N.Y. Insurance Law § 4210: Election of directors of domestic mutual life insurance companies

§ 4210. Election of directors of domestic mutual life insurance

companies. (a) (1) The directors of every domestic mutual life insurance

company shall be elected in the manner and subject to the regulations

prescribed in this section.

(2) Every such company shall, in accordance with its charter, either

elect its entire board of directors biennially, or divide its board of

directors into not more than three classes, as nearly equal as may be,

in which case the members of one class only shall be elected annually.

(3) In this section:

(A) "Policyholder" means the person insured under an individual policy

of life insurance or of accident and health insurance issued upon the

application of such person, the person who effectuates any such policy

upon the person of another pursuant to subsection (c) of section three

thousand two hundred five of this chapter, the person to whom any

annuity or pure endowment is presently or prospectively payable by the

terms of an individual annuity or a pure endowment contract, except

where the policy or contract declares some other person to be the owner

or holder thereof, in which case such owner or policyholder shall be

deemed the policyholder, and except in cases of assignment as

hereinafter provided. In the case of any such individual policy or

contract insuring two or more persons jointly the persons insured, or,

if any such policy be issued upon the application of some third person

or persons, the person or persons who effectuated any such policy

pursuant to subsection (c) of section three thousand two hundred five of

this chapter shall be deemed one policyholder within the meaning of this

section. In case any such policy or contract shall have been assigned by

an assignment absolute on its face, to an assignee other than the

company which shall have issued such policy, and in case the signature

of such assignee, either attested by the assignor or acknowledged by the

assignee, shall have been more than six months prior to any election

hereinafter referred to, filed at the principal office of such company,

then such assignee shall be deemed a policyholder within the meaning of

this section. In the case of every policy or contract of group insurance

or group annuity contract, issued by such company, the employer, or

other person, firm, corporation or association to whom or in whose name

the master policy shall have been issued and held, shall be deemed one

policyholder within the meaning of this section. Whenever in this

section reference is made to a policy of life insurance for one thousand

dollars or more, such reference shall be deemed to include, as

equivalent thereto, an annuity contract which at normal date of maturity

requires the payment of one hundred dollars or more annually, and a pure

endowment contract for the principal sum of one thousand dollars or

more.

(B) "Acknowledged", when used in reference to any instrument or

signature, shall have the same meaning which it has in reference to

conveyances of real property eligible for recording under section two

hundred ninety-one of the real property law.

(b) (1) Every participating policyholder of such company and every

policyholder of such company whose policy or contract is a

non-participating policy or contract described in the first sentence of

paragraph one of subsection (e) of section four thousand two hundred

thirty-one of this article, or a variable annuity contract subject to

paragraph one of subsection (d) of section four thousand two hundred

forty of this article and whose policy or contract shall be in force and

shall have been in force for at least one year prior to any such

election shall be entitled, without further qualification, to vote

thereat, either in person or by mail or by proxy, as hereinafter

provided, except that any company may adopt a resolution amending its

charter or by-laws so as to provide that all voting by policyholders for

directors shall be by ballot alone and not by proxy. In the event any

company adopts such an amendment, all mention of proxy or proxies or of

persons to receive proxies in this section, shall not apply to such

company and such company shall conduct its elections only by means of

ballots as long as such amendment is in effect. Any such company may,

upon the approval of the superintendent, confer, upon all or any class

of its non-participating policyholders holding a policy or contract

issued pursuant to the special permit granted by the superintendent in

accordance with paragraph one of subsection (e) of section four thousand

two hundred thirty-one of this article, the same rights to vote for

directors possessed by its participating policyholders. The

superintendent may give such approval if he finds that the proposed

change is in conformity with the requirements of law and that the

representation of the policyholders therein conferred is equitable and

reasonable.

(2) Every other person having a right to vote in any such election by

virtue of any contract which was made prior to April twenty-seventh,

nineteen hundred six, and which shall be in force at the time of such

election, shall be entitled to vote thereat in similar manner.

(3) In any election of directors of a domestic mutual life insurance

company pursuant to the provisions of this section, every policyholder

shall be entitled to one vote only, irrespective of the number of

policies or contracts held by him and of the amount thereof.

(c) (1) Not less than five months nor more than eight months prior to

any such election, on request of not less than twenty-five policyholders

entitled to vote at the last prior election, which request must be

subscribed and affirmed as true under the penalties of perjury by each

of such policyholders and must be filed in duplicate with such company

at least five days before any hearing thereon, the superintendent, after

notice of not less than five days to such company and a hearing thereon,

may in his discretion order such company within a period of not more

than forty-five days and not less than thirty days thereafter, to file

in his office, or in some suitable place designated by him and under his

custody, a full and correct copy of its list or card catalogue of the

names and last known postoffice addresses of all policyholders who have

been such for at least six months under a policy of life insurance for

one thousand dollars or more, or to file any part of such list or card

catalogue as the superintendent specifies.

(2) A list or any part thereof which may be so ordered filed pursuant

to paragraph one hereof shall be arranged, classified and corrected as

directed by the superintendent; and if one or more independent

nominations are made, as specified in subsection (h) hereof, then such

election shall be deemed a contested election and a complete list or

card catalogue of names of all policyholders who are eligible to vote,

as defined in this section, under a policy of life insurance for one

thousand dollars or more shall be so filed within forty-five days after

the copy of the certificate of such nominations, certified by the

superintendent shall have been filed at the home office of such company,

and such list or card catalogue shall be corrected from the records of

such home office so that a list or card catalogue, as nearly correct as

may be, shall be on file as aforesaid down to within three months of

such election.

(d) (1) Such list or card catalogue or any part thereof so filed,

while in the custody of the superintendent, shall be subject to

inspection, under regulations prescribed by him, at any time during

business hours by any policyholder of such company or by his authorized

representative, and in case of a contested election, under regulations

to be prescribed by the superintendent, may be used in the canvass of

the policyholders of the company.

(2) After such election, or, if no independent nomination has been

made, then after the time for such independent nominations has expired,

such list or card catalogue shall be returned to the company filing the

same.

(e) If all or any class of the policyholders of any domestic stock

life insurance company shall be entitled to vote at any election of the

directors of such company, such policyholders, subject to the provisions

of the company's charter, shall be entitled to vote in person, by proxy

or by mail, as herein provided, and under the conditions stated in

subsection (c) hereof, a similar list or card catalogue of

policyholders, qualified to vote, in accordance with the charter or

by-laws of such corporation, except the holders of industrial policies,

shall be filed and maintained in the office of the superintendent, or in

some suitable place designated by him and under his custody, and at the

home office of such company, respectively, similarly arranged and

similarly subject to inspection and copy and withdrawal as in the case

of mutual life insurance companies as above provided.

(f) Where policyholders in any company shall have made nominations as

hereinafter prescribed, they or a committee representing them, shall

upon demand, and with the approval of the superintendent and the payment

to the company of the actual cost of making such copies, be furnished by

such company with a copy of such list of policyholders or with a copy

therefrom of the policyholders residing in a designated territory. A

copy of a list so taken, or of any part thereof, shall be held by

persons receiving the same inviolate and solely for the purposes of said

nominators in a pending election and shall not be transmitted to other

persons for any other use whatever. At the close of the canvass of the

votes all copies of such lists shall be returned to the company.

(g) At least seven months prior to the date of any election of

directors in any such company, the board of directors shall nominate

candidates for every vacancy to be filled at such election and shall

also appoint three persons, jointly or severally, to receive proxies to

be voted for said nominees, and shall also file in duplicate with the

superintendent and at its home office a certificate of the names of the

candidates so nominated and of the persons so designated to receive said

proxies, which shall be described as the "administration ticket."

(h) (1) (A) In every such company which had over one hundred thousand

policies or contracts of the kind or kinds specified in subsection (a)

hereof, in force at its last preceding election, each in the amount of

one thousand dollars or more, of life insurance or an equivalent thereto

as hereinbefore provided, any policyholders, prospectively qualified as

voters at the next ensuing election of directors, equal in number to

one-tenth of one per centum of such total policies in force or five

hundred, whichever number is greater, and in every other such company,

any five hundred or more of such prospectively qualified voters, may

make other nominations for one or more vacancies in the board of

directors to be filled at any such election by filing with the

superintendent, at least five months before the election, a certificate,

subscribed and affirmed as true under the penalties of perjury by each

of such policyholders, giving the names and addresses of the candidates

nominated, the names and addresses of three persons jointly or

severally, designated to receive proxies to be voted for said nominees,

and an appropriate name or title designated by the superintendent to

distinguish such ticket from the administration ticket and other

nominations.

(B) If the superintendent finds after investigation or hearing that

such other nominations have been made as specified in this subsection,

he may certify to such certificate.

(C) Such nominators shall also file a copy of said certificate,

certified by the superintendent, at the home office of the company at

least five months before such election.

(D) Any policyholder who will be qualified to vote at such ensuing

election if he continues his policy or contract in force at the time of

such election, shall be deemed prospectively qualified to vote thereat.

(2) (A) All certificates of nomination shall be accompanied by a

written acceptance of such nomination by each nominee thereon.

(B) The supreme court in the judicial district in which such company

has its home office may for cause shown direct the name of any candidate

to be stricken from a ticket on file.

(C) The provisions of subsection (k) hereof shall apply to any vacancy

so created.

(3) If no independent nomination shall have been made as provided in

subsection (h) hereof, then the provisions of subsections (i) to (k),

hereof inclusive, of this section, shall not be applicable, and such

election of directors shall be conducted in accordance with such

reasonable rules and regulations as the superintendent may prescribe;

but no votes shall be cast or counted except by ballot signed by the

policyholder and for candidates nominated by the board of directors, in

accordance with subsection (g) of this section or for such candidate as

the board of directors may have nominated to fill vacancies among said

candidates caused by the death, disability or refusal to stand as

candidates of any one or more of those so nominated.

(i) (1) (A) At least three months prior to any such contested election

the company shall cause to be mailed, in a sealed envelope with postage

prepaid, to each policyholder whose name shall be upon said complete

list or card catalogue and whose policy shall still be in force, at his

last known post-office address, a serially numbered official ballot in a

form approved by the superintendent and containing the respective

tickets nominated as hereinbefore provided and the names and addresses

of the persons so appointed to receive proxies. A corresponding serially

numbered stub or card containing the name and address of the

policyholder to whom each ballot is sent shall be retained at the home

office of the company for the purpose of identifying said ballot when

returned.

(B) Such official ballot shall be conveniently arranged under the

names or titles by which the nominations have been designated and shall

have printed upon it the name of the company, the post-office address of

its home office, the number of directors to be elected and the names of

those whose terms expire, the date of the election and instructions as

herein provided for executing such official ballot or for the use of a

proxy as herein provided and a designated space for the signature of the

policyholder, the number of one of his policies and the signature of a

subscribing witness.

(C) No other or different ballot shall be used, except that a

duplicate ballot or ballots may be supplied to any policyholder and

voter or to the holder of his proxy, for his own use, pursuant to rules

and regulations prescribed by the superintendent.

(D) There shall be inclosed in such sealed envelope with such official

ballot a suitable return gummed envelope having inscribed thereon the

name and post-office address of the home office of the company, the

corresponding serial number, and the words "ballot for directors". There

shall also be inclosed in such sealed envelope or printed on the back of

such ballot, a suitable blank proxy together with a statement of the

right of the policyholder to vote either by mail or by proxy as herein

provided or in person.

(E) No other papers or written or printed matter shall be inclosed in

such sealed envelope. Specimen copies of such sealed envelope, ballot

and proxy shall be submitted to the superintendent for his approval, and

no such envelope and inclosures shall be mailed unless the same shall

have been approved by him.

(2) A policyholder desiring to vote directly by mail must indicate the

name of the nominee or nominees for whom he desires to vote or strike

out the name or names of those for whom he does not desire to vote upon

the official ballot so provided or must otherwise suitably indicate in

the blank spaces thereon the nominee or nominees for whom he desires to

vote, and must sign the said official ballot in his own handwriting in

the presence of a subscribing witness, and place or cause to be placed

thereon the number of at least one policy held by him. Failure to state

or to correctly state such policy number shall not render a ballot void

or subject the policyholder to any penalty.

(3) Such policyholder desiring to vote directly by mail must inclose

the official ballot so marked in such return envelope or in a similarly

inscribed envelope. Such envelope containing the ballot sealed and

postpaid shall be mailed by the policyholder to the home office of the

company. No policyholder may vote for more than the number of directors

so to be elected and all ballots upon which the intent of the

policyholder does not fairly appear shall be void.

(j) (1) A policyholder may vote by proxy executed to one or more of

the persons designated in the certificates filed as provided in

subsections (g) and (h) of this section. The execution of a proxy shall

be attested by a subscribing witness and the proxy shall set forth the

number of at least one policy held by the person giving it. A proxy

shall not be valid unless executed within three months prior to the

election and shall be used only at such election or any adjournment

thereof and may not be revoked by the policyholder giving the same

unless it appears that the policyholder was induced by fraud or

misrepresentation to execute the proxy.

(2) In exercising such proxy the holder or holders thereof shall vote

only upon the official ballot, or the duplicate thereof, furnished to

such policyholder as hereinbefore provided, to which such proxy shall be

attached. In so voting the proxy holder shall sign said ballot in the

name of the policyholder, and shall also sign his own name as proxy.

(3) Ballots voted by proxy holders shall be mailed to the home office,

or voted in person by said proxy holder, in the same manner as herein

prescribed for ballots voted directly by policyholders.

(k) (1) The votes at such contested election shall be limited to the

candidates nominated as aforesaid and to substituted nominees chosen as

follows:

(A) In case any vacancy occurs more than five months prior to the day

set for such election, the board of directors, if such vacancy occurs on

the administration ticket, or a majority of the nominators, if such

vacancy occurs on any independent ticket, shall nominate another

candidate to fill such vacancy by filing at least one month prior to the

date of such election a certificate of said nomination with the

superintendent and a certified copy thereof at the home office of the

company, and the name of the candidate so selected shall be set forth in

the official ballot sent out by the company.

(B) If such vacancy occurs within five months of such election then

the board of directors, including those elected at such election, shall

have power to fill such vacancy.

(2) All ballots by mail shall be received, at the home office of the

company holding such contested election, by two or more persons,

one-half of whom shall be appointed for that purpose by the

superintendent and one-half by the directors of the company. The

compensation of the custodians so appointed shall be paid by the

company. Such custodians shall keep a daily record of the envelopes

marked as containing ballots for directors which are received at the

home office, and shall securely retain them in their joint custody in

safety vaults or compartments accessible only to such custodians and not

to either of them separately, under regulations prescribed by the

superintendent. Prior to the closing of the polls on election day said

custodians shall deliver all ballots so received by them to the

inspectors of election.

(3) The election shall be held at the home office of the company. The

polls shall be opened at ten o'clock in the forenoon and remain open

until four o'clock in the afternoon of the day of the election, at which

time they shall be closed. All votes cast at such election shall be by

ballot as hereinbefore provided.

(4) The superintendent shall appoint an adequate number of competent

and disinterested inspectors of election and may appoint if necessary,

expert accountants and other assistants and may authorize the

procurement of stationery and supplies necessary for conducting the

election and canvassing the votes. The reasonable compensation of such

inspectors, expert accountants and other assistants prescribed by the

superintendent, and other necessary disbursements approved by him, shall

be paid by the company. Such inspectors shall have power to determine

all questions concerning the verification of the ballots, the

ascertainment of the validity thereof, the qualifications of the voters

and the canvass of the vote, and with respect thereto shall act under

such rules and regulations as are prescribed by the superintendent.

(5) All envelopes marked substantially as hereinbefore prescribed

received by mail at the office of the company at any time prior to the

day of election or on that day before the polls are closed shall be

forthwith delivered intact without opening to the custodians appointed

as hereinbefore provided and before the polls are closed shall be

delivered to the inspectors of election.

(6) No person shall conceal or withhold or aid or abet any other

person in concealing or withholding from the custodians or inspectors

any such envelope; nor shall any person, other than an inspector, or an

authorized assistant, open or aid or abet any person to open any such

envelope.

(7) No ballots received by mail at the office of the company or

offered personally or by proxy after the polls are closed shall be

counted. All ballots offered personally or under proxies and all ballots

received by mail at the office of the company as aforesaid before the

polls are closed shall be received by the inspectors subject to

verification and ascertainment of the validity thereof and of the

qualifications of the voters.

(8) Immediately upon the closing of the polls the inspectors shall

proceed to the examination of the ballots and shall canvass the votes

lawfully cast. The canvass shall proceed from day to day and the

inspectors, or a majority thereof, shall certify the result to the

company and to the superintendent as soon as it is completed. Such

certificate shall be subscribed and affirmed by such inspectors as true

under the penalties of perjury. Unless contested by the superintendent

or other qualified person pursuant to paragraph twelve hereof, the

results so certified shall be decisive. The superintendent may require

the inspectors to report for determination by him any questions upon

which they may disagree.

(9) Representatives designated by a majority of each three persons who

shall have been appointed as aforesaid to receive proxies to be voted

for tickets nominated for such contested election, in such number as

shall be approved by the superintendent, may be present during the

casting, verification and canvass of the votes. The compensation of such

representatives shall not be a charge upon or paid from the funds of the

company.

(10) All ballots and proxies received by the inspectors of election

shall immediately upon the completion of the canvass be placed in sealed

packages and shall be preserved by the said inspectors for a period of

four months, subject to the order of any court having jurisdiction of

any proceedings relating thereto. The necessary expenses of preserving

such ballots and proxies shall be paid by the company as a part of the

expenses of such election.

(11) The superintendent shall have power to supervise and direct the

methods and procedure of any such contested election and to make all

further needful rules and regulations concerning the same. The

superintendent shall prescribe the method of distribution of ballots and

proxies to policyholders, qualified to vote at such election, who are

not included in such list or card catalogue, and shall prescribe

reasonable rules and regulations for the casting of such ballots and the

exercise of such proxies. All bills for or on account of the custodians

of ballots and inspectors of election, their employees, assistants and

other necessary expenses or disbursements, during the conduct of such

contested election, and the canvass of the votes, shall be approved by

the superintendent before payment by the company.

(12) Any such contested election and the conduct thereof shall at all

times, on petition of the superintendent or of any person or persons

qualified with respect to any procedure or right therein which is in

question, be subject to the supervision and control of the supreme court

in the judicial district in which such company has its home office, in

like manner as elections for state, county and municipal officers, so

far as analogous thereto.

(l) The inclusion by any such company of the name of any person in any

list of policyholders required by this section shall not be construed as

an admission by the company of the validity of any policy or contract

and no such list shall be competent evidence against the corporation in

any action or proceeding in which the question of the validity of any

policy or contract or of any claim under it is involved.

(m) (1) No insurance company, and no officer, agent or employee

thereof shall knowingly omit, from any list or card catalogue herein

required to be filed, the name of any policyholder required to be

included therein, or shall knowingly omit to give the correct name and

address of such policyholder, or shall knowingly give a wrong address,

or shall expend, advance or lend any money of the company contrary to

the provisions of this section.

(2) Except where such expenditure is otherwise authorized or required

by this section, no money of the company shall be expended in connection

with any such election or in canvassing therefor, and no officer or

agent of the company shall directly or indirectly make any advance or

loan of such moneys to any person in connection with or for the purpose

of such election or canvass unless the expenditure or loan is in a

contested election and shall be limited to reasonable amounts authorized

by the board of directors of the company and approved in advance by the

superintendent.

(3) No officer, salaried agent or employee of any such company shall,

within the period between the filing of the nominations and the

election, during business hours, devote any of his time to soliciting

votes in support of or in opposition to any candidate or list of

candidates in connection with any such election of directors. No

officer, agent or employee of any such company shall compel or coerce

any other such officer, agent or employee to support, work for, or

oppose any candidate or any list of candidates. Neither the stationery

or supplies of any such company nor office space devoted to the conduct

of its business shall be used for furthering the interest of any ticket

or candidate at any election of directors. Notwithstanding the above,

the company may utilize the time of officers, employees and agents,

office space, stationery and supplies in circumstances where money of

the company may be expended pursuant to paragraph two of this

subsection, but no officer, employee or agent shall in connection with

any election be coerced to undertake activity outside the scope of the

duties of the position of such officer, employee or agent.

(4) No person, firm or corporation, whether connected with such

company or otherwise, shall issue or cause to be issued any circular or

other written or printed communication, either in behalf of or in

opposition to any ticket or any candidate for election as director of

such company which contains any false statement.

(5) No policyholder shall sell or offer to sell any vote or proxy for

any sum of money or anything of value. No agent shall be paid or receive

any sum of money or anything of value in connection with the voting of a

ballot or obtaining of a proxy.

(n) In addition to the procedures described in this section, a

domestic mutual life insurance company may, upon approval of the

superintendent, offer policyholders alternate methods of voting in an

uncontested election and receiving materials related thereto, including

via electronic means. The superintendent may approve such methods if he

or she finds that they are consistent with the requirements of law and

equitable and reasonable for the company's policyholders. The

superintendent may issue such rules and regulations as he or she deems

necessary to implement the provisions of this subsection.