Nebraska § 44-231 - Domestic company; articles of incorporation; amendment; procedure; exception.

§ 44-231. Domestic company; articles of incorporation; amendment; procedure; exception.

Except as otherwise provided in the Insurers Demutualization Act, any domestic insurance company, association, or society, hereinafter called company, may amend its articles of incorporation from time to time without limitation so long as the articles as amended contain only such provisions as are authorized in original articles of incorporation under Chapter 44. Proposed amendments to the articles shall be made in the following manner:

(1) The board of directors of such company shall adopt, by a two-thirds vote of all of the directors thereof, the proposed amendments to the articles of incorporation;

(2) Prior to the meeting of the shareholders or members at which the proposed amendments are to be considered, the proposed amendments, with all matters relating thereto, shall be submitted to the Department of Insurance for examination. If satisfied that the interests of the policyholders of such company and all concerned are properly protected and that no reasonable objections exist to the proposed amendments to the articles, the department may approve the same or it may require change or modification prior to any approval, as it may deem best for the interest of those affected; and

(3) If the Department of Insurance requires any changes or modifications of the proposed amendments to the articles of incorporation, such amendments shall be in turn submitted to and be adopted by a two-thirds vote of all the directors of such company. The proposed amendments to the articles of incorporation as originally adopted or readopted, as the case may be, shall then be submitted to the shareholders or members of the company entitled to vote for adoption at a regular meeting or a special meeting thereof.

Except as hereinafter provided, notice of such a special meeting together with a description of the proposed amendment to the articles of incorporation shall be given to each shareholder or member entitled to vote in the manner authorized or approved by the department at least thirty days prior thereto.

If the proposed amendments to the articles of incorporation are to be considered at a regular annual meeting of the members or shareholders, the Director of Insurance may, in his or her discretion, require the giving of the same notice as is required for a special meeting.

If the proposed amendments to the articles of incorporation are to be considered at a special meeting of the members of a mutual or assessment company or at a regular annual meeting thereof, notice of which has been required, the Director of Insurance may, upon application of the board of directors of such company, permit the company to exclude from the members entitled to notice those who in the opinion of the director are not reasonably ascertainable.

If the proposed amendments to the articles of incorporation are adopted by a two-thirds vote of all the stock, if a stock company, by a vote of two-thirds of the members voting at such meeting in person or by proxy, if a mutual or assessment company, or pursuant to the Insurers Demutualization Act, then they shall be filed in the same offices as original articles of incorporation as provided in section 44-205, and the same notice shall be published.

Fraternal benefit society may change into a mutual legal reserve life insurance company, but obligations of its existing contracts remain unimpaired. Royal Highlanders v. Wiseman, 140 Neb. 28, 299 N.W. 459 (1941).

This section and the proceedings thereunder to transform a mutual insurance company into a stock company were constitutional and regular. Leininger v. North Am. Nat. Life Ins. Co., 115 Neb. 801, 215 N.W. 167 (1927).

Section is constitutional and applies only to companies existing at the time the statute was adopted. State ex rel. Martin v. Howard, 96 Neb. 278, 147 N.W. 689 (1914).