 2134.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2135. Mutual member's share of assets on liquidation.

A. Upon any liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness, policy obligations, repayment of contributed or borrowed surplus, if any, and expenses of administration, shall be distributed to existing persons who were its members at any time within thirty-six (36) months next preceding the date such liquidation was authorized or ordered, or date of last termination of the insurer's certificate of authority, whichever date is the earliest.
B. The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of his membership bear to the aggregate of all premiums so earned on the policies of all such members. The insurer may make a reasonable classification of its policies so held by such members and a formula based upon such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the approval of the Commissioner.
C. Subsections A and B above shall not apply to any mutual which, prior to July 1, 1957, has provided for any other method of liquidation through its articles and bylaws, and which have been approved by the then Insurance Commissioner.
Laws 1957, p. 313, § 2135.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2202. Definitions.

As used in the Oklahoma Medical Professional Liability Trusts Act:
1. “Allied health care professional” shall mean a physician’s assistant, a certified registered nurse anesthetist or a nurse practitioner who is duly licensed by the appropriate licensing entity of the state and is supervised or employed by a physician and/or health care institution;
2. “Association” shall mean a nonprofit corporation that has been in continuous existence for a period of at least ten (10) years, the purpose of which is to federate into one organization all duly licensed physicians, allied health care professionals and/or health care institutions in this state;
3. “Commissioner” shall mean the Insurance Commissioner;
4. “Department” shall mean the Insurance Department;
5. “Health care institutions” shall mean hospitals, outpatient treatment facilities and facilities licensed pursuant to the Nursing Home Care Act;
6. “Medical professional liability claim” shall mean a claim or cause of action against a physician and/or a health care institution for treatment, lack of treatment, or other claimed departure from accepted standards of health care or safety which proximately results in injury to or death of the patient, whether the patient’s claim or cause of action sounds in tort or contract;
7. “Physician” shall mean a doctor of medicine or osteopathy legally authorized to practice medicine and surgery in this state;
8. “Insureds” shall mean the physician, allied health care professional and health care institution members of an association that have medical professional liability coverage through the trust. “Insureds” shall also include entities and individuals specified in subsection C of Section 60 of this act if authorized by the trust; and
9. “Trust” shall mean a medical professional liability trust created pursuant to the Oklahoma Medical Professional Liability Trusts Act.
Added by Laws 2004, c. 368, § 59, eff. July 1, 2004.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2205. Trust instrument – Mandatory provisions.

In addition to the requirements of Section 60 of this act, the trust instrument shall provide:
1. That there shall be a minimum period during which any insured must participate in the trust;
2. That all insureds shall execute a participation agreement;
3. That the trustee shall be an individual or an institution such as a bank, insurance company or other appropriate entity;
4. A preliminary assessment of all insureds for initial expenses necessary to commence operation;
5. For establishment of necessary facilities;
6. Details of the management of the trust;
7. Procedures for assessment of all insureds to defray losses and expenses;
8. Description of commission arrangements;
9. Description of reasonable and objective underwriting standards;
10. Procedures for and description of acceptance and cession of reinsurance;
11. Procedures for and descriptions of appointment of servicing carriers or other servicing arrangements; and
12. Procedures for determining amounts of insurance to be provided by the trust.
Added by Laws 2004, c. 368, § 62, eff. July 1, 2004.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2206. Minimum reserves and surplus.

The total of the reserves and surplus of a trust organized under the Oklahoma Medical Professional Liability Trusts Act, in excess of the amount necessary to support the trust’s retention, must equal or exceed forty percent (40%) of a range of values that makes reasonable provision for losses and loss expenses.
Added by Laws 2004, c. 368, § 63, eff. July 1, 2004.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2207. Guaranty funds – Membership or financial contribution to or benefit from.

No trust created pursuant to the Oklahoma Medical Professional Liability Trusts Act shall be permitted to join or contribute financially to any insurance insolvency guaranty fund or similar entity, nor shall any trust or its insureds receive any benefit from any insurance guaranty fund or similar entity for claims made against the trust or its insureds.
Added by Laws 2004, c. 368, § 64, eff. July 1, 2004.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2208. Duties of Commissioner – Review and evaluation – Study and analysis of cost of administration.

A. The Commissioner shall annually review negotiations between the trust and any entity to provide administrative, claim, underwriting or claim management services or excess insurance, aggregate excess insurance and reinsurance to the trust.
B. The Commissioner shall, at least twice yearly, review and evaluate each category of operations of the trust or association as follows:
1. Underwriting policies and activities, including all new applications for coverage, as well as all decisions regarding denial of new policies and surcharges on or nonrenewal of existing insureds;
2. Summaries of all claims activities, including number of claims filed, lawsuits filed, resolution of closed claims and lawsuits, amounts paid in settlements, jury verdicts, defense attorney fees, expert witness costs and other defense costs;
3. Consumer satisfaction with quality of service by the trust or its agents;
4. Investment activities;
5. All filed base rates and proposed rate increases; and
6. All risk-management activities, including continuing education and counseling of insureds.
C. The Commissioner shall further study and analyze the cost of administration of the trust to determine how its administrative costs compare to the administrative costs of other medical professional liability trusts and insurers providing medical liability coverage. The Commissioner shall submit a report of the Commissioner’s study to the Governor, the President Pro Tempore of the Senate and the Speaker of the House of Representatives no later than February 1 of each year.
D. The trust shall provide the Commissioner with policy changes, rate changes, rules proposed by the trust and changes to the trust instrument prior to implementation of policy changes, rate changes, proposed rules and changes to the trust instrument within thirty (30) days of implementation of such changes.
Added by Laws 2004, c. 368, § 65, eff. July 1, 2004.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2401. Mutual benefit associations legalized.

All associations or companies or corporations doing an assessment life, health or accident insurance business in this state on the first day of January, 1925, on the assessment or mutual benefit plan, known as group or circle associations, or otherwise, and defined in this article as mutual benefit associations, are, by this article, legalized, ratified and confirmed and said associations, companies or corporations may continue to do business in this state if they comply with this article through their charters and bylaws and they accept the conditions of and, in other respects, comply with the provisions thereof. The conditions of the validation of said associations, companies or corporations, and their authority to do business in this state under certain restrictions, are hereinafter prescribed.
Laws 1957, p. 314, § 2401.
2023 Oklahoma Statutes › Title 36. Insurance › §36-2407. Permit to do business; fee; filing of copies of certificates, application blanks and bylaws.

A. The Insurance Commissioner, upon the application of any mutual benefit association having the right to do business in this state, as provided in this article, shall issue to such association a permit in writing, authorizing such association to do business in this state until the last day of February following the date of issuance of the license, for which permit or certificate and all proceedings in connection therewith such association shall pay the said Insurance Commissioner the fees and licenses therefor stated in Section 321, Article 3 of this Code; provided, that the form of certificates to be issued, copy of application blanks, and a certified copy of the bylaws shall be filed with the Insurance Commissioner, and, if the same conforms to the charter of such association and the provisions of this article, the Insurance Commissioner shall approve the same.
B. No such association shall act as an insurer and no such association shall transact insurance in this state except as authorized by a subsisting authority granted to it by the Insurance Commissioner.
Laws 1957, p. 319, § 2407.