KRS 304.25-040: Change of location -- Emergency boards of directors.

(1) 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 th e 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.

(2) 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 o f 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 m eeting 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 direct ors

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.

(3) 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 ac ute

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 duti es. 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 th eir 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 pro pose 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.

(4) As soon as practicable after ea ch 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.

(5) 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 direct ors 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 creat ing the

fund. No oath of acting directors shall be required.

(6) 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 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 a cting 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 servin g, whichever event occurs earlier. An acting director

shall be entitled to the compensation, if any, payable to a director.

(7) 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.

(8) 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.