BYLAWS OF MISSISSIPPI SURPLUS LINES ASSOCIATION
A NON PROFIT CORPORATION
NAME, PURPOSE, POWERS, OFFICES AND REGISTERED OFFICE
Section 1. Name. The name of the non-profit corporation is Mississippi Surplus Lines Association (“MSLA”).
Section 2. Purpose. Miss. Code Ann. § 83-21-21(3), as amended effective July 1, 1997, provides that the Commissioner of Insurance may rely upon the advice and assistance of a duly constituted association of surplus lines producers in carrying out the purposes of the laws on foreign insurance companies contained in Title 83, Chapter 21 of the Miss. Code Ann. (1972). MSLA was established to serve this role. On September 18, 1997, MSLA was created by filing Articles of Incorporation with the Mississippi Secretary of State.
Miss. Code Ann. § 83-21-21(5) expressly provides that the “association shall provide a means for the examination of all surplus lines coverages written to determine whether such coverages comply with the law and such rules or regulations issued by the Commissioner of Insurance.” The Commissioner may suspend or revoke the acceptance of the association “if it does not maintain and enforce rules and regulations which will ensure that members will comply with [Title 83, Chapter 21], other applicable state law or rules or regulations promulgated under either.” Miss. Code Ann. § 83-21-21(6) (b).
The surplus lines statutes further contemplate that the association shall conduct operations that relieve the Commissioner of Insurance of duties otherwise required of him under the laws on foreign insurance companies contained in Title 83, Chapter 21. See Miss. Code Ann. § 83-21- 21(8) (1972). This could include any duties related to “a stamping procedure for all eligible non-admitted/surplus lines insurance policies sold on risks subject to the payment of premium taxes,” which the Commissioner is authorized to establish under Miss. Code Ann. § 83-21-21(2) (1972).
Section 3. Powers. MSLA shall have and exercise all of the powers necessary and incident to achieving the purposes of the above-referenced statutory provisions including, but not limited to, the powers set forth in these By-laws.
Section 4. Office. The office of MSLA shall be at 1430 Lelia Drive, Post Office Box 5347, Jackson, Mississippi 39296-5347, or such other place as the Board of Directors from time to time may select.
Section 5. Registered Office and Registered Agent. The address of the registered office for MSLA is 125 South Congress Street, Suite 1700, Post Office Box 2132, Jackson, Mississippi 39225-2132. The name of the registered agent is C. Ted Sanderson, Jr.
SEAL AND FISCAL YEAR
Section 1. Seal. The seal of MSLA shall have inscribed on it the name of the corporation, and the words, “Non-Profit Seal.”
Section 2. Fiscal Year. The fiscal year of MSLA shall begin January 1 and end on December 31 of each year.
Section 1. General. Pursuant to Miss. Code Ann. § 83-21-21 (1972), the Commissioner of Insurance issued Bulletin 97-6, dated November 7, 1997, mandating that each licensed surplus lines producer is a member of MSLA.
Section 2. Annual Meeting. An annual meeting of the membership shall be held during each calendar year beginning in 1998 on a date and at a time and place to be designated by the Board of Directors of MSLA for the transaction of any business as may come before the membership, including the biannual election of directors beginning in 1999 as provided in Article IV, Section 3.
Section 3. Special Meetings. Special meetings of the membership may be called by a majority of the Board of Directors. Only business within the purpose or purposes described in the meeting notice required by Section 4 of this Article may be conducted at such special meeting.
Section 4. Notice of Meeting. A written or printed notice stating the place, date and time of a membership meeting, and in case of a special meeting, the purpose or purposes of the meeting, shall be given to each member by the Executive Director or by any other person authorized by the Board of Directors to call the meeting. This notice shall be sent to each member, either personally or by first class or registered mail, at least ten (10) days, but not more than sixty (60) days, before the date designated for the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to each member at its last known address.
In the event there is to be brought before the membership at an annual meeting any matter which must be approved by the membership pursuant to Miss. Code Ann. §§ 79-11-269, 79-11-281, 79-11-301, 79-11- 315, 79-11-323, 79-11-331, 79-11-333 or 79-11-335, as amended, the notice of the annual meeting must include a description of such matter.
Section 5. Waiver of Notice. A member, either before or after a membership meeting, may waive notice of the meeting; and the waiver shall be deemed the equivalent of giving notice. Such waiver must be in writing, signed by the member and delivered to MSLA for inclusion in the minutes or filing with the corporate records. Attendance at a membership meeting of a member entitled to notice shall constitute a waiver of notice of the meeting unless the member attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called or convened.
Section 6. Actions by Ballot without Meeting. Any action that may be taken at any annual or special meeting may be taken without a meeting if MSLA delivers a written ballot to every member entitled to vote and the other requirements are met of Miss. Code Ann. § 79-11-211 (1972).
Section 7. Adjournments. Any meeting of the membership may be adjourned to a different date, time or place and notice need not be given of the new date, time or place other than by announcement at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting at which a quorum is present or represented, any business may be transacted which could have been transacted at the meeting originally called.
Section 8. Actions by Consent Without Meeting. Any action that has to be approved by the members may be approved without a meeting or ballots if approved by members holding at least eighty percent (80%) of the voting power. The action must be evidenced by one or more consents describing the action taken, signed by those members representing at least eighty percent (80%) of the voting power.
Section 9. Voting. Each member shall be entitled to one (1) vote in all matters for which members of MSLA are entitled to vote by law.
THE BOARD OF DIRECTORS
Section 1. Powers. All corporate powers shall be exercised by or under the authority of, and the affairs of MSLA managed under the direction of, its Board of Directors (the “Board”). From among the Board’s members, the Board shall elect a Chairman of the Board and a Vice Chairman of the Board who shall serve in such positions until the Board elects a new Chairman or Vice Chairman. The Chairman, and in his absence, the Vice Chairman, shall preside over Board meetings. Each director shall be qualified to vote on any issue that may properly come before the Board and to hold any office to which he may be elected or appointed.
Section 2. Number and Composition of Board. The number of directors shall be seven (7) and the names and addresses of the persons who are to serve as the initial directors are:
W. M. Bryson
Post Office Box 16174
Jackson, Mississippi 39236-6174
H. C. Garrard
2829 Lakeland Drive, Suite 1400
Jackson, Mississippi 39208-9722
Preston H. Gough, Jr.
Post Office Box 5108
Jackson, Mississippi 39296-5108
Robert P. Keul
Post Office Box 4110
Scottsdale, Arizona 85261-4110
W. W. (Bill) Norcross
Post Office Box 14247
Jackson, Mississippi 39236-4247
Charlie M. Phillips
Post Office Box 16174
Jackson, Mississippi 39236-6174
Thomas G. Quaka
Post Office Box 4448
Jackson, Mississippi 39216-4448
When deemed in the best interest of MSLA, the membership may, at any annual meeting or special meeting called for such purpose, increase or decrease the number of directors.
Section 3. Election of Directors. Biannually beginning in 1999, directors shall be elected by the membership at the annual membership meeting. The Chairman of the Board shall appoint a nominating committee, subject to approval of the Board, at least ninety (90) days before the annual meeting to nominate individuals to fill the expiring terms of directors. The recommendations of the nominating committee shall be announced at least sixty (60) days before the annual meeting, and members shall be given ten (10) days after such announcement to make additional nominations of members who have signified their willingness to stand for election by petition supported by no less than ten (10) percent of the members. Ballots shall be mailed to members at least thirty (30) days prior to the annual meeting indicating the nominations by the nominating committee and any additional nominations by petition. The result of the election shall be counted the day prior to the annual meeting by persons appointed by the Board.
Section 4. Term of Office. The term of office for directors (including the initial directors identified above) shall be two (2) years. Directors may be reelected for successive terms.
Section 5. Resignation and Removal of Directors. A director may resign at any time by giving written notice to the Board, the Chairman of the Board, or the Secretary/Treasurer of MSLA. Such resignation shall take effect on the date of receipt or at any later time specified in said notice. The members may remove a director without cause at a meeting noticed for such purpose and if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.
Section 6. Vacancies. Vacancies on the Board, including a vacancy resulting from an increase in the number of directors, shall be filled by member election at the next annual meeting of the membership or at a special meeting of the membership called for such purpose; provided, however, the remaining directors may fill the vacancy until the annual or special meeting by affirmative vote of a majority of all directors remaining in office. Any vacancy filled by member election shall serve for the remaining term of the director whose vacancy was filled.
Section 7. Compensation and Reimbursement. Directors shall serve without compensation, but may be reimbursed for reasonable and necessary expenses incurred by them as members of the Board.
MEETINGS AND ACTIONS OF THE BOARD
Section 1. Meetings. The Board may hold regular or special meetings for the purpose, and at the date, time and place, determined by the Chairman or a majority of the Board. The regular meetings shall include an annual meeting after the annual membership meeting at which time the Board shall elect officers and consider other business. The Chairman may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
Section 2. Notice. The Chairman may issue a schedule for regular meetings. Once this is done, no further notice is required for a regular meeting. Special meetings of the Board must be preceded by at least two (2) days’ notice of date, time and place of meeting.
Section 3. Actions without Meeting. Board actions may be taken without a meeting if the action is taken by all directors. The action must be evidenced by one or more written consents describing the action taken, signed by each director.
Section 4. Quorum. A quorum of the Board consists of a majority of the directors in office immediately before a meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board unless applicable law provides otherwise and except for the following actions where the affirmative vote of a majority of directors, whether or not present at the meeting, is required:
1. Hiring or dismissing the Executive Director or any officer;
2. Approving contracts with an annual obligation of $10,000.00 or more;
3. Borrowing money;
4. Proposing amendments to the By-laws; and
5. Authorizing a bank signatory.
Section 5. Committees. The Board may by resolution create one or more committees of the Board and appoint directors to serve on them, consistent with Miss. Code Ann. § 79-11-265 (1972).
Section 6. Parliamentary Procedure. Roberts Rules of Order shall prevail at all Board and committee meetings unless otherwise provided in these By-laws or by applicable law.
OFFICERS, PRODUCERS AND EMPLOYEES
Section 1. General. MSLA shall have the officers described in these By-laws or created by the Board through resolution. The Board may also employ other employees or producers as it may deem necessary.
Section 2. Executive Director. The Executive Director shall be responsible for the day-to-day operations of MSLA subject to policies established by the Board. The Executive Director shall report on the activities of MSLA at the membership annual meeting pursuant to Miss. Code Ann. § 79-11-197 (1972).
Section 3. Secretary/Treasurer. The Secretary/Treasurer shall have responsibility for preparing minutes of directors’ and members’ meetings and for authenticating MSLA records. The Secretary/Treasurer shall also be the chief financial officer and shall report on the financial condition of MSLA at the membership annual meeting pursuant to Miss. Code Ann. § 79-11-197 (1972). The Secretary/Treasurer shall be elected from the members of the Board.
Section 4. Resignation or Removal. An officer, employee or agent may resign by giving notice to the Chairman. The Board may remove any officer, employee or agent at any time with or without cause, subject to any contractual obligations or applicable law.
MSLA may be dissolved by following the relevant provisions of Miss. Code Ann. § 79-11-333 through 79-11-345. In the event MSLA is dissolved and all of its liabilities have been satisfied, the Board shall transfer MSLA’s remaining assets (if any) to any successor association established under the surplus lines statutes and approved for such transfer by the Commissioner of Insurance or, if no such organization exists to which the Commissioner will approve the transfer, to any state fund designated by the Commissioner of Insurance.
Section 1. General. Subject to the provisions of Miss. Code Ann. § 79-11-281, MSLA shall indemnify an individual made a party to a proceeding because he is or was MSLA’s director, officer, employee or agent against liability incurred in the proceeding if:
(a) He conducted himself in good faith; and
(b) He in good faith believed:
(i) In the case of conduct in his official capacity with MSLA that his conduct was in its best interests; and
(ii) In all other cases, that his conduct was at least not opposed to its best interests; and
(c) In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
The determination of whether the indemnification is permissible because the individual has met the above standard of conduct, and the evaluation as to reasonableness of expenses, shall be made as set out in Miss. Code Ann. § 79-11-281(7).
Section 2. Absolute Indemnification. Notwithstanding anything above, MSLA shall indemnify a director, officer, employee or agent who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director, officer, employee, or agent of MSLA against reasonable expenses incurred by him in connection with the proceeding.
Section 3. Advance Expense Payments. MSLA may pay for or reimburse the reasonable expenses incurred by a director, officer, employee or agent who is a party to a proceeding in advance of final disposition of the proceeding if:
(a) The director, officer, employee or agent furnishes MSLA a written statement of his good faith belief that he has met the standard of conduct described in Section 1 above;
(b) The director, officer, employee or agent furnishes the corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and
(c) A determination is made that the facts then known to those making the determination would not preclude indemnification under Miss. Code Ann. § 79-11-101, et seq.
Determinations and authorizations of payment under this section shall be made in the manner specified in Miss. Code Ann. § 79-11-281(7).
Section 4. Insurance. Pursuant to Miss. Code Ann. § 79-11-281(a), the Board may authorize the purchase and maintenance of insurance on behalf of any individual who is or was a director, officer, employee or agent of MSLA against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee or agent, whether or not MSLA would have power to indemnify him against the same liability.
MSLA shall keep all records required by Miss. Code Ann. § 79-11-283 and any other relevant laws. This shall include, as permanent records, minutes of all meetings of its members and Board, a record of all actions taken by the members or directors without a meeting, and a record of all actions taken by committees of the Board as may be authorized pursuant to Miss. Code Ann. § 79-11-265. This shall also include a record of its members in a form that permits preparation of a list of the names and address of all members, in alphabetical order by class showing the number of votes each member is entitled to vote.
MISCELLANEOUS CORPORATE ACTS
Section 1. Signing of Checks, Notes and Other Instruments. Checks, notes, negotiable instruments, contracts, deeds, and other such legal documents shall be signed by the Chairman or Secretary/Treasurer or any other individuals from time to time designated by the Board.
Section 2. Deposits. All funds of MSLA shall be, from time to time, deposited to the credit of MSLA in such banks, trust companies or other depositories as the Board may select and shall be drawn out only by a check signed by the Chairman or the Secretary/Treasurer, or by automated facsimile signature under their control, or by those other individuals authorized by the Board.
Section 3. Audit. All the accounts and books of MSLA together with all supporting data shall be audited by a firm of disinterested certified public accountants approved by the Board.
Pursuant to Miss. Code Ann. § 79-11-315 (1972), an amendment to these By-laws to be adopted must be approved (a) by the Board if the amendment does not relate to the number of directors, the composition of the board, the term of office of directors, or the method or way in which directors are elected or selected; and (b) by the members of two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.