KRS 304.24-040: Incorporation of domestic stock, combined stock and mutual life, or

mutual insurers -- Votes allotted to stockholders and policyholders.

(1) This section applies to stock, combined stock and mutual life, or mutual insurers

hereafter incorporated in this state. Such an insurer may be formed for the purpose

of transacting any kind or kinds of insurance, as well as annuity business.

(2) Incorporators. Three (3) or more individuals, none of whom is less than eighteen

(18) years of age, may incorporate a stock insurer; ten (10) or more individuals may

incorporate a mutual insurer. At least a majority of the incorporators must be

citizens of the United States. At least a majority of the incorporators must be

residents of Kentucky.

(3) Articles. The incorpo rators shall deposit the articles of incorporation, in

quadruplicate originals, with the commissioner, and the articles shall not be filed

with the Secretary of State until approved by the commissioner as provided in KRS

304.24-050, and the commissioner's approval has been stamped upon or otherwise

attached to the articles. In addition to the applicable requirements of laws in this

state governing the incorporation of business corporations generally:

(a) The name of the corporation, which shall be subject t o KRS 304.3 -100, shall

contain the words "insurance company;" if a mutual, or a combined stock and

mutual, the word "mutual" must be a part of the name.

(b) The articles of incorporation shall specify the kind or kinds of insurance

proposed to be transacted.

(c) Each share of capital stock shall have a par value of not less than $1.00.

(d) If a mutual, or a combined stock and mutual life, the articles of incorporation

shall state the maximum contingent liability of its participating policyholder

members, other than as to nonassessable policies, for payment of losses and

expenses incurred. Such liability shall be as stated in the articles of

incorporation, but shall not be less than one (1) or more than six (6) times the

premium for member's policy at the annual premium rate for a term of one (1)

year.

(e) The names and residence addresses of the incorporators.

(4) Unless otherwise provided in the articles of incorporation or an amendment thereto,

each stockholder of a combined stock and mutual life insurance company shall, at

all meetings, be entitled to one (1) vote for each share of common stock held by

him, and each holder of a policy entitled to participate in profits or savings shall be

a member and, as such, shall be entitled to vote on the same basis to which he

would be entitled in a mutual company under KRS 304.24-210.