N.Y. Insurance Law § 1202: Number of directors; independent directors and committees of the board of directors; duty of directors

§ 1202. Number of directors; independent directors and committees of

the board of directors; duty of directors. (a) (1) Subject to item (v)

of subparagraph (B) of paragraph five of subsection (a) of section one

thousand two hundred one of this article, and subject to any provision

of the corporate charter of a domestic insurance company, the number of

directors shall be fixed by the by-laws, or if not so fixed, by action

of the directors.

(2) If not otherwise fixed under this article, the number shall be

seven but it may be increased or decreased by amendment of the by-laws,

or by action of the board, subject to the following limitations: (i) if

the board is authorized by the by-laws to increase or decrease the

number of directors, the amendment shall require the vote of a majority

of the entire board; (ii) no decrease shall shorten the term of any

incumbent director; and (iii) no decrease shall reduce the number of

directors to fewer than seven.

(3) The charters of all domestic insurance companies approved before

January first, nineteen hundred forty which fail to comply with item (v)

of subparagraph (B) of paragraph five of subsection (a) of section one

thousand two hundred one of this article but which were validated by

section forty-eight-a of the former insurance law in effect prior to

this chapter remain so validated and shall not be affected by such item

or paragraph one or two of this subsection in respect of the minimum

number of directors.

(b) (1) Subject to item (v) of subparagraph (B) of paragraph five of

subsection (a) of section one thousand two hundred one of this article,

not less than one-third of the directors of a domestic stock life

insurance company and not less than one-third of the members of each

committee of the board of directors of any domestic life insurance

company shall be persons who are not officers or employees of such

company or of any entity controlling, controlled by, or under common

control with such company and who are not beneficial owners of a

controlling interest in the voting stock of such company or any such

entity. At least one such person shall be included in any quorum for the

transaction of business at any meeting of the board of directors or any

committee thereof.

(2) The board of directors of a domestic life insurance company shall

establish one or more committees comprised solely of directors who are

not officers or employees of the company or of any entity controlling,

controlled by, or under common control with the company and who are not

beneficial owners of a controlling interest in the voting stock of the

company or any such entity. Such committee or committees shall have

responsibility for recommending the selection of independent certified

public accountants, reviewing the company's financial condition, the

scope and results of the independent audit and any internal audit,

nominating candidates for director for election by shareholders or

policyholders, evaluating the performance of officers deemed by such

committee or committees to be principal officers of the company, and

recommending to the board of directors the selection and compensation of

such principal officers and in the case of a domestic stock life

insurance company, recommending to its board of directors any plan to

issue options to its officers and employees for the purchase of shares

of stock, pursuant to section one thousand two hundred seven of this

article.

(3) The provisions of this subsection shall not apply to a domestic

life insurance company if the holding company or parent corporation is a

foreign or domestic insurance company, a mutual insurance holding

company established pursuant to the laws of the United States, or a

publicly held corporation incorporated in the United States, having a

board of directors and committees thereof that meet the same

requirements as have been established for a domestic stock life

insurance company pursuant to paragraphs one and two of this subsection.

In such a case, the directors of the holding company or parent

corporation shall be subject to this chapter in the same manner as the

directors of a domestic stock life insurance company.

(c) A director of a domestic life insurance company shall perform his

duties as a director, including his duties as a member of any committee

of the board upon which he may serve, in accordance with the provisions

of section seven hundred seventeen of the business corporation law and

the provisions of this chapter.