reglab/statecodes huggingface dataset:
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 203 - Articles and bylaws.

31A-5-203.
Articles and bylaws.
(1) The articles of incorporation requirements in Section 16-10a-202 apply to the articles of a stock corporation, except that:
(a) the name of the corporation shall comply with Sections 16-10a-401 and 31A-1-109 and the name of any new or renamed corporation shall include the word "insurance" or a term of equivalent meaning;
(b) authorized shares shall conform to Subsection 31A-5-305(1) and the capital provided for shall conform to Section 31A-5-211; and
(c) beginning on July 1, 1988, the purposes of the corporation are limited to those permitted by Section 31A-4-107.
(2) The articles of incorporation requirements in Section 16-6a-202, except Subsections 16-6a-202(1)(f) and (g), apply to the articles of a mutual except that:
(a) The name of the corporation shall comply with Sections 16-6a-401 and 31A-1-109 and the name of any new or renamed corporation shall include the words "mutual" and "insurance" or terms of equivalent meaning.
(b) If any mutual bonds are authorized, they shall comply with Subsection 31A-5-305(2)(a).
(c) The purposes of the corporation may not include doing a title insurance business, and shall be limited to those purposes permitted by Section 31A-4-107.
(d) If assessable policies are permitted, the articles shall contain provisions giving assessment liabilities and procedures, including a provision specifying the classes of business on which assessment may be separately levied.
(e) The articles may specify those classes of persons who may be policyholders, or prescribe the procedure for establishing or removing restrictions on the classes of persons who may be policyholders. The articles shall also state that each policyholder is a member of the corporation.
(3) Sections 16-10a-830 and 16-10a-831 apply to stock corporations and Section 16-6a-818 applies to mutuals. The articles or bylaws shall designate three or more principal offices the principal officers of the corporation shall hold. The principal offices shall be held by at least three separate natural persons.
(4) The bylaws of a domestic corporation shall comply with this chapter. A copy of the bylaws, and any amendments to them, shall be filed with the commissioner within 60 days after their adoption. Subject to this Subsection (4), Subsections 31A-5-204(2)(c) and (5), Subsection 31A-5-213(4), and Section 16-10a-206 apply to stock corporations and Section 16-6a-206 applies to mutuals.
Amended by Chapter 364, 2008 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 205 - Bond.

31A-5-205.
Bond.
(1) No organization permit may be issued until the commissioner receives from the applicants a bond of an authorized corporate surety, or a deposit of cash or approved securities under Section 31A-2-206. This bond or deposit shall be in an amount the commissioner determines is sufficient, but in no event may it be less than $20,000, nor more than $100,000. The bond or deposit shall be in favor of the state of Utah and of any subscribers and creditors of the applicant, for the payment of costs incurred by the state by reason of dissolution of the corporation before the issuance of a certificate of authority and for the payment of other debts incurred in the organizational period. The bond shall be discharged or the deposit returned upon issuance of the certificate of authority under Section 31A-5-212.
(2) This section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Enacted by Chapter 242, 1985 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 206 - Sale of securities by authorized insurer.

31A-5-206.
Sale of securities by authorized insurer.
A domestic insurer that has already received a certificate of authority may issue additional securities to obtain further financing, after obtaining a solicitation permit from the commissioner. The organizational permit requirements in Section 31A-5-204 apply if the commissioner prescribes its application. The phrase "organization permit" in Section 31A-5-204 means "solicitation permit" when being applied to this section. The solicitation permit terminates one year from the date of its issuance. However, this permit may be extended for not more than one additional year by the commissioner on terms he considers sufficient to protect the policyholders, the shareholders, and the public.
Amended by Chapter 95, 1987 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 207 - Powers under organization permit.

31A-5-207.
Powers under organization permit.
(1) While its organization permit is in effect a stock corporation may:
(a) register stock under Section 31A-5-302, solicit subscriptions subject to Section 16-10a-620, accept payment for the subscriptions in cash or, with the approval of the commissioner, in other property constituting a permitted investment under Chapter 18, Investments, and issue receipts for payments made at values approved by the commissioner, but no certificates for shares may be issued until a certificate of authority has been issued; and
(b) transact all other business necessary and appropriate in the organization of the planned insurance enterprise.
(2) While its organization permit is in effect a mutual may:
(a) register mutual bonds under Section 31A-5-302, solicit applications for qualifying insurance policies under Subsection 31A-5-211(5), solicit subscriptions for mutual bonds and contribution notes and accept payment for the subscriptions in cash or, with the approval of the commissioner, in property constituting a permitted investment under Chapter 18, Investments, and issue receipts for payments made at values approved by the commissioner, but no policies or bonds are effective or may be issued until a certificate of authority has been issued; and
(b) transact all other business necessary and appropriate in the organization of the planned insurance enterprise.
(3)
(a) The existence of the organization permit may not be used as an inducement in any solicitation.
(b) No person may knowingly, with intent to deceive, exhibit any false document or account regarding the affairs of any organization under Section 31A-5-204 or make any misrepresentation about its affairs.
(4) Solicitations under this section may be made for stock or bond subscriptions only by persons registered under Title 61, Chapter 1, Utah Uniform Securities Act, as broker-dealers or agents. Solicitations under this section may be made for qualifying insurance policies only by persons licensed under Chapter 23a, Insurance Marketing - Licensing Producers, Consultants, and Reinsurance Intermediaries, as insurance producers. Before any solicitation, the solicitor shall obtain from the commissioner a license to solicit, after paying the fee applicable under Section 31A-3-103.
(5) This section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Amended by Chapter 298, 2003 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 208 - Deposit of proceeds of subscriptions.

31A-5-208.
Deposit of proceeds of subscriptions.
(1) All funds, and the securities and documents representing interests in property, received by a stock corporation for stock subscriptions or by a mutual for applications for insurance policies or for mutual bond or contribution note subscriptions, shall be deposited in the name of the corporation with a custodian financial institution qualified under Subsection 31A-2-206(1). This deposit is subject to an escrow agreement approved by the commissioner under which withdrawals may be made only in accordance with conditions specified in the agreement, and with the commissioner's approval. Securities may be held as authorized in Subsection 31A-2-206(2) and are required to be approved by the commissioner.
(2) This section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Amended by Chapter 297, 2011 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 210 - Incorporators' liability and organization expenses.

31A-5-210.
Incorporators' liability and organization expenses.
(1) The incorporators are jointly and severally liable for all organizational and promotional expenses and obligations incurred prior to the issuance of the certificate of authority. Upon issuance of the certificate, the insurer may pay those outstanding expenses and obligations lawfully incurred.
(2)
(a)
(i) After issuance of the certificate of authority, incorporators of a stock corporation who have advanced money or incurred obligations for the reasonable and authorized expenses of organization, including underwriting of securities, may be reimbursed in cash from the proceeds of shares subscribed to under the organization permit, or in shares at the public offering price, on itemized receipts audited by the commissioner.
(ii) Promotional securities in connection with the financing of a stock corporation which is in the promotional, exploratory, or developmental stage may be issued in an amount and for a consideration which is not unreasonable. In this regard, the commissioner may adopt rules setting forth standards with respect to promotional securities allowed to be issued and the considerations to be received for them. The reimbursement for expenses under Subsection (2)(a)(i) has priority over the issuance of promotional securities under Subsection (2)(a)(ii).
(iii) In no event may securities issued under Subsection (2)(a)(i) or promotional securities issued under Subsection (2)(a)(ii) be issued in a manner which would, in the aggregate, cause the dilution in the net tangible asset value of the insurer's securities proposed to be issued to the public to exceed 25%.
(b) After issuance of the certificate of authority, incorporators of a mutual who have advanced money or incurred obligations for the reasonable and authorized expenses of organization may be reimbursed in cash from the proceeds of subscriptions for mutual bonds and contribution notes, on itemized receipts audited by the commissioner. The total reimbursement may not exceed 15% of the amount received for the bonds and notes.
(3) This section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Enacted by Chapter 242, 1985 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 212 - Certificate of authority.

31A-5-212.
Certificate of authority.
(1) The corporation may apply for a certificate of authority at any time prior to the expiration of its organization permit. The application shall include a detailed statement by a principal officer about any material changes that have taken place or are likely to take place in the facts on which the issuance of the organization permit was based, and if any material changes are proposed in the business plan, the information about the changes that would be required if an organization permit were being applied for.
(2)
(a) The commissioner shall issue a certificate of authority if the commissioner finds:
(i) enough cash or property authorized under Subsection 31A-5-207(1)(a) or (2)(a) has been received to satisfy the requirements of Section 31A-5-211;
(ii) there is no basis for revoking the organization permit under Subsection 31A-5-209(2); and
(iii) all other applicable requirements of the law have been met.
(b) The certificate of authority shall specify any limits placed on the insurance business the corporation may carry on and may, within the powers given the commissioner under this title, specify limits on the corporation's methods of operation.
(3) After the issuance of the certificate of authority the following action shall take place:
(a) The board shall authorize and direct the issuance of certificates for shares, bonds, or notes subscribed to under the organization permit, and of insurance policies upon qualifying applications obtained under the organization permit.
(b) The commissioner shall authorize the release to the corporation of all funds held in escrow under Section 31A-5-208.
(4)
(a) A corporation may apply to the commissioner for a new or amended certificate of authority altering limits on its business or methods of operation. The application shall contain or be accompanied by information in Subsection 31A-5-204(2) as the commissioner reasonably requires. The commissioner shall issue the new certificate if the commissioner finds:
(i) the corporation's capital and surplus satisfy the requirements of Section 31A-5-211 as to the operations proposed under the new certificate of authority; and
(ii) the proposed business would not be contrary to law or to the interests of insureds or the public.
(b) If the commissioner issues an order under Chapter 27, Part 5, Administrative Actions, against a corporation, the commissioner may also revoke the corporation's certificate and issue a new one with any limitation the commissioner considers necessary.
(5) Except as to Subsection (4), this section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Amended by Chapter 309, 2007 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 213 - Accelerated organization procedure.

31A-5-213.
Accelerated organization procedure.
(1) The incorporators may apply for a certificate of authority without first obtaining an organization permit if:
(a) their number is not more than 15;
(b) no compensation is paid directly or indirectly for soliciting any of them;
(c) they purchase for their own accounts all the shares proposed to be issued in the case of a stock corporation, or in the case of a mutual, they supply all the minimum permanent surplus and initial expendable surplus by contribution notes or otherwise; and
(d) the shares are promotional securities and are subject to Subsection 31A-5-304(3) and (4).
(2) The application for a certificate of authority shall include:
(a) proof that the purchase price for the shares or the proceeds of contribution notes have been deposited on behalf of the proposed corporation;
(b) a statement concerning whether and what property other than money is held in trust for the proposed corporation; and
(c) the information which the commissioner reasonably requires under Subsection 31A-5-204(2).
(3) The commissioner shall issue a certificate of authority if he finds that:
(a) all requirements of law have been met;
(b) all natural persons who are incorporators, the directors and principal officers of corporate incorporators, and the proposed directors and officers of the corporation being formed are trustworthy and collectively have the competence and experience to engage in the particular insurance business proposed; and
(c) the business plan is consistent with the interests of the corporation's potential insureds and of the public.
(4) The director of the Division of Corporations and Commercial Code shall issue a certificate of incorporation upon notice from the insurance commissioner that all the applicable requirements of law have been met, including the payment of fees.
(5) When the certificate of incorporation is issued, the corporation's legal existence begins, the articles and bylaws become effective, and the proposed directors and officers take office. The certificate is conclusive evidence of compliance with this section, except in a proceeding by the state against the corporation.
(6) This section does not apply to stock or mutual insurance corporations already in existence on July 1, 1986.
Amended by Chapter 95, 1987 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 216 - Change of domicile.

31A-5-216.
Change of domicile.
(1) A foreign insurance corporation may become a Utah insurance corporation if it submits an application which evidences that the corporation complies with all of the requirements imposed on domestic Utah corporations. The commissioner may, by order after a hearing, relax the requirements of this chapter applicable to corporations in the process of organization that, because of the developed status of the insurer, he finds unnecessary to protect policyholders and the public. The commissioner shall simultaneously issue a certificate of organization under Subsection 31A-5-204(3) and a certificate of authority under Subsection 31A-5-212(2) when the conditions for both have been satisfied.
(2) Upon approval by the commissioner, a domestic insurer may transfer its domicile to any other state in which it is admitted. The commissioner shall approve the transfer of domicile unless he finds that the transfer will prejudice the interests of policyholders, creditors, or the public in Utah. The commissioner may require a special deposit, reinsurance, or other protective measures as an alternative to rejecting the insurer's application to move. After or simultaneous with the removal of the corporation, it may seek entry into this state as a foreign corporation under Chapter 14, Foreign Insurers.
(3) The transfer of domicile of an insurance corporation under either Subsection (1) or Subsection (2) does not affect the obligations of the corporation under its existing insurance contracts or any other existing contracts.
Enacted by Chapter 242, 1985 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 218 - Subsidiaries.

31A-5-218.
Subsidiaries.
(1) Subject to the limitations under Subsection 31A-18-106(1)(k), an insurance corporation may form or acquire subsidiaries to do any lawful insurance business.
(2) An insurance corporation may form or acquire subsidiaries to hold or manage any assets that it might hold or manage directly.
(3)
(a) An insurance corporation may form or acquire subsidiaries to perform functions or provide services that are ancillary to its insurance operations.
(b) A subsidiary is an ancillary subsidiary if it is engaged principally in one or more of the following:
(i) acting as an insurance producer;
(ii) investing, reinvesting, or trading in securities, or acting as a securities broker, dealer, or marketing representative;
(iii) managing investment companies registered under the federal Investment Company Act of 1940, as amended, including related sales and services;
(iv) providing investment advice and services;
(v) acting as administrative agent for a government instrumentality performing an insurance, public assistance, or related function;
(vi) providing services related to insurance operations, including accounting, actuarial, pension administration, appraisal, auditing, claims adjusting, collection, data processing, communications, loss prevention, premium financing, safety engineering, and underwriting services;
(vii) holding or managing property used by the corporation, alone or with its affiliates for the convenient transaction of its business;
(viii) engaging in the motor club business under Chapter 11, Motor Clubs;
(ix) engaging in the business of any institution subject to the jurisdiction of the Department of Financial Institutions under Title 7, Financial Institutions Act;
(x) providing similar services or performing similar activities which the commissioner declares ancillary by rule; and
(xi) owning corporations that would be authorized as subsidiaries under Subsections (3)(b)(i) through (3)(b)(ix) and under Subsections (1) and (2).
(4) An insurance corporation may form or acquire subsidiaries other than those under Subsections (1) through (3), but only to the extent the insurer has excess surplus as defined under Section 31A-1-301.
(5)
(a) An insurance corporation shall notify the commissioner immediately following the formation or acquisition of a subsidiary under this section.
(b)Chapter 16, Insurance Holding Companies, provides additional requirements that are applicable to the acquisition of certain subsidiaries.
Amended by Chapter 298, 2003 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 2 - Organization of Corporations › Section 219 - Amendment of articles.

31A-5-219.
Amendment of articles.
(1) Subject to Subsection (3) and to the requirements of the Insurance Code, a stock corporation may amend its articles under Sections 16-10a-1001 through 16-10a-1009 and a mutual may amend its articles under Sections 16-6a-1001 through 16-6a-1005 in any manner, including substantial changes of its original purposes. No amendment may be made contrary to Subsections 31A-5-203(1) through (3).
(2) An amendment becomes effective when the properly adopted and filed articles of amendment are approved by the commissioner.
(3) Section 16-10a-1009 applies to stock corporations and the second paragraph of Section 16-6a-1009 applies to mutuals.
Amended by Chapter 300, 2000 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 3 - Securities of Domestic Insurance Corporations › Section 301 - Securities regulation.

31A-5-301.
Securities regulation.
(1)
(a) Except as provided in Subsections (1)(b) and (c), no security issued by a domestic or nondomestic insurance corporation may be sold in this state by or for the corporation or any other person unless it is registered under Section 31A-5-302 and otherwise complies with this chapter. Securities that comply with this chapter are not subject to Title 61, Chapter 1, Utah Uniform Securities Act.
(b) Securities and transactions exempt under Section 61-1-14 are also exempt under this chapter.
(c) Any exemption under Section 61-1-14 may be revoked by the commissioner for a particular insurance corporation by an order after a hearing. The order shall explain the reasons for the revocation.
(2)
(a) No person which is organizing or is acquiring additional funds in this state or elsewhere solely or partly for the purpose of organizing a corporation under this chapter, may register or sell its securities in this state, directly or indirectly, unless it obtains an organization permit under Section 31A-5-204.
(b) No security may be registered or sold in this state if the person registering or selling the security, or any person affiliated with the person, represents that an insurer will be organized or purchased in this state with the proceeds of the sale, unless the issuer first obtains an organization permit under Section 31A-5-204.
(3) If a security is issued or sold in violation of this chapter, the transaction is valid and enforceable by an outsider against the corporation or against an insider, and is valid and enforceable by the corporation against an insider.
(4) This section does not apply to securities issued prior to July 1, 1986.
Amended by Chapter 204, 1986 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 3 - Securities of Domestic Insurance Corporations › Section 302 - Registration of securities.

31A-5-302.
Registration of securities.
(1)
(a) An insurance security shall be registered with the commissioner:
(i) by coordination under Section 61-1-9; or
(ii) by qualification under Section 61-1-10.
(b) A registration statement under this Subsection (1) shall conform to Section 61-1-11.
(2) The commissioner has the powers specified in Sections 61-1-12, 61-1-15, 61-1-19, 61-1-20, and 61-1-24.
(3) Sections 61-1-16, 61-1-17, 61-1-18.3, and 61-1-25 apply to the regulation of securities under this part.
(4) As used in this chapter, the words "commission" or "division" under Title 61, Chapter 1, Utah Uniform Securities Act, mean the insurance commissioner.
Amended by Chapter 351, 2009 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 3 - Securities of Domestic Insurance Corporations › Section 304 - Promoter stock.

31A-5-304.
Promoter stock.
(1) While the organization permit is effective, the incorporators, directors, and principal officers of a stock corporation shall in the aggregate subscribe and pay, at the public offering price, at least $150,000 in cash or in property of equivalent value approved by the commissioner under Subsection 31A-5-207(1)(a) or (2)(a), for shares offered by the corporation under the organization permit.
(2)
(a) Certificates representing promotional securities and any stock received on those shares as the result of a stock dividend, stock split, or exercise of preemptive or conversion rights, shall be placed in escrow with a depository satisfactory to the commissioner under an agreement providing that the shares may not be transferred without the approval of the commissioner.
(b) If the corporation issues any life insurance policies, any shares subject to this section shall be released from escrow five years after issuance of the certificate of authority. In other cases, the shares shall be released from escrow three years after issuance of the certificate of authority.
(3) The commissioner's approval of the transfer of promoter stock under Subsection (2)(a):
(a) shall be granted upon request, if the corporation has made an addition to earned surplus in each of the two immediately preceding years of at least 15% of the capital and surplus raised by the sale of shares under the organization permit; and
(b) may be granted upon a showing of hardship by the shareholder or his estate or legatee, if the release from escrow of the shares or a portion of the shares would not, in the commissioner's opinion, endanger the interests of insureds or the public.
(4) For three years after the issuance of the certificate of authority, an option to purchase stock may be issued only under a plan approved by the commissioner.
(5) This section does not apply to promotional securities issued prior to July 1, 1986.
Enacted by Chapter 242, 1985 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 3 - Securities of Domestic Insurance Corporations › Section 306 - Corporate repurchase of shares.

31A-5-306.
Corporate repurchase of shares.
(1)
(a) To the extent of excess surplus, a stock corporation may repurchase its own shares 15 days after giving written notice to the commissioner.
(b) A stock corporation without excess surplus shall obtain written approval of the commissioner prior to repurchasing its own shares.
(c) Any repurchase of stock is subject to Section 16-10a-631.
(d) A stock corporation may not repurchase its own shares if it is hazardous or would become hazardous as a result of the repurchase.
(2) Within 10 days after the end of any month in which it purchases more than 1% of any class of its outstanding shares, the corporation shall report the price and the names of the registered shareholders from whom the shares are acquired and of any other persons beneficially interested in those shares, so far as the latter are known to the corporation. The corporation shall make a similar report within 10 days after the end of any three-month period in which it purchases more than 2% of any class of its outstanding shares and within 10 days after the end of any 12-month period in which it purchases more than 5% of any class of its outstanding shares. Section 16-10a-631 applies to the corporation's acquisition of its outstanding shares.
(3) Treasury shares may be disposed of by the corporation for their current market value or, if there is no market, for the consideration the board of directors determines to be the fair value of the shares.
(4) Section 31A-17-407 applies to accounting for treasury shares.
Amended by Chapter 9, 1996 Special Session 2
Amended by Chapter 9, 1996 Special Session 2
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 3 - Securities of Domestic Insurance Corporations › Section 307 - Reduction in capital.

31A-5-307.
Reduction in capital.
A stock corporation may reduce its capital by amendment of its articles of incorporation under Section 31A-5-219, if the commissioner is notified of the proposed reduction at least 60 days prior to the proposed effective date of the reduction. The commissioner may disapprove the reduction within 45 days after the notice if he finds that it would violate the law or would be contrary to the interests of insureds. His order shall explain in detail why the distribution is disapproved.
Amended by Chapter 277, 1992 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 401 - Principal office and registered agent.

31A-5-401.
Principal office and registered agent.
Each domestic insurance corporation shall have its principal office and place of business in this state. By order, the commissioner may exempt a corporation from this requirement, in which case it is subject to the requirement of Section 31A-14-204. The location of a domestic insurance corporation's principal office and the existence of a registered agent are governed by Title 16, Chapter 17, Model Registered Agents Act.
Amended by Chapter 364, 2008 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 401.1 - Definitions.

31A-5-401.1.
Definitions.
As used in this Part 4, Management of Insurance Corporations:
(1) "Voting members of mutuals" and "voting members" mean persons entitled to vote at annual or special meetings of the members of a mutual, as set forth in the articles of incorporation or amendments to the articles.
(2) Voting members of mutuals and voting members do not necessarily include policyholders of the mutual, if the articles of incorporation or amendments to the articles of incorporation so provide, and if the articles of incorporation or amendments have been approved by the commissioner after a hearing.
Amended by Chapter 90, 2004 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 402 - Shareholders' meetings.

31A-5-402.
Shareholders' meetings.
(1) Sections 16-10a-701, 16-10a-702, 16-10a-705, 16-10a-721, 16-10a-724, 16-10a-726, and 16-10a-728 apply to the meetings, notices, quorums, and voting of stock corporations. Except where a greater percentage is required or allowed under this title, the articles of incorporation of domestic insurers may not require more than 50% of the shares represented for the approval of an action requiring shareholder approval.
(2) Sections 16-10a-707 and 16-10a-720 apply to the closing of transfer books, the fixing of the record date, and the voting lists of stock corporations.
(3) Section 16-10a-731 applies to stock corporations. The transfer of shares to a voting trust does not preclude the trustor, or trustee, from being subject to Chapter 16, Insurance Holding Companies.
Amended by Chapter 277, 1992 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 403 - Corruption in shareholders' meetings.

31A-5-403.
Corruption in shareholders' meetings.
No person may, in connection with any meeting of shareholders, members, or policyholders of an insurer, buy or sell a vote or proxy for money or any other thing of value, or engage in any corrupt or dishonest practice in connection with the conduct of the shareholders' meeting.
Enacted by Chapter 242, 1985 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 404 - Communications to shareholders, policyholders, and voting members -- Commissioner's attendance at meetings.

31A-5-404.
Communications to shareholders, policyholders, and voting members -- Commissioner's attendance at meetings.
(1)
(a) Sections 16-10a-1601 through 16-10a-1604 apply to the books and records and their inspection by shareholders of stock corporations. Section 16-6a-1602 applies to the books and records and inspection rights of policyholders or voting members of mutuals. However, the inspection of the records of the names and addresses of policyholders or voting members of mutuals is permitted only to communicate with other policyholders or voting members regarding the nomination and election of candidates for the board, or for other corporate matters which may be submitted to a vote of the policyholders or voting members. No person may, directly or indirectly, use any information obtained in an inspection for any other purpose.
(b) Any books, records, or minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.
(c) Any provision of this chapter or of any articles or bylaws of a mutual, which requires keeping a record of the names and addresses of policyholders entitled to vote or voting members, is complied with by keeping a record of the names of policyholders or voting members and the names and addresses of insureds or persons paying premiums. This provision requires mailing or sending of notices, reports, proposals, ballots, or other materials to policyholders or voting members of record.
(2) Subject to Subsection (4), the commissioner may by rule prescribe that copies of specified classes of communications circulated generally by a corporation to shareholders, policyholders, or voting members be communicated to the commissioner at the same time.
(3) Subject to Subsection (4), the commissioner may attend any shareholders', policyholders', or voting members' meeting as an observer.
(4) Subsection (3) and, so far as it relates to communications to shareholders, Subsection (2) do not apply to stock corporations whose voting shares are owned by a single person, or whose shareholders are either members of the board or are explicitly represented on it.
Amended by Chapter 300, 2000 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 405 - Meetings of mutuals and mutual policyholders' and members' voting rights.

31A-5-405.
Meetings of mutuals and mutual policyholders' and members' voting rights.
(1)
(a) Subject to this section, Sections 16-6a-701, 16-6a-702, 16-6a-704, and 16-6a-714 apply to the meetings of members, the notice, and the voting in mutuals.
(b) Subject to this section and Section 31A-5-409, Section 16-6a-711 applies to the voting of members of mutuals.
(2)
(a) Policyholders or voting members in all mutuals have the right to vote on:
(i) conversion;
(ii) voluntary dissolution;
(iii) amendment of the articles; and
(iv) the election of directors except public directors appointed in accordance with Subsections 31A-5-409(1) and (2).
(b) The mutual may adopt reasonable provisions in its bylaws to determine:
(i) which individual among joint policyholders may exercise a voting right; and
(ii) how to deal with cases where the same individual is one of several joint policyholders in various policies.
(c) The articles of any mutual may give the policyholders or voting members additional voting rights. These articles may require a greater percentage of affirmative votes to approve an action than the statutes require.
(3)
(a) The articles or bylaws shall contain rules governing voting procedures and voting eligibility consistent with Subsection (1).
(b) An amendment to a rule described in this Subsection (3) is not effective until at least 30 days after the rule has been filed with the commissioner.
(4)
(a) The articles or bylaws may provide for regular or special meetings of the policyholders or voting members, and, if meetings are not provided for, then mail elections shall be provided for in lieu of elections at meetings.
(b) Notice of the time and place of regular meetings or elections shall be given to each policyholder or voting member in a reasonable manner as the commissioner approves or requires. Changes may be made by written notice mailed, properly addressed, and stamped, to the last-known address of all policyholders or voting members.
(5)
(a) The articles may provide that representatives or delegates selected by the policyholders or voting members shall be from specific geographical districts or defined classes of policyholders or voting members, as determined on a reasonable basis.
(b) After the representative assembly has been selected by the policyholder or voting members, the assembly or the respective classes of policyholders or voting members may choose replacements for members unable to complete their terms, if the articles provide for their replacement.
(c) The vote of a person holding a valid proxy is treated as the vote of the policyholders or voting members who gave the proxy.
Amended by Chapter 308, 2002 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 407 - Board of directors.

31A-5-407.
Board of directors.
(1) Subject to this section, Sections 16-10a-801 through 16-10a-803, 16-10a-805, and 16-10a-811 apply to the board of directors of a stock corporation and Sections 16-6a-802 and 16-6a-805 apply to the governing board and trustees of mutuals.
(2) A majority of the directors shall be residents of this state unless the commissioner is satisfied that the corporation's financial condition, management, and other circumstances give assurance that the interests of insureds and the public will not be endangered by the majority being nonresidents.
(3) Employees and agents of a corporation that receive more than 10% of their income from the corporation, and persons related to any of them within the second degree by blood or marriage, if directors, are considered "inside directors." Inside directors may not constitute a majority of the corporation's board.
(4) Subsections (2) and (3) and the required number of directors for committees under Subsection 31A-5-412(1) do not apply to an insurance subsidiary authorized under Subsection 31A-5-218(1), nor to a stock insurance corporation, more than 50% of whose outstanding shares entitled to vote are owned or controlled by a single person or all of whose voting shareholders are either members of or are individually represented on the board.
(5) If the directors of a corporation are divided into classes by the articles or the bylaws, no class may contain fewer than one-third of the total number of directors. Subject to this requirement, Section 16-10a-804 applies to the classification of directors of stock corporations. When classes of trustees or directors are provided in a mutual corporation, the terms of office of the several classes need not be uniform.
(6) The board shall manage the business and affairs of the corporation and may not delegate its power or responsibility, except as authorized by Section 31A-5-412.
(7) Section 16-10a-824 applies to the determination of a quorum of directors of a stock corporation and Section 16-6a-816 applies to the determination of a quorum of trustees for a mutual, except as specifically provided otherwise in this title.
(8)
(a) Sections 16-10a-820 and 16-10a-821 apply to the meetings and action without a meeting of the board of directors of stock corporations.
(b) Sections 16-6a-812 through 16-6a-819 apply to the meetings and notice of mutuals.
(9) Sections 16-10a-1601 through 16-10a-1604 apply to stock corporations and Section 16-6a-1602 applies to mutuals regarding the examination of books and records of these entities.
Amended by Chapter 300, 2000 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 408 - Election and removal of directors and officers of stock corporations.

31A-5-408.
Election and removal of directors and officers of stock corporations.
(1) Sections 16-10a-721, 16-10a-724, and 16-10a-728 apply to the voting of shares of a stock corporation.
(2) At each annual meeting of shareholders, the shareholders shall elect directors to hold office until the next succeeding annual election, except as provided under Subsection (3) or (4). Each director shall hold office for the term for which he is elected and until his successor is elected and qualified, if qualification is required.
(3) Sections 16-10a-808 and 16-10a-832 apply to removal of directors and officers of a stock corporation.
(4) Each director shall be subject to election at least once every three years.
(5) A vacancy in the board of directors may be filled by the affirmative vote of a majority of the remaining directors even though the number of remaining directors is less than a quorum. The director elected through this process shall serve only until the next regular shareholders meeting at which a director's election may be held.
Amended by Chapter 277, 1992 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 409 - Selection and removal of directors and officers of mutuals.

31A-5-409.
Selection and removal of directors and officers of mutuals.
(1) The articles or bylaws of a mutual shall state:
(a) the number of directors of the mutual including the directors that are:
(i) appointed as public directors under this Subsection (1) and Subsection (2); or
(ii) elected under Subsection (3);
(b) the number of directors of the mutual that may be appointed as public directors; and
(c) the plan that specifies the manner in which:
(i) a public director is to be appointed; and
(ii) a director who is not a public director is to be elected.
(2)
(a) The plan for the appointment of public directors specified in Subsection (1) shall assure true public representation on the board.
(b) A person appointed as a public director shall have insurance business or other business or professional experience that qualifies that person to serve responsibly and impartially as a director.
(c) A public director may be an uncompensated member of the board of directors.
(d) Notwithstanding Subsection (2)(c), a public director shall meet the qualifications of Subsection (2)(b).
(3)
(a) A director who is not a public director shall be elected by:
(i) the policyholders; or
(ii) voting members.
(b) If the directors who are not public directors are divided into classes, one class shall be elected:
(i) at least every four years; and
(ii) for a term not exceeding six years.
(4) A director may be removed from office for cause by an affirmative vote of a majority of the full board at a meeting of the board called for that purpose.
(5) Subject to Subsections (1) through (4), Section 16-6a-810 applies to vacancies on the governing board.
Amended by Chapter 308, 2002 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 410 - Supervision of management changes.

31A-5-410.
Supervision of management changes.
(1)
(a) Immediately after the selection of a person as a director or principal officer, the insurer shall report to the commissioner:
(i) the name of the person selected as a director or principal officer of a corporation; and
(ii) pertinent biographical and other data that the commissioner requires by rule.
(b) For five years after the initial issuance of a certificate of authority to a corporation, the commissioner may, within 30 days after receipt of a report under Subsection (1)(a), disapprove any person selected who fails to satisfy the commissioner that the person:
(i) is trustworthy; and
(ii) has the competence and experience necessary to discharge that person's responsibilities.
(2)
(a) Whenever a director or principal officer of a corporation is removed under a provision listed in Subsection (2)(b), the insurer shall immediately report to the commissioner:
(i) the removal; and
(ii) a statement of the reasons for the removal.
(b) Subsection (2)(a) applies to a removal under:
(i) Subsection 16-6a-820(4);
(ii) Section 16-10a-808;
(iii) Section 16-10a-832; and
(iv) Subsection 31A-5-409(4).
(3) The commissioner may order the removal of a director or officer if the commissioner finds, after a hearing, that:
(a) a director or officer:
(i) is incompetent;
(ii) untrustworthy;
(iii) is not qualified under Section 31A-5-409; or
(iv) has wilfully violated:
(A) this title;
(B) a rule adopted under Subsection 31A-2-201(3); or
(C) an order issued under Subsection 31A-2-201(4); and
(b) the circumstances described in Subsection (3)(a) endangers the interests of:
(i) insureds; or
(ii) the public.
Amended by Chapter 308, 2002 General Session
2023 Utah Code › Title 31A - Insurance Code › Chapter 5 - Domestic Stock and Mutual Insurance Corporations › Part 4 - Management of Insurance Corporations › Section 411 - Continuity of management in emergencies.

31A-5-411.
Continuity of management in emergencies.
(1) If an emergency is caused by an attack on the United States or by a nuclear or other disaster which makes it impracticable for a corporation to conduct its business in strict accord with applicable provisions of law, its articles, bylaws, or its charter, this section facilitates the continued operation of a domestic insurance corporation.
(2) The board of any corporation may adopt emergency bylaws, subject to repeal or change by action of those having power to adopt regular bylaws. These bylaws shall operate during a national emergency. Notwithstanding any different provisions in the regular bylaws, the applicable statutes, or the corporation's articles or charter, these emergency bylaws may make any provision that is reasonably necessary for operation during the emergency.
(3) If the board of a corporation has not adopted emergency bylaws, the following provisions are effective in a national emergency:
(a) Three directors constitute a quorum for the transaction of business at all meetings of the board.
(b) A vacancy on the board may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director.
(c)
(i) If there are no surviving directors, but at least three officers of the corporation survive, the three officers with the longest term of service become the directors and possess all of the powers of the previous board and the powers that are granted under this section. The emergency board may elect other directors by a majority vote.
(ii) If there are not three surviving officers, the commissioner shall appoint three natural persons, including any surviving officers, as directors. They shall possess all of the powers of the previous board and any powers granted under this section. The emergency board may elect other directors by majority vote.
(4) The board of a corporation may, by resolution adopted by the board, provide that in the event of a national emergency and in the event of the death or incapacity of specified officers of the corporation, those officers shall be succeeded by the persons described in a succession list. The list may name persons or position titles. It shall establish the order of priority, successors in office, and it may prescribe the conditions for exercise of the powers of the office.
(5) The board of a corporation may, by resolution, provide that in a national emergency the home office or principal place of business is a location named in the resolution. The resolution may provide for alternate locations and establish an order of preference.
Enacted by Chapter 242, 1985 General Session