611.78 Transfer of business or assets.

(1) Sale, lease, exchange or mortgage of a stock corporation's assets. Except as modified by subs. (2) and (3), ss. 180.1202, 180.1706 and 180.1708 (6) apply to stock corporations.

(1m) Sale, lease, exchange or mortgage of a mutual's assets.

(a) Except as modified by subs. (2) and (3), a sale, lease, exchange or other disposition of less than substantially all of the property and assets of a mutual, and the mortgage or pledge of any or all property and assets of a mutual, whether or not made in the usual and regular course of its affairs, may be made upon the terms and conditions authorized by the mutual's board of directors. Unless otherwise provided by the articles of incorporation, consent of the members is not required for a sale, lease, exchange or other disposition of property, or for a mortgage or pledge of property, authorized under this paragraph.

(b) A sale, lease, exchange or other disposition of all or substantially all of the property and assets of a mutual may be made upon such terms and conditions as may be authorized in the following manner:

1. If the articles of incorporation give members the right to vote on the sale, lease, exchange or other disposition of all or substantially all of the mutual's property and assets, the board of directors shall adopt a resolution recommending the sale, lease, exchange or other disposition and directing that it be submitted to a vote at an annual or special meeting of the members. Written notice stating that the purpose, or one of the purposes, of the meeting is to consider the sale, lease, exchange or other disposition of all, or substantially all, of the property and assets of the mutual shall be given to each member entitled to vote at the meeting, within the time and in the manner provided by this chapter for providing notice of member meetings. At the meeting, the members may authorize the sale, lease, exchange or other disposition and may authorize the board of directors to fix any or all of the terms and conditions of the sale, lease, exchange or other disposition. The authorization shall be by the affirmative vote of at least two-thirds of the members present or represented by proxy at the meeting. After the authorization by a vote of the members, the board of directors, nevertheless, in its discretion, may abandon the sale, lease, exchange or other disposition, subject to the rights of 3rd parties under any contracts relating thereto, without further action or approval by the members.

2. If the articles of incorporation do not give members the right to vote on the sale, lease, exchange or other disposition of all or substantially all of a mutual's property and assets, the sale, lease, exchange or other disposition may be authorized by the vote of the majority of the directors in office.

(2) Report to commissioner. Any action by which an insurance corporation proposes to transfer to another person or to reinsure any part of its insurance business, other than in the normal and usual course of business, or to sell, lease, exchange, mortgage, pledge or otherwise dispose of or encumber more than one-fourth of its assets, shall be reported to the commissioner not less than 30 days in advance of the proposed effective date. The commissioner may defer the effective date for an additional period not exceeding 30 days by written notice to the corporation before expiration of the initial 30-day period.

(3) Disapproval. The commissioner may, within the 30-day period or its extension, prohibit the proposed action if it is contrary to law or to the interests of insureds or the public or if it will make possible the circumvention of any of the requirements of ss. 611.71 to 611.77.

History: 1971 c. 260; 1979 c. 102; 1989 a. 303; 1997 a. 79; 1999 a. 30.