Bylaws

THE SURPLUS LINE ASSOCIATION OF COLORADO, INC.
(A Colorado Non-profit Corporation)

Fourth Amended By Laws

Effective November 16, 2000
ARTICLE I
Offices

Business Office: The principal office of the corporation shall be in Denver, Colorado. The Corporation may also have one or more offices at such other place or places within or without the State of Colorado as the Board of Directors may from time to time determine or as the business of the corporation may require.

Registered Office: The registered office of the corporation shall be as set forth in the Articles of Incorporation, unless changed by the Colorado Business Corporation Act.

ARTICLE II
Filing-Office

This corporation is a voluntary, non-profit association of licensed surplus lines brokers, incorporated under the laws of the State of Colorado, and no part of its earnings shall inure directly to the benefit of any director, member or individuals.

The rules and regulations promulgated by the Insurance Commissioner with respect to surplus lines brokers, together with any subsequent amendments or additions, shall be binding upon the members of the corporation.
The corporation shall maintain a Surplus Lines Office, employ such personnel and maintain such facilities as may be necessary to:

Facilitate and encourage compliance with the laws of this State and the Rules and Regulations of the Insurance Commissioner relative to Surplus Lines Insurance;

Provide a means for the examination of all surplus lines coverages to determine whether such coverages comply with such laws and regulations;

Cooperate with organizations of admitted insurers, independent agents and brokers for the proper use of the surplus lines market;

Receive and disseminate information relative to surplus lines coverages.

Provide education to its members, other insurance professionals and the public regarding Surplus Lines Insurance or issues pertaining thereto.

The Board of Directors shall have full power to act in all matters relating to the Surplus Lines Office, including power to act for the corporation in dealings with the Insurance Commissioner of the State of Colorado relative to the conduct and operations of the Surplus Lines Office.
ARTICLE III
Membership

Membership: Membership in this corporation shall be open to any resident Surplus Lines Insurance broker licenses under the laws of the State of Colorado.

Application for Membership: Application for membership shall be made in such form and manner as determined appropriate by the Board of Directors from time to time. by the filing of such application for membership, each member shall be deemed to have accepted and to be bound and to abide by the requirements of the Articles of Incorporation, the By-laws and the rules and regulations of the corporations governing its membership, and to comply with the laws of the State of Colorado governing Surplus Line Insurance brokers.

Dues and Assessments of Members: The Board of Directors may establish from time to time, reasonable assessments against the members of the corporation to be paid by each member as dues for the financing and the carrying out of the functions and business affairs of the corporation. Such assessments shall be paid by the members in the manner as may be provided by the Board of Directors. In establishing the assessments and dues to be paid by the members of the corporation, the Board of Directors shall consider the budget needs and requirements of the corporation for the year in which such assessments are made.

Voting Rights: Each member in good standing shall be entitled to one vote on each matter submitted to a vote of the membership.

Termination of Membership: Membership in the corporation shall automatically terminate upon a member ceasing to be licensed as a surplus line broker in the State of Colorado. Membership of any member may also be terminated by action of the Board of Directors upon a showing of any of the following grounds, or combination thereof:

Failure of a member to pay the dues assessed against the membership;

Failure of a member to abide by or comply with the laws of the State of Colorado, and the rules and regulations adopted from time to time, governing the Surplus Lines Insurance business, or

Conviction of a felony or high misdemeanor showing moral turpitude.

A member may withdraw his membership upon the giving of thirty (30) days’ notice in writing addressed to the Board of Directors of the corporation.
ARTICLE IV
Meetings of Members

Annual Meetings: The annual meeting of the membership for the election of directors to succeed those whose terms expire and for the transaction of such other business as may come before the meeting shall be held at such time and place either within or without the State of Colorado, as shall be determined by the Board of Directors or by the President from time to time and designated in the Notice of the Meeting.

Special Meetings: Special meetings of membership for any purposes, unless otherwise prescribed by statue or by the Articles of Incorporation, may be called at any time by the President or Secretary upon with written request of thirty (30) percent of the membership entitled to vote at a meeting. Such request shall state the purpose or purposes of the meeting.

Notice of Meeting: Notice of each meeting of the membership, whether annual or special, shall be given not less than ten (10) nor more than fifty (50) days prior thereto to each ember or record entitled to vote thereat by delivering written or printed notice thereof to such member personally or by mailing the same to his address as it appears on the records of the corporation. The notices of all meetings shall state the place, day and hour thereof. The notice of a special meeting shall, in addition, state the purposes thereof.

Fixing Record Date: The Executive Director shall fix in advance a date, not less than ten (10) nor more than fifty (50) days preceding the date of any meeting of the membership, as a record date for the determination of the members entitled to notice of such meeting.

Voting List: At least ten (10) days before every meeting of the membership, a complete list of members entitled to vote thereat or any adjournment, thereof, arranged in alphabetical order, showing the address of each member, shall be prepared by the officer or agent of the corporation who has charge of the membership records of the corporation. Such list shall be open at the principal office of the corporation to the inspection of any member during usual business hours for a period of at least ten (10) days prior to such meeting, and such list shall be produced and kept at the time thereof and subject to the inspection of any member who may be present.

Organization: The President of Vice-President shall call meetings of membership to order and act as chairman of the meetings. In the absence of said officers, any member entitled to vote thereat, or any proxy of any such member may call the meeting to order and a chairman shall be appointed. In the absence of the Secretary and Assistant Secretaries of the corporation, any person appointed by the chairman shall act as Secretary of such meeting.

Quorum: A majority of the membership entitled to vote thereat shall when present in person or represented by proxy shall constitute a quorum at all meetings of the membership for the transaction of business except as otherwise provided by statutes, by the Articles of Incorporation, or by the By-laws. In the absence of a quorum at any such meeting, a majority of the members present in person or represented by proxy and entitled to vote thereat may adjourn the meeting to another time without further notice until a quorum shall be present or represented, or if at such subsequent meeting a quorum is not present or represented, then a majority of the members present in person or represented by proxy and entitled to vote, shall constitute a quorum for the transaction of business.

Voting: At every meeting of the membership each member having the right to vote shall be entitled to vote in person or by proxy executed in writing by such member or person or by proxy executed in writing by such member or by his duly authorized attorney in fact; provided, however, that no such proxy shall be valid after eleven (11) months from the date of its execution, unless such proxy expressly provided for a longer period.

When a quorum is present at any meeting, the vote of a majority of the membership having power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which express provision of a statue, or the Articles of Incorporation, or these By-laws, a different vote is required, in which case such express provision shall govern and control the decision of such question.

Conduct or Proceedings and Order of Business: At each annual meeting a full report of the business, affairs and conditions of the corporation for the year just ended shall be presented by the President. The order of business at the regular annual meeting of the membership, and, so far as applicable, at all other meetings, shall be as follows:

Calling the roll and determination of a quorum;

Proof of notice of meeting;

Reading and disposition of unapproved minutes from prior meetings;

Report of Board of Directors;

Report of officers;

Election of directors;

Disposition of unfinished business;

Presentation and disposition of new business;

Adjournment.

On questions of parliamentary procedure not covered by these By-laws, Roberts’ Rules of Order shall govern.
ARTICLE V
Board of Directors

Election and Tenure: The business and affairs of the corporation shall be managed by a Board of Directors who shall hold office for a term of two (2) years and shall be so elected that the terms of a majority of the directors, if there is an odd number of directors, or one half of the directors, if there is an even number, will expire in the even years, and the remainder in the odd years. Directors shall hold office until their successors have been elected and have qualified. The term shall commence immediately following the election. The term of the initial individual directors shall be determined by the Board at its organizational meeting.

Number and Qualification: The Board of Directors shall consist of five (5) members or a larger number as provided in the Articles of Incorporation.

Nomination of Directors: Not later than ninety (90) days prior to each annual meeting of the membership, the President shall appoint a nominating committee of three (3) members. Such committee shall consider all available candidates for the directorship and shall submit a slate of candidates at the meeting. Such submission shall be deemed a nomination of each person named. The committee may recommend one or more than one candidate for each vacancy to be filled. At the annual meeting of the membership additional nominations may be made by members from the floor.

Regular Meetings: Regular meetings of the Board of Directors shall be held at such time or times as may be determined by the Board of Directors and specified in the notice of such meeting.

Special Meetings: Special meetings of the Board of Directors may be called by the President on three (3) days’ notice to each director, either personally, by mail, by telegram or by telephone, and shall be called by the president or Secretary in like manner and on like notice on the written request of any two directors. The purpose of a special meeting of the Board of Directors need not be stated in the notice thereof.

Place of Meetings: Any meeting of the Board of Directors may be held at such place or places either within or outside of the State of Colorado as shall from time to time be determined by the Board of Directors or by the President and designated in the notice of the meeting.

Quorum: A majority of the number of directors fixed by paragraph two(2) of this Article V shall constitute a quorum at all meetings of the Board of Directors, and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice until a quorum shall be present.

Vacancies: Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors shall be filled by the affirmative vote of a majority of directors then in office or by an election at an annual meeting or at a special meeting of membership called for the purpose.

A Director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next annual meeting of the membership and until his successor shall be elected and shall qualify.

Fact Finding: The Board of Directors shall from time to time make, or cause to be made, investigation of the insurance market for the purpose of conveying information to members in order to enable members to comply with the Surplus Lines Laws.

Compensation of Directors: Directors shall not receive compensation for their services as a director. However, all directors may be allowed a fixed sum and expenses incurred for attendance at each regular or special meeting of the Board of Directors as may from time to time be fixed by resolution of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.
ARTICLE VI
Notices and Action Without Meeting

Notices: Whenever under the provisions of a statue or of the Articles of Incorporation of these By-laws, notice of required to be given to any director or member it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, postage prepaid and addressed to such director or member at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall be thus mailed.

Waiver of Notice: Whenever any notice whatever is required to be given under the provisions of a statute or of the Articles of Incorporation, or by those By-laws, a Waiver thereof in writing, signed by the person or persons entitled to said notice, whether before, at or after the time stated therein, or the appearance of such person or persons at such meeting, or in the case of a membership meeting, by proxy, shall be deemed equivalent thereto.

Action Without a Meeting: Any action required or which may be taken at a meeting of the directors or members of the corporation, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors or members as the case may be, entitled to vote with respect to the subject matter thereof.
ARTICLE VII
Officers

Election and Tenure: The Board may elect or appoint such other officers and assistant officers as may be determined by the Board. Any two or more offices may be held by the same person, except the offices of President and Secretary. Each officer of the corporation shall be elected by the Board of Directors annually for such terms not exceeding two successive two-year terms, as may be described in the Articles of Incorporation or these By-laws. Each officer shall be a director of the corporation. If the election of officers shall not be held at such meeting, such election shall be held at a special meeting of the Board of Directors to be scheduled as soon thereafter as may be convenient. Each officer shall hold office until his successor shall have been duly elected or until his/her death, resignation or removal, or until he shall cease to be a director of the corporation.

Resignation, Removal and Vacancies: Any officer may resign at any time by giving written notice thereof to the Board of Directors or to the President. Such resignation shall take effect on the date specified therein and no acceptance of the same be necessary to render the same effective.

Any officer may at any time be removed by the affirmative vote of a majority (2/3) of the number of directors specified in paragraph two (2) of Article V of these By-laws thereunto duly authorized. If any office becomes vacant for any reason, the vacancy may be filed by the Board of Directors. An officer appointed to fill a vacancy shall be appointed for the unexpired term of his predecessor in office.

President: The President shall be the chief executive office of the corporation. He shall preside at all meetings of the membership and shall have general and active management of the business affairs of the corporation. He shall see that all orders and resolutions of the Board of Directors are carried into effect and in general shall perform all duties as may from time to time be assigned to him by the Board of Directors.

Vice-President: The Vice-President shall perform such duties and possess such powers as from time to time may be assigned to him by the Board of Directors, or by the President. In the absence or inability of the President, the Vice-President shall perform the duties of the President.

Secretary: The Secretary shall give, or cause to be given, notice of all meetings of the membership and of the Board of Directors and shall attend all such meetings and keep a record of their proceedings. The Secretary shall be the custodian of the seal of the corporation and shall have power to affix the same to all documents, the execution of which on behalf of the corporation is authorized by these By-laws or by the action of the Board of Directors and, in general, shall perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to the Secretary by the Board of Directors or the President.

Treasurer: The treasurer shall give a bond for the faithful discharge of his duties if, and in such sum and with sureties as, the Board of Directors shall require. The Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation and deposit all such funds in the name of the corporation in such banks or other depositories as shall be selected by the Board of Directors. The Treasurer shall collect and receive and give receipts for all monies or securities belonging to the corporation. In general, the Treasurer shall perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to the Treasurer by the Board of Directors or by the President.
ARTICLE VIII
Administration of the Association

The Board of Directors shall appoint an Executive Director.

The Executive Director shall have power and authority;

To interpret the By-laws and rules and regulations of

the association.

To determine violations and the remedies therefor,

and whether or not the matter should be submitted to the Insurance Commissioner for a ruling.

To prescribe the procedure to be followed in matters coming before him under the powers hereby conferred. Findings and prescribed remedies of the Executive Director, under the powers hereby conferred shall be binding upon the members subject to the right of appeal hereinafter provided. The Executive Director shall give notice of his findings and prescribed remedies in matters involving violations to all parties interested.

The findings and prescribed remedies of the Executive Director shall be subject to appeal to the Board of Directors and the decision of the Board of Directors shall be subject to appeal to the Association as a whole. Appeal must be made in writing and filed with the Executive Director within ten (10) days from the date of service of the findings and prescribed remedy, from which appeal is taken; otherwise the findings or prescribed remedy of the Executive Director, or the decision of the Board of Directors, as the case may be, shall be final. To reverse or otherwise change the findings or prescribed remedy of the executive Director shall require a two-thirds vote of the Board of Directors of the association, and to reverse or otherwise change the decision of the Board of Director’s shall require a two-thirds vote by secret ballot of the entire membership of the Association, in both cases exclusive of the vote of the complaining member and the member complained against. When an appeal is taken the Board of Directors shall fix a date with due regard to the interests of the parties involved, but in no event later than 60(60) days after notice of appeal is filed, for a hearing thereon.

The Executive Director (1) upon direction of the Board of Directors or (2) upon written request of a member shall submit any such matters involving the Surplus Lines Law to the Insurance Commissioner.

The Executive Director shall have the right to inspect books and records of the members of the Association and their representatives for the purpose of determining the facts necessary to enable the Executive Director to resolve any issue before him. Members and their representatives shall disclose complete information and facts with respect to such issues on request of the Executive Director. Refusal or willful failure of a complainant or of a member complained against (or the representative of either) to recognize such rights of the Executive Director shall constitute a presumption of the invalidity or the validity of the complaint, as the case may be.

The Association shall have the power to make findings and to prescribe remedies for acts determined by the Association to be contrary to the provisions of law or the lawful provisions of the By-laws or rules and regulations of the Association, and shall have the power to expel or suspend a member from the Association for any such act be two-thirds vote of the entire membership. The power to prescribe remedies shall not include the power to impose money fines, but pecuniary loss such as a member might suffer on account of being required to cancel a policy or any other consequential loss shall not be considered a “money fine.”
ARTICLE IX
Income and Disbursements

The Association shall receive income from various sources, as described, and will use such income in accordance with these By-laws, the Memorandum of Understanding between the Colorado Division of Insurance and the Surplus Lines Association or other documents as approved by the Board of Directors.

In accordance with Colorado Statutes the Association shall be entitled to collect a fee on every surplus lines transaction in the State of Colorado. Such feel shall be determined by the Board of Directors and approved by the Colorado Division of Insurance every two years commencing in 2002. The revenue from such fee shall be utilized to perform those duties that would otherwise have to be performed by the Commissioner of Insurance in accordance with Article. The Association shall maintain a reserve fund amounting to two years operating cost.

The Association shall be entitled to charge non-resident producers a fee for filing taxes on their behalf. Such fee shall be determined by the Board of Directors. Such funds will be utilized for special projects that shall be determined by the Board of Directors and approved by the Colorado Division of Insurance.

The Association shall be entitled to retain any interest and/or dividend income derived from the fees in paragraphs 2 and 3 of this Article IX and shall have full discretionary power over such funds.

The Board of Directors may levy and collect from the members such dues and assessments as may be determined by the Board of Directors to be necessary to cover the expenses of the Association.

Funds of the Association shall be deposited in its name in a bank or banks domiciled in the State of Colorado designated by the Board of Directors.

Disbursements from the funds of the Association shall be subject to approval of the Board of Directors. The Secretary-Treasurer shall keep, or cause to be kept, a record of all receipts and disbursements. The Board of Directors shall employ a public accountant to audit the accounts of the Association prior to each annual meeting of members, and in its discretion, at any other time. A report of such annual audit shall be presented at the annual meeting.

The officers, the members of the Board of Directors, and employees of the Association shall be bonded in such sums as the Board of Directors may specify. The premium on such bonds shall be paid by the Association.

The Board of Directors may authorize the Association to pay expenses incurred by, or to satisfy a judgement or fine rendered or levied against a present or former member of the Association in an action brought against such person (whether or not the Association is joined as a party defendant) to impose a liability or penalty on such person for an act alleged to have been committed by him, whether a member of a committee or not, or by the Association, or by both; provided that the Board of Directors determines in good faith that such member was acting in good faith within what he reasonably believed to be in the best interests of the Association or its members. Payments authorized hereunder shall include amounts paid and expenses incurred in settling any such action or threatened action.
ARTICLE X
Committees

The Board of Directors may appoint any committees it deems necessary to properly carry on the business of the corporation and shall fix the number, terms of office and duties of their respective members; provided, however, that any such committee shall have a minimum of two (2) members. If an Executive Committee is appointed, the committee shall consist of the President, the immediate past President of the corporation, the Vice-President and the Treasurer. These committees are to be used to study certain facets of the total operation of the corporation and make recommendations to the Board of Directors for action. The Board of Directors shall appoint as members of such committees any person felt best qualified by the Board of Directors to serve on the specified committee. The Board of Directors shall designate one of the members of each such committee as its chairperson for such period of time as shall be established and revised, from time to time, by the Board of Directors. Any such committee may be discharged at any time by the Board of Directors from further consideration of any matter previously submitted to it for study.
ARTICLE XI
Indemnification

The corporation shall indemnify any and all of its directors, officers (including Executive Director), or former directors or officers, against expenses actually and necessarily incurred by them in connection with the defense of any action, suite or proceeding in which they, or any of them, are made parties, or a party, by reason of being or having been directors or officers, or a director or officer of the corporation, except in relation to matters as to which any such director or officer or former director or person shall be adjudged in such action, suit or proceeding to be liable for gross negligence or willful misconduct in the performance of duty. Such indemnification shall not be deemed exclusive of any other rights to which those indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under any Bylaw, agreement, vote of the membership, or otherwise.
ARTICLE XII
Execution of Instruments

Execution of Instruments: The President shall have power to execute on behalf and in the name of the corporation any deed, contract, bond, debenture, note or other obligations or evidences of indebtedness, or proxy, or other instrument requiring the signature of an officer of the corporation, except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. Unless so authorized, no officer, agent or employee shall have any power or authority to bind the corporation in any way, to pledge its credit, or to render it liable pecuniarily for any purpose or in any amount.

Checks and Endorsements: All checks and drafts upon the funds to the credit of the corporation in any of its depositories shall be signed by such of its officers or agents as shall from time to time be determined by resolution of the Board of Directors which may provide for the use of facsimile signatures under specified conditions, and all notes, bills receivable, trade acceptances, drafts and other evidences of indebtedness payable to the corporation shall, for the purpose of deposit, discount or collection, be endorsed by such officers or agents of the corporation in such manner as shall from time to time be determined by resolution of the Board of Directors.
ARTICLE XIII
Corporate Seal

The corporate seal shall be in such form as shall be approved by the resolution of the Board of Directors. Said seal may be used by causing it or a facsimile thereof to be impressed of affixed or reproduced or otherwise. The impression of the seal may be made and attested by either the Secretary or an Assistant Secretary for the authentication of contracts or other papers requiring the seal.
ARTICLE XIV
Corporate Books and Records

Except as otherwise required by statute, the books and records of the corporation may be kept within the State of Colorado at such place as may be from time to time designated by the Board of Directors.
ARTICLE XV
Emergency By-laws and Amendments

Emergency By-laws: The Board of Directors may adopt emergency By-laws, which shall, notwithstanding any different provisions elsewhere, be operative during any emergency resulting from attack on the United States or any nuclear or atomic disaster and which may make any provision that may be practical and necessary for the circumstances of the emergency.

Amendments: All By-laws of the corporation shall be subject to alteration, amendment or repeal, and new By-laws may be added by the affirmative vote of a majority of a quorum of the members of the Board of Directors at any regular or special meeting.
ARTICLE XVI
Dissolution

If the Association is dissolved, the Board of Directors shall have the power and authority to: collect all accounts, assets or funds belonging to the Association of its members as a result of the operations of the Association; pay debts and obligations of the Association and of its members resulting from the operations of the Association; sell, transfer, and convey any good will which may have accrued to the Association or its members resulting from the operation of the Association; any excess funds after completion of all obligations of the association shall be utilized for the furtherance of education and distributed to existing local agents associations, institutions or other foundations. The Association shall take all other steps and actions as may be deemed by the Board of Directors to be necessary to carry into full effect the foregoing provisions and for liquidating and determining the affairs of the Association.