Procedures for Amendment or Renewal of Charter

  1. Law
  2. Georgia Code
  3. Insurance
  4. Domestic Stock and Mutual Insurers
  5. General Provisions
  6. Procedures for Amendment or Renewal of Charter

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  1. A domestic insurer may amend its charter for any lawful purpose by written authorization by the holders of a majority of the voting power of its outstanding capital stock, by members if a mutual insurer, or by affirmative vote of such a majority voting at a lawful meeting of stockholders or members of which the notice given to stockholders or members included prior notice of not less than ten days of the proposal to amend.
  2. Upon authorization of such an amendment, the insurer shall file in the office of the Commissioner of Insurance an application asking that its charter be so amended and a fee of $50.00 shall be paid to the Commissioner to be transmitted by him or her into the state treasury; and the Commissioner shall not receive said application until said fee shall be paid. The application with any and all exhibits that may be included shall be filed in triplicate, signed with the corporate name and under the corporate seal, and shall state:
    1. The name and character of the corporation, the city or town, and county in this state in which is located its principal place of business;
    2. The date of its original charter and any and all amendments to the charter, and the date or dates of renewal of the charter; and
      1. That it desires an amendment to its charter and the purpose of said amendment;
      2. There shall be annexed to the application a certificate in triplicate under the corporate seal of the insurer and executed by the insurer's president or vice-president and attested to by the secretary or assistant secretary under the seal of the corporation, setting forth that amendment has been authorized in writing by the holders of a majority of the voting power of the outstanding capital stock, by members if a mutual insurer, or by affirmative vote of such a majority voting at a lawful meeting of stockholders or members of which the notice given to stockholders or members included prior notice of not less than ten days of the proposal to amend.
  3. Immediately upon receipt of the triplicate copies of the application, with any and all exhibits included with the application, the Commissioner shall certify one of the copies of the application and deliver the same to the applicants and the same shall be published by the applicants once a week for four weeks in the newspaper in which is published the legal advertisements of the county where the principal office of said company is to be located. When the application, with any and all exhibits attached to it, shall have been published once a week for four weeks, the applicants may apply to the judge of the probate court of the county to certify the fact of such publication, which certificate shall be filed by the applicants in the office of the Commissioner. The Commissioner shall approve or disapprove the application within 45 days of the date the application is received by him or her.
  4. No amendment shall be granted which will reduce authorized capital of a stock insurer below the amount required by this title for the kinds of insurance thereafter to be transacted; and no amendment shall reduce the surplus of a mutual insurer below the amount required by this title for the kinds of insurance thereafter to be transacted.
  5. If an amendment of the charter would reduce the authorized capital stock of a stock insurer below the amount then outstanding, the Commissioner shall not approve the amendment if he has reason to believe that the interest of policyholders or creditors of the insurer would be materially prejudiced by such reduction. If any reduction of capital stock is effectuated, the insurer may require return of the original certificates of stock held by each stockholder in exchange for new certificates for such number of shares as the stockholder is then entitled in the proportion that the reduced capital bears to the amount of capital stock outstanding as of immediately prior to the effective date of the reduction.
  6. When the certificate of the judge of the probate court as to the fact of publication of the application for amendment to the charter and the certificate of the Commissioner as to his approval of the application for amendment shall have been received in the office of the Secretary of State, the Secretary of State shall issue to the corporation under the great seal of the state a certificate of amendment. The Secretary of State shall record the application for amendment to the charter, the certificate of approval of the Commissioner, the certificate of the judge of the probate court as to publication, and the certificate of amendment in a book to be kept by him for that purpose.
  7. A petition for renewal of the charter shall follow the procedure set forth in subsections (b) through (f) of this Code section, except that the fee for filing a petition for renewal of the charter shall be $100.00.

(Code 1933, § 56-1509, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1983, p. 3, § 24; Ga. L. 2000, p. 1307, § 3.)

OPINIONS OF THE ATTORNEY GENERAL

The word "upon" as used in subsection (b) of this section, when construed with all of the provisions of this section, must be given the meaning of "as soon as" or, at least, "within a reasonable time after." 1965-66 Op. Att'y Gen. No. 65-77.

This section was intended to apply to revivals the same as renewals of insurance company charters and that such revivals or renewals be approved by the Insurance Commissioner prior to issuance of a certificate by the Secretary of State. 1967 Op. Att'y Gen. No. 67-104.

Section applies to all nonprofit hospital service and medical service corporations.

- Since this section provides for both renewal and amendment of corporate charters, the provisions of that section govern the renewal and amendment of charters of nonprofit hospital service corporations and of nonprofit medical service corporations regardless of when such corporations might have been organized. 1973 Op. Att'y Gen. No. 73-94.

Section requires approval of majority of voting power at time petition is filed.

- This section requires that a petition for amendment to an insurer's corporate charter be filed within a reasonable time after approval by the stockholders and that consequently the certificate certifying that it has been approved by a majority vote of the voting power means a majority vote of the voting power at the time the petition for amendment is filed. 1965-66 Op. Att'y Gen. No. 65-77.

Section implies effective date of amendment is date of approval and filing by Secretary of State.

- This section is silent as to when an amendment becomes effective, or as to the right of the Secretary of State or Insurance Commissioner to approve a request that the effective date be prior to the approval of the amendment to the charter; however, the strong implication is that the effective date is the date the amendment is finally approved and filed by the Secretary of State after the amendment has been approved by the Insurance Commissioner. 1960-61 Op. Att'y Gen. p. 262.

Amendment may provide for new class of preferred stock.

- An insurance company may amend its charter to authorize an increase in its capital and provide for the issuance of a new class of preferred stock which meets the requirements of former Code 1933, § 56-1504 (see O.C.G.A. § 33-14-4(b)(5)) as to par value. 1958-59 Op. Att'y Gen. p. 197.

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 68.

C.J.S.

- 44 C.J.S., Insurance, § 173 et seq.


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