§ 1209. Management and by-laws of mutual insurance corporations. (a)
The management of the business and affairs of a domestic mutual
insurance corporation shall be vested in a board of directors.

(b) Such corporation shall have not less than seven directors. The
directors, except as provided in section four thousand two hundred ten
of this chapter, shall be elected at the annual meetings of the members,
and all except four of the directors of such corporation, elected after
the organization of the corporation is completed and it has been
licensed to issue insurance policies, must be members of the corporation
or officers of member corporations. At any time after the first annual
meeting, the directors may be divided into not exceeding three groups as
nearly equal as possible, and thereafter the directors in one group only
or their successors shall be elected annually as provided in the
by-laws. The board of directors of such corporation shall hold regular
meetings at least four times in each calendar year. At least one of such
meetings shall be held within this state and the other meetings may be
held elsewhere.

(c) The board of directors of such corporation shall elect such
officers as are provided for in the by-laws. At least one principal
officer shall be a director, but the number of officers and salaried
employees who are directors shall at all times be less than a quorum of
the board of directors, as prescribed in the charter or by-laws.

(d) The by-laws of any such corporation organized after January first,
nineteen hundred forty may be adopted at a directors' meeting held after
receipt from the superintendent of a certificate of incorporation and
before the issuance of a license to do an insurance business. The
by-laws, except as to corporations which elect their directors pursuant
to the provisions of section four thousand two hundred ten of this
chapter, may thereafter be made or amended only by a majority vote of
all members present in person or by proxy at any annual meeting or other
stated or special meeting called for such purpose, except that the board
of directors of any mutual insurance corporation may amend its by-laws
as to any provisions which do not impair the members' rights or enlarge
their obligations under insurance policies. The by-laws of any domestic
mutual insurance corporation which elects its directors pursuant to the
provisions of such section may be amended by the board of directors. No
by-law or amendment or repeal of a by-law of any domestic mutual
insurance corporation shall be effective until approved by the
superintendent. The superintendent may refuse such approval if he finds
that such by-law, amendment or repeal does not conform with the
requirements of law, or is not equitable to the corporation's
policyholders, or is inconsistent with its objects and purposes.

(e) No domestic mutual insurance corporation, except a domestic mutual
insurance company organized before January first, nineteen hundred forty
to do only marine protection and indemnity insurance, shall enter into
any agreement under which any person, partnership or corporation agrees
to pay all or a portion of the expenses of management of such insurance
corporation in consideration of an agreement to pay him either
commissions on premiums due the insurance corporation or any other
compensation for his services.

(f) No domestic mutual insurance corporation, except a domestic mutual
insurance company organized before January first, nineteen hundred forty
to do only marine protection and indemnity insurance, shall enter into
any agreement with any of the officers or directors, or with any firm or
corporation in which any such officer or director is pecuniarily
interested directly or indirectly, whereby the insurance corporation
agrees to pay, for the acquisition of business, any commission or other
compensation which under the agreement is increased or diminished by the
amount of such business or by the insurance corporation's earnings on
such business. Notwithstanding the foregoing, and upon application by a
domestic mutual insurance corporation, the superintendent may permit the
insurance corporation to enter into such an agreement with a firm or
corporation that is a licensed insurance producer if the superintendent
determines that: (1) the insurance corporation's policyholders will not
be adversely affected; (2) the officer or director has no pecuniary
interest directly in the insurance producer; and (3) any benefit to the
officer or director that accrues as a result of the agreement would not
be material in relation to the insurance corporation's overall premium
volume. Any such agreement approved by the superintendent shall be
subject to annual reviews and, where the superintendent determines such
agreement no longer conforms to this subsection, the superintendent
shall revoke his or her prior approval.