| (1) Number. The officers of the association are the
chair of the board of directors, the vice chair of the board of directors,
the secretary, the treasurer, and other officers as the Commissioner
may desire, all of whom are elected by the board of directors. No
two offices may be held by the same person except for the offices
of secretary and treasurer.
(2) Election and term of office. The officers of the
association are elected annually by the board of directors at the
first meeting of the board of directors held after each annual meeting
of the members or as soon as practical following the annual meeting.
Each officer must hold office until a successor has been duly elected
and qualified or until the officer's resignation, death, or removal.
(3) Removal and vacancies. Any officer or agent elected
or appointed by the board of directors may be removed by the board
of directors whenever, in its judgment, the best interests of the
association would be served or otherwise in accordance with this subchapter,
but such removal is without prejudice to the contract rights, if any,
of the person so removed. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled
by the board of directors for the unexpired portion of the term.
(4) Chair of the board. The chair of the board must
preside at all meetings of the members and at all meetings of the
directors, appoint and discharge employees and agents of the association
subject to the approval of the directors, fix the compensation of
employees and agents, make and sign contracts and agreements in the
name of the association, and appoint committees. The chair of the
board must ensure that the books, reports, statements, and certificates
are properly kept, made, and filed, if necessary, and the chair of
the board must generally do and perform all acts incident to the office
of chair of the board or that may be authorized or required by law,
by this subchapter, or by the board of directors, not inconsistent
with this subchapter.
(5) Vice chair of the board. The vice chair, elected
by the board of directors, has powers and must perform duties as assigned
to the vice chair, not inconsistent with this subchapter.
(6) Secretary. The secretary must:
(A) keep the minutes of the members and of the board
of directors' meetings in one or more books provided for that purpose;
(B) provide all notices as required by the provisions
of this subchapter. In case of the secretary's absence or refusal
or neglect to give the required notice, notice may be given at the
direction of the chair of the board of directors, or of the members
upon whose request the meeting is called;
(C) be custodian of the association's records;
(D) keep a register of the post office address of each
member;
(E) annually determine each member's participation
in the association in the manner required by the Act and this subchapter
and keep a register of each member's percentage of participation;
and
(F) in general, perform all duties incident to the
office of secretary and such other duties as from time to time may
be delegated to the secretary by the chair of the board or by the
board of directors.
(7) Treasurer. The treasurer must have custody of all
funds, securities, evidences of indebtedness, and other valuable documents
of the association, including those attributable to the stabilization
reserve funds. The treasurer must receive and give, or cause to be
given, receipts and acquittances for money paid in on account of the
association, and pay out of the funds on hand all just debts of the
association, of whatever nature, upon maturity of the debts. The treasurer
must enter, or cause to be entered, in books of the association to
be kept for that purpose, full and accurate accounts of all money
received and paid out on account of the association, and whenever
required by the board of directors, the treasurer must keep, or cause
to be kept, other books as would show a true record of the reserves,
expenses, losses, gains, assets, and liabilities of the association.
(f) Fiscal year. The fiscal year of the association
is the calendar year.
(g) Waiver of notice. Whenever any notice is required
to be given to any members or director of the association under the
provisions of this subchapter, a waiver in writing signed by the person
or persons entitled to notice is deemed equivalent to the giving of
such notice.
(h) Protection of directors and officers.
(1) Any person or insurer made or threatened to be
made a party to any civil, criminal, administrative, or investigative
action, suit, or proceeding (other than an action by or in the right
of the association) because such person or insurer is or was a member
or is serving or served on a committee or is or was an officer or
employee of the association or is or was serving any other entity
or organization at the request of the association is entitled to be
indemnified by the association against all judgments, fines, amounts
paid in settlement, reasonable costs and expenses (including attorneys'
fees), and other liabilities actually and reasonably incurred (other
than for amounts paid to the association itself) as a result of such
threatened or actual action, suit, or proceeding except in relation
to matters as to which that person or insurer is finally adjudged
in such action, suit, or proceeding to be liable by reason of willful
misconduct in the performance of that person's or insurer's duties
or obligations to the association or other entity as previously provided
and, with respect to any criminal actions or proceedings, except when
such person or insurer believed or had reasonable cause to believe
that their conduct was unlawful.
(2) Indemnification must be provided whether or not
such person or insurer is a member or is holding office or is employed
or serving at the time of such action, suit, or proceeding, and whether
or not any such liability was incurred prior to the adoption of this
subchapter.
(3) Indemnification is not exclusive of other rights
such person or insurer may have, and passes to the successors, heirs,
executors, or administrators of such person or insurer.
(4) The termination of any such action, suit, or proceeding
by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent will not in itself create a presumption
that such person or insurer was liable by reason of willful misconduct
or that they had reasonable cause to believe that their conduct was
unlawful.
(5) In each instance that a question of indemnification
arises, entitlements thereto, pursuant to the condition set forth
in this subsection, must be determined by the board of directors by
a majority vote of a quorum consisting of directors that were not
parties to such action, suit, or proceeding or by the board of directors,
whether interested or disinterested, if based upon a written opinion
of legal counsel that the action, suit, or proceeding could qualify
for indemnification because of reasonable doubt that the directors
were liable by reason of willful misconduct in the performance of
duties or obligations to the association or other entity as provided
in this subsection, or that there was reasonable doubt that the directors
believed or had reasonable cause to believe that the conduct was unlawful,
and the board of directors must also determine the time and manner
of payment of such indemnification; provided, however, if any such
action, suit, or proceeding is terminated by compromise settlement,
indemnification in respect of such disposition must be made only if
such settlement had the prior approval of the board of directors,
and provided further that a person or insurer who or that has been
wholly successful, on the merit or otherwise, in the defense of a
civil or criminal action, suit, or proceeding of the character described
in this subsection will be entitled in every instance to indemnification
as authorized in this subchapter.
(6) Expense incurred in defending a civil or criminal
action, suit, or proceeding may be paid by the association in advance
of the final disposition of the action, suit, or proceeding, as authorized
by the board of directors in the specific case, upon receipt of an
undertaking by or on behalf of the person or insurer to repay the
amount, unless it is determined that the person or insurer is not
entitled to be indemnified by the association.
(7) Nothing in this subsection is deemed to preclude
a person or insurer who or that the board of directors has determined
not to be entitled to indemnification from asserting the right to
such indemnification by legal proceedings.
(8) Indemnification as provided in this subsection
is apportioned among all members, including any named in any such
action, suit, or proceeding, in the same manner as other operating
expenses of the association.
(i) Annual report. The treasurer must file with the
department annually, on or before the first day of March, a statement
that contains information on the association's transactions, condition,
operations, and affairs during the preceding calendar year. Such statement
must be in the form and contain the matters and information prescribed
by the department. The department may, at any time, require the association
to furnish additional information with respect to its transactions,
condition, or any matter considered to be material and of assistance
in evaluating the scope, operation, and experience of the association.
(j) Examinations. The department must examine the affairs
of the association in accordance with Insurance Code Chapter 401.
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