304.25-040 Change of location -- Emergency boards of directors.
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Notwithstanding any provision of its charter, any domestic insurance organization,
without complying with any provision of law requiring approval, or application for
approval, of a change of location of its principal office may, from time to time,
change the location thereof during an acute emergency to a suitable location within
the United States, and may carry on its business at such new location during such
acute emergency, and for a reasonable time thereafter. Any insurance organization
which changes the location of its principal office during an acute emergency shall
notify the commissioner thereof in writing as soon as practical, stating the address
of the new location, the address of the former location, and the dates when business
is ceasing at the former location and commencing at the latter location.
Notwithstanding any contrary provision of law or its charter, if at any time during
an acute emergency affecting any domestic insurance organization, no person
otherwise empowered to call meetings of the board is capable of acting, a meeting
thereof may be called by any director or acting director or if no director or acting
director is capable of acting, by any officer or acting officer. If it shall be
impractical or impossible to give notice of a meeting of the board in the manner
prescribed by charter and law, other than this subtitle, the person calling such a
meeting may give notice thereof by making such reasonable efforts as
circumstances may permit to notify each director and acting director of the time and
place of the meeting, but need not specify the purposes thereof. Failure of any
director or acting director to receive actual notice of a meeting of directors and
acting directors shall not affect the power of the directors and acting directors
present at such meeting to exercise the powers of an emergency board of directors
as prescribed in this section. Nothing in this subtitle shall be construed as requiring
a meeting of the board of such an organization to be convened in any manner
different from that prescribed by its charter and by the provisions of law other than
this subtitle.
If three (3) or more directors and acting directors of any domestic insurance
organization are present at any meeting of its board duly convened during an acute
emergency affecting such domestic insurance organization, they shall constitute its
emergency board of directors which, notwithstanding any contrary provision of law
or of its charter, shall have the power, subject to the limitations prescribed by this
subtitle, by a majority of those present, to take any and every action which may be
necessary to enable such domestic insurance organization to meet the exigencies of
the acute emergency and conduct its business during such period, but no other
powers. The powers of an emergency board of directors shall include but shall not
be limited to the following powers:
(a) Fill vacancies and absentees. At any meeting, to elect such acting directors as
it may deem necessary, without regard to the number of directors which would
otherwise be required, to serve in any positions on such board which are
vacant or in place of any directors or acting directors who are absent from
such meeting, but not to elect any director on a permanent basis;
(b)
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Acting officers and duties. To elect such acting officers as it may deem
necessary, without regard to the number of officers which would otherwise be
required, to serve in any offices which are vacant or in place of any officers or
acting officers who fail to appear and assume their duties, to fix the
compensation and determine the powers and duties of acting officers and to
remove acting officers but not to remove any officer or to fill any vacancy on
a permanent basis or to cause the insurance organization to enter into any
contract of employment for a term in excess of one (1) year;
(c) Change of location. To cause the insurance organization to change the
location of its principal office, pursuant to this section, or any of its places of
business, and to authorize such action as it may deem appropriate to acquire
space and facilities at new locations, but not to acquire for use of its principal
office property in fee or for a term in excess of one (1) year;
(d) Postpone meetings. To postpone any meeting of the stockholders,
policyholders, or members or directors of such organization if, in the
judgment of a majority of the members of such emergency board of directors,
it would be impracticable to hold such meeting at the time it would otherwise
have been held or conducted; and
(e) Call meetings. If it shall appear to an emergency board of directors that a
quorum of the board cannot be assembled within a reasonable time, to call a
meeting of the stockholders, policyholders, or members of the insurance
organization to be held as soon as the circumstances may reasonably permit, at
a place to be designated by the emergency board of directors within this state
or a contiguous state, for the purpose of electing directors to fill vacancies on
the board, but for no other purpose, and to propose nominees for such
election. Any such meetings of stockholders, policyholders, or members shall
be held upon notice given in accordance with the charter of the organization
and applicable law other than this section.
As soon as practicable after each meeting of an emergency board of directors, the
person who presided thereat shall notify the commissioner in writing of the time
and place of such meeting, of the manner in which notice thereof was given, of the
persons present and of all actions taken at such meeting.
No person prohibited by law or by the charter of a domestic insurance organization
from serving as a member of its board shall be eligible to serve as an acting director
except that no person shall be disqualified to serve as an acting director by reason of
his or her not being a stockholder, policyholder, or member of such insurance
organization, by reason of his or her not being a resident of this state or of a
contiguous state, or by reason of the number of directors or acting directors who are
officers, acting officers or employees of the insurance organization. Any person
may serve as an acting director of a fund who is a director, acting director, officer,
or acting officer of an organization which is a party to the agreement creating the
fund. No oath of acting directors shall be required.
Acting directors elected under this section or appointed under KRS 304.25-060
shall be entitled to vote at all meetings of emergency board of directors equally with
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directors. Acting directors shall not be entitled to take part in the deliberations or to
vote at any meeting of the board which is duly convened in accordance with the
applicable provisions of its charter and of law other than this subtitle and at which a
quorum is present. Each acting director shall serve until the director or acting
director in whose place he or she was elected or appointed shall attend the meeting
of the board or until the director is duly elected to fill the vacancy in which such
acting director has been serving, whichever event occurs earlier. An acting director
shall be entitled to the compensation, if any, payable to a director.
Acting officers elected pursuant to this section shall have powers and duties and
receive such compensation as may from time to time be determined by the
emergency board of directors. Each acting officer shall serve until the officer in
whose place he or she was elected shall appear and assume his or her duties or until
his or her successor officer or acting officer shall be elected, whichever event occurs
earlier.
This section shall not be deemed applicable during a period of acute emergency to
any domestic organization operating in accordance with and under emergency
bylaws theretofore approved by the commissioner.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1364, effective July 15, 2010. -- Created
1970 Ky. Acts ch. 301, subtit. 25, sec. 4, effective June 18, 1970.
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