Section 1201. Incorporation of stock or mutual insurance companies

(a) A
  corporation may be organized and licensed to do an insurance business in
  this  state  by  taking  the  following  successive  steps,  subject  to
  applicable requirements of this chapter:
    (1)  The  proposed  incorporators,  comprising  at  least nine natural
  persons (except as provided in section six thousand four hundred two  of
  this  chapter),  shall  submit  to  the  superintendent, in writing, the
  corporation's proposed name, the county in which  its  principal  office
  will  be  located,  and  the  name  and address of a public newspaper of
  general circulation in such county.
    (2) If the superintendent approves the proposed  name  and  newspaper,
  each  as  conforming  to the requirements of law, he shall so notify the
  proposed  incorporators,  or  their  representative,  in  writing.  Such
  approval  shall  become  void  if  within  six  months from its date the
  declaration and charter referred to in paragraphs four and  five  hereof
  are not filed pursuant to paragraph six hereof.
    (3)  The proposed incorporators shall publish in such newspaper, twice
  a week for three successive weeks or once  a  week  for  six  successive
  weeks,  a  notice  of  intention to form such a corporation, stating its
  proposed name, the kinds of insurance business  to  be  transacted,  the
  names and city and state of residence of the proposed incorporators, the
  location  of  its  principal  office  in  this  state,  and,  if a stock
  corporation, the amount of its proposed initial capital.
    (4) The proposed incorporators shall  submit  to  the  superintendent:
  (A)  proof  of  such publication by the affidavit of the publisher or of
  his foreman or clerk; and
    (B) a declaration, signed by each incorporator and  duly  acknowledged
  before   a   notary   public   or   other  officer  authorized  to  take
  acknowledgments of conveyances of real property within this state.
    (5) (A) Such declaration shall be in the English language, shall state
  the proposed incorporators' intention to form a corporation to do one or
  more kinds of insurance business authorized by section one thousand  one
  hundred  thirteen of this chapter, shall specify the paragraphs defining
  such kinds of insurance business and shall  set  forth  a  copy  of  the
  corporation's proposed charter.
    (B) The corporation's proposed charter shall contain:
    (i)  the corporation's name, which shall include a distinctive word or
  words, and, if a mutual corporation, shall contain the word "mutual";
    (ii) the place where its principal office is to be located;
    (iii) the kinds of insurance to  be  transacted,  specified  as  above
  required;
    (iv) the manner in which corporate powers are to be exercised;
    (v)  the  number  of  directors,  or  that it shall be not less than a
  stated minimum nor more than a stated maximum.  Except  as  provided  in
  section  six  thousand  four  hundred  two of this chapter the number of
  directors shall not be less than seven. As used in this item, "number of
  directors" means the total number of  directors  which  the  corporation
  would have if there were no vacancies;
    (vi)  the  times  and  manner  of electing directors and officers, the
  manner of filling vacancies, and provision that each director  shall  be
  at least eighteen years of age and that at all times a majority shall be
  citizens  and residents of the United States, and that not less than one
  shall be a resident of this state;
    (vii) the names and city and state of residence of the directors,  who
  shall serve until the first annual meeting of such corporation;
    (viii)  the  duration  of  its corporate existence, which shall be not
  less than thirty years;
    (ix) the amount of its capital, if a stock corporation; and

    (x) any other  particulars  necessary  to  explain  the  corporation's
  objects, purposes, management and control.
    (C)  The  corporation's  proposed  charter  may authorize the use in a
  foreign country where it does or proposes to do business of a  specified
  translation of its name in any language commonly used in such country.
    (D)  The  superintendent  may,  by  regulation,  prescribe  additional
  information to be required, pursuant to this paragraph, of all companies
  or of any kind of company.
    (6) The superintendent  shall  transmit  such  proof  of  publication,
  declaration,  and  charter  to  the attorney general. If approved by the
  attorney  general,  as  conforming  to  the  requirements  of  law,  the
  superintendent  shall  thereupon  file  them  in  his office and issue a
  certified copy thereof to the proposed incorporators.  If  requested  by
  such proposed incorporators, the superintendent shall also issue to them
  a certificate of incorporation executed by him in the name of the people
  of  the  state  and  thereupon  such  incorporators  shall become a body
  corporate and have the powers enumerated in paragraph seven hereof,  but
  such corporation shall not be authorized to do the business of insurance
  until it obtains a license therefor.
    (7) Every stock corporation, upon compliance with this chapter and the
  business  corporation  law, may create and issue the number of shares of
  capital stock stated in its charter which may be of one or more classes.
  If the charter authorizes shares which are entitled to preference in the
  distribution of dividends or assets it shall provide that:
    (A) their dividend yield shall not exceed a rate equal to the  maximum
  rate  of  interest  provided in section 5-501 of the general obligations
  law, in effect at the time such shares are offered for sale; and
    (B) the dividends may not be cumulative for more than three years.
    (8)(A) A stock corporation shall have power to:
    (i) open books to receive subscriptions to its capital shares,
    (ii) keep them open until all such  shares,  or  so  many  as  may  be
  necessary  to  satisfy  the minimum capital requirements, are subscribed
  for,
    (iii) receive payment for such subscriptions,
    (iv) invest the monies as prescribed in this chapter, and
    (v)  expend  money  or  incur  liabilities  necessary  or  proper   as
  organization   expenses,  to  be  paid  out  of  the  proceeds  of  such
  subscriptions, such expenses not to exceed the maximum amount prescribed
  in its permit to solicit such subscriptions.
    (B) The corporation shall not  solicit  subscriptions  to  its  shares
  until  it receives a permit therefor from the superintendent which shall
  be issued after the corporation submits to him an estimate of the  total
  amount  to  be  expended  for organization expenses, and he approves the
  estimate. Such estimate shall be recited in the permit, which shall  fix
  the maximum amount, to be prescribed by the superintendent, which may be
  expended for organization expenses.
    (C)  Such  corporation  shall not employ, as agents or brokers to sell
  its securities to the public, any persons who have not complied with the
  requirements of section one thousand two hundred four of this article.
    (9) (A) A mutual corporation shall have power to:
    (i) receive monies necessary to comply with the requirements  of  this
  chapter relative to its initial surplus fund;
    (ii)  borrow  such monies in accordance with the provisions of section
  one thousand three hundred seven of this chapter;
    (iii) open books to receive applications for  insurance  from  persons
  desiring and eligible to become members;

    (iv)   keep   them  open  until  the  minimum  number  and  amount  of
  applications, and the premium payments  thereon,  as  required  by  this
  chapter are received;
    (v) invest the monies as prescribed in this chapter for the investment
  of the minimum surplus of a mutual insurance company; and
    (vi)  expend  money  or  incur  liabilities  necessary  or  proper  as
  organization expenses, such expenses not to exceed  the  maximum  amount
  prescribed in its permit to solicit such applications.
    (B)  The  corporation  shall not solicit applications for insurance or
  receive premium payments thereon until it  receives  a  permit  therefor
  from the superintendent. The permit shall be issued after:
    (i)  the  superintendent  is  satisfied,  by  such  evidence as he may
  require or by such examination  as  he  may  deem  expedient,  that  the
  corporation holds in trust for prospective policyholders and creditors a
  fund,  in  cash  or  securities acceptable to him, at least equal to the
  amount required as its initial surplus fund,  such  trust  to  terminate
  when  a license to do an insurance business of the kinds provided in the
  corporate charter has been obtained, and
    (ii) the corporation submits to the superintendent an estimate of  the
  total  amount  to be expended for organization expenses, and he approves
  the estimate. Such estimate shall be recited in the permit, which  shall
  fix  the  maximum  amount, to be prescribed by the superintendent, which
  may be expended for organization expenses.
    (10)  The  directors  and  incorporators  of  any  stock   or   mutual
  corporation  shall be jointly and severally liable for all its debts and
  liabilities until it is licensed to do an insurance business of the kind
  or kinds proposed.
    (b) This section  shall  not  apply  to  co-operative  fire  insurance
  companies,  fraternal benefit societies, or corporations organized under
  article forty-three or sixty-seven of this chapter.