§ 31A-5-409. Selection and removal of directors and officers of mutuals.

(1) The articles or bylaws of a mutual shall state:

(a) the number of directors of the mutual including the directors that are:

(i) appointed as public directors under this Subsection (1) and Subsection (2); or

(ii) elected under Subsection (3);

(b) the number of directors of the mutual that may be appointed as public directors; and

(c) the plan that specifies the manner in which:

(i) a public director is to be appointed; and

(ii) a director who is not a public director is to be elected.

(2)

(a) The plan for the appointment of public directors specified in Subsection (1) shall assure true public representation on the board.

(b) A person appointed as a public director shall have insurance business or other business or professional experience that qualifies that person to serve responsibly and impartially as a director.

(c) A public director may be an uncompensated member of the board of directors.

(d) Notwithstanding Subsection (2)(c), a public director shall meet the qualifications of Subsection (2)(b).

(3)

(a) A director who is not a public director shall be elected by:

(i) the policyholders; or

(ii) voting members.

(b) If the directors who are not public directors are divided into classes, one class shall be elected:

(i) at least every four years; and

(ii) for a term not exceeding six years.

(4) A director may be removed from office for cause by an affirmative vote of a majority of the full board at a meeting of the board called for that purpose.

(5) Subject to Subsections (1) through (4), Section 16-6a-810 applies to vacancies on the governing board.

Amended by Chapter 308, 2002 General Session