2013 New York Consolidated Laws
ISC - Insurance
Article 12 - (1201 - 1221) ORGANIZATION AND CORPORATE PROCEDURE
1211 - Mutual insurance corporations; membership and dividends.

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