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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) Acting officers and duties. To elect such acting officers as it may deem
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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 directors. Acting directors shall not be entitled to take part in the
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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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