20-481.32. Management of domestic insurers subject to registration

A. Notwithstanding the control of a domestic insurer by any person, the officers and directors of an insurer may not be relieved of any obligation or liability to which they are subject by law and the insurer shall be managed so as to assure its separate operating identity consistent with this article.

B. This section does not preclude a domestic insurer from having or sharing a common management or the cooperative or joint use of personnel, property or services with one or more other persons under arrangements meeting the standards of section 20-481.12.

C. At least one-third of the directors of a domestic insurer and at least one-third of the members of each committee of the board of directors of any domestic insurer must be composed of persons who are not officers or employees of the insurer or of any entity controlling, controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee.

D. The board of directors of a domestic insurer shall establish one or more committees composed solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers.

E. Subsections C and D of this section do not apply to a domestic insurer if the person controlling the insurer, including an insurer, a mutual insurance holding company or a publicly held corporation, has a board of directors and committees that meet the requirements of subsections C and D of this section.

F. An insurer may make application to the director for a waiver from the requirements of this section if the insurer's annual direct written and assumed premium excluding premiums reinsured with the federal crop insurance corporation and federal flood program is less than three hundred million dollars. An insurer may also make application to the director for a waiver from the requirements of this section based on unique circumstances. The director may consider various factors including the type of business entity, volume of business written, availability of qualified board members and the ownership or organizational structure of the entity.