§ 3925. Bylaws; compulsory provisions
The bylaws of a cooperative insurance corporation to which a certificate of authority
is issued shall include substantially the following provisions:
(1) The corporate powers of such corporation shall be exercised by a board of directors,
who shall be not less than five in number. Such directors shall be divided into classes
and a portion only elected each year. They shall be elected for a term of not more
than four years each and shall choose a president, a secretary, and such other officers
as may be deemed necessary. After the first year, the directors shall be chosen at
an annual meeting to be held on the second Tuesday of January, unless some other day
is designated in such bylaws, at which meeting each person insured shall have one
vote and may be entitled to vote by proxy under such rules and regulations as may
be prescribed by the bylaws.
(2) Such corporation shall keep proper books, including a policy register, in which the
secretary shall enter the complete record of all its transactions and those of the
board of directors and executive committee. Such books shall at all times show fully
and truly the condition, affairs, and business of such corporation and shall be open
for inspection by every person insured, each day from nine o’clock in the forenoon
to four o’clock in the afternoon, Saturdays, Sundays, and legal holidays excepted.
(3) If authorized as an assessment cooperative insurance corporation as outlined in subsection 3920(a) of this title, such corporation may assess for the purposes specified in section 3927 of this title, and the bylaws shall specify the manner of giving notice of such assessments, which
may be either personal or by mail, and, if by mail, shall be deemed complete if such
notice is deposited, postage prepaid, in the post office at the place where the principal
office of the corporation is located, directed to the person insured at his or her
last known place of residence or business. A person insured who neglects or refuses
to pay his or her assessments, for that reason or for any other reason satisfactory
to the board of directors or its executive committee, may be excluded from such corporation
and, when thus excluded, the secretary shall cancel or withdraw his or her policy
or policies, subject to the cancellation provisions in sections 3879 through 3882
and chapter 113, subchapter 2 of this title, provided that such person shall remain
liable for his or her pro rata share of losses and expenses incurred on or before
the date of his or her exclusion and for the penalty herein provided, in case an action
is brought against him or her. If a member of such corporation is so excluded and
his or her policy so canceled, the secretary shall forthwith enter such cancellation
and the date thereof on the records kept in the office of the corporation and serve
notice of such cancellation on the person so excluded, as provided herein for the
service of notice of assessment. However, in such event, the person so excluded or
whose policy is so canceled shall be entitled to the repayment of an equitable portion
of the unearned paid premium on such policy. The officers of such corporation shall
proceed to collect all assessments within 30 days after the expiration of the notice
to pay the same. Neglect or refusal on their part so to proceed or to perform any
of the duties imposed on them by law shall render them individually liable for the
amount lost to any person, due to such neglect or refusal, and an action may be maintained
by such person against such officers to collect such amount. An action may be brought
by the corporation against a person insured therein to recover all assessments that
he or she may neglect or refuse to pay, and there may be recovered from him or her
in such action both the amount so assessed, with lawful interest thereon, and, as
a penalty for such neglect or refusal, 50 percent of such assessment in addition thereto.
(4) Any person insured by an assessment cooperative insurance corporation may withdraw
therefrom at any time by giving written notice to the corporation, stating the date
of withdrawal, paying his or her share of all claims then existing against such corporation,
and surrendering his or her policy or policies.
(5) Any person insured by a nonassessment cooperative insurance corporation may withdraw
from it at any time by giving written notice to the corporation stating the date of
withdrawal and surrendering his or her policy or policies.
(6) Persons residing or owning property within any state where the corporation is authorized
to do business may be insured upon the same terms and conditions as original members
and such other terms as may be prescribed in the bylaws of the corporation.
(7) The bylaws of such corporation may be amended at any time. (Amended 1981, No. 6, § 7; 1991, No. 184 (Adj. Sess.); 2003, No. 20, § 2; 2017, No. 80, § 8.)