REPRESENTATIVES Stapleton, Olman, Evans, Jolivette, Wolpert, Calvert, G. Smith

To amend sections 3905.29, 3907.02, 3925.03, 3925.04,

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and 3941.05, to enact section 3901.73, and to

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repeal section 3901.43 of the Revised Code relative

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to the residency of the directors of insurance

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companies and the provision of copies of late

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filing notices to governing boards under the

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jurisdiction of the Department of Insurance, to

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rescind the statutory requirement that the

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Superintendent of Insurance annually file a report

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on insurer investments with the General Assembly,

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to allow the Superintendent to send certain forms

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electronically to insurers, and to provide

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mechanisms for changes in the number of directors

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and trustees of insurance companies.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 3905.29, 3907.02, 3925.03, 3925.04,	15
and 3941.05 be amended and section 3901.73 of the Revised Code be	16
enacted to read as follows:	17

Sec. 3901.73. The department of insurance shall forward a	18
copy of any written notice received from any insurance company or	19
health insuring corporation domiciled in this state that the	20
insurer or health insuring corporation will be late in making the	21
filing of any quarterly or annual financial statement, required	22
under Title XXXIX or Chapter 1751. of the Revised Code, to the	23
board of directors of the insurer or health insuring corporation	24
required to file the financial statement. The department shall	25
also provide the board the date on which the department received	26
the notice.	27

Sec. 3905.29.  (A) The superintendent of insurance shall	28
adopt the forms, instructions, and manuals prescribed by the	29
national association of insurance commissioners, for the	30
preparation and filing of statutory financial statements and other	31
financial information. However, the superintendent may by rule	32
adopt modifications to such prescribed forms, instructions, and	33
manuals as hethe superintendent considers necessary.	34

(B) For circumstances not addressed by the forms,	35
instructions, and manuals prescribed by the national association	36
of insurance commissioners, the superintendent may determine	37
accounting practices and methods for purposes of preparing	38
statutory financial statements and other financial information.	39

(C) The superintendent shall furnish each domestic insurance	40
company a printed copy of the forms for the filing of statutory	41
financial statements and other financial information required to	42
be made by it.	43

Sec. 3907.02.  The persons forming a company under section	44
3907.01 of the Revised Code shall file in the office of the	45
secretary of state articles of incorporation, signed by them,	46
setting forth their intention to form a company, which articles	47
shall comprise a copy of the charter they propose to adopt. The	48
charter shall set forth the name of the company, which shall not	49
be the corporate name or title used to designate any fire, life,	50
marine, or other insurance company existing under the laws of this	51
state, the place where it is to be located, the kind of business	52
to be undertaken, the manner in which its corporate powers are to	53
be exercised, the number of directors or trustees, the manner of	54
electing them and other officers, a majority of whom shall be	55
citizens of this state, the time of such election, the manner of	56
filling vacancies, the amount of capital to be employed, and such	57
other particulars as are necessary to explain and make manifest	58
the objects and purposes of the company, and the manner in which	59
it is to be conducted. The number of directors or trustees shall	60
be not less than five nor more than twenty-one. At any time the	61
number may be increased or diminished between the same limits, at	62
the will of the stockholders representing a majority of the stock	63
or a majority of the membersThe number of directors or trustees	64
may be fixed or changed at a meeting of the stockholders or	65
members called for the purpose of electing directors or trustees	66
at which a quorum is present, by affirmative vote of the holders	67
of a majority of the shares, or a majority of the members, which	68
are represented at the meeting and entitled to vote on the	69
proposal. In addition to the authority of the stockholders or	70
members to change the number of directors or trustees and the	71
manner in which the number may be fixed or changed, the articles,	72
code of regulations, or bylaws may authorize the directors or	73
trustees to change the number of directors or trustees, may	74
specify the manner in which the directors or trustees are to	75
change the number of directors or trustees and the limitations	76
upon the directors' or trustees' use of this authority, and may	77
authorize the directors or trustees who are in office to fill any	78
director's or trustee's office that is created by an increase in	79
the number of directors or trustees. No reduction in the number	80
of directors or trustees shall of itself have the effect of	81
shortening the term of any incumbent director or trustee.	82

Sec. 3925.03.  Within one month after the subscription books	83
of ana stock insurance company are filled, as provided in section	84
3925.02 of the Revised Code, and after the articles of	85
incorporation of a stock insurance company are filed with the	86
secretary of state, a majority of subscribers to the voting stock	87
shall hold a meeting for the election of not less than five nor	88
more than twenty-one directors. At any time thereafter theThe	89
number of directors may be increased or diminished between the	90
same limits, at the will of stockholders representing a majority	91
of the stock or a majority of the members. Each member of a	92
mutual insurance company is entitled to one vote, and eachby	93
amendment of the code of regulations or bylaws, if the number of	94
directors is included in the code of regulations or bylaws of the	95
company, or pursuant to a vote of the stockholders representing a	96
majority of the stock voting, in person or by proxy, at a meeting,	97
if the number of directors is included in the articles of	98
incorporation of the company. No reduction in the number of	99
directors shall of itself have the effect of shortening the term	100
of any incumbent director. Each stockholder in other companies is	101
entitled to one vote for each share of voting stock he holdsheld.	102
If their bylaws so provide, mutual companies may elect directors	103
for a term of three years, the term of office of one third of the	104
number elected to expire each year, and those who receive the	105
highest number of votes at the first election to serve for the	106
longest term.	107

From their own number theThe directors of such ana stock	108
insurance company shall choose, by ballot, a president, and also	109
fill vacancies that arise in the board, or in the presidency	110
thereofof the company.	111

Sec. 3925.04.  When convened at the office of the company,	112
the board of directors elected or appointed as provided in section	113
3925.03 or 3941.05 of the Revised Code, or a majority of the	114
board, may appoint a secretary and other officers or agents	115
necessary for transacting its business, and may pay such salaries	116
and take such securities as the board considers reasonable. The	117
board may ordain and establish bylaws and a code of regulations,	118
or make amendments to the bylaws or code of regulations previously	119
adopted, not inconsistent with the constitution and laws of this	120
state and of the United States, which appear necessary for	121
regulating and conducting the business of the company. New bylaws	122
or regulations shall not take effect until approved by the	123
superintendent of insurance and until a copy thereof is filed in	124
histhe superintendent's office. The board shall keep full and	125
correct records of its transactions, which shall be open at all	126
times to the inspection of the members or stockholders.	127

Sec. 3941.05.  A domestic mutual company has legal existence,	128
subject to the limitations prescribed in sections 3941.01 to	129
3941.34 inclusive, of the Revised Code, from the filing of its	130
articles of incorporation with the secretary of state. The	131
original incorporators may fix and call the first meeting and	132
adopt bylaws which thereupon shall be filed with the	133
superintendent of insurance, and may elect the first officers and	134
directors who shall continue in office until the first annual	135
meeting of the members. The number of directors shall not be less	136
than five nor more than twenty-one. The number of directors may	137
be increased or diminished between the same limits by amendment of	138
the code of regulations or bylaws pursuant to section 3941.09 of	139
the Revised Code, if the number of directors is included in the	140
code of regulations or bylaws of the mutual company, or pursuant	141
to a vote of the majority of the members voting, in person or by	142
proxy, at a meeting, if the number of directors is included in the	143
articles of incorporation of the mutual company. No reduction in	144
the number of directors shall of itself have the effect of	145
shortening the term of any incumbent director.	146

If a mutual company's code of regulations or bylaws so	147
provide, a mutual company may elect directors for a term of three	148
years, the term of office of one third of the number elected to	149
expire each year, and those who receive the highest number of	150
votes at the first election to serve the longest term. The	151
directors of a mutual company may choose, by ballot, a president	152
of the company and also fill vacancies that arise in the board, or	153
in the presidency of the company.	154

Section 2. That existing sections 3905.29, 3907.02, 3925.03,	155
3925.04, and 3941.05 and section 3901.43 of the Revised Code are	156
hereby repealed.	157