Sec. 5. (a) At least a majority of the following must be made up of outside directors:
(1) The board of directors of an MIHC.
(2) The board of directors of a stock holding company that is not a wholly-owned subsidiary of an MIHC.
(3) The board of directors of a reorganized insurer that is not a wholly-owned subsidiary of an MIHC.
(4) Any audit committee or executive committee of the board of directors of:
(A) an MIHC;
(B) a stock holding company that is not a wholly-owned subsidiary of an MIHC; or
(C) a reorganized insurer that is not a wholly-owned subsidiary of an MIHC.
(b) All of the directors who are members of any management compensation committee of the following entities must be outside directors:
(1) An MIHC.
(2) A stock holding company that is not a wholly-owned subsidiary of an MIHC.
(3) A reorganized insurer that is not a wholly-owned subsidiary of an MIHC.
(c) All of the directors who are members of any pricing committee of the following entities with responsibility for approving the price of stock sold in any offering under this article must be outside directors:
(1) A stock holding company.
(2) A reorganized insurer.
(d) The commissioner may determine, after furnishing the affected company and director with notice and opportunity to be heard, that an individual does not qualify as an outside director or otherwise should not be considered an outside director. Such an individual may continue to serve as a director, but from the date the commissioner notifies the affected company in writing of the determination and the basis for the determination, the individual may not be considered an outside director.
(e) A director's failure to qualify as or be considered an outside director does not affect the validity of any action taken by the company, the board of directors, or any committee of the board of directors.
(f) Concurrent with the initial public offering of any securities of a stock holding company or a reorganized insurer, the majority of the members of the board of directors of the MIHC must be disinterested directors.
As added by P.L.5-2000, SEC.4.