Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately provide for changes in the operation of the Savings Bank Life Insurance Company of Massachusetts, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 11A of chapter 30A of the General Laws, as appearing in the 1992 Official Edition, is hereby amended by striking out, in line 21, the words "and the General Insurance Guaranty Fund" and inserting in place thereof the following words:- or the Policyholders Protective Board.

SECTION 2. Section 3 of chapter 178A of the General Laws, as so appearing, is hereby amended by adding the following paragraph:-

No director shall be personally liable to the company or its stockholders for monetary damages for breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except for liability; (1) for any breach of the director's duty of loyalty to the corporation and its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) incurred pursuant to the provisions of section sixty-one or sixty-two of chapter one hundred and fifty-six B or (4) for any transaction from which the director derived an improper personal benefit.

SECTION 3. Said chapter 178A is hereby further amended by striking out section 4, as so appearing, and inserting in place thereof the following section:-

Section 4. Within forty-five days after the establishment of the company, the directors shall submit to the commissioner a plan pursuant to which the company shall assume the ownership and operation of the insurance department of each savings and insurance bank. Said plan shall provide that all savings and insurance banks shall be issued shares of the capital stock of the company in such proportion as the surplus of the insurance department of each such bank calculated at the fair market value of its assets bears to the total surplus of the insurance departments of all such banks as of the date of conversion, or in such other manner deemed to be fair and equitable by the directors and approved by the commissioner; provided, however, that each such bank shall receive not less than one share of the capital stock of the company. Said plan shall further provide that there shall be two classes of such stock: (a) Class A shares which shall be voting shares, and (b) Class B shares which shall be nonvoting shares. The first share of stock issued to each such bank shall be Class A stock and all remaining shares so issued to any such bank shall be Class B stock. All shares of such stock shall be considered equal with respect to the payment of dividends, if any, in accordance with section ten.

The capital stock of the company shall be held only by a savings bank or its holding company; provided, however, that no such bank or holding company shall, collectively, hold more than one share of Class A stock; and provided, further, that upon any proposed sale of such stock by any such bank or holding company, the shares to be sold shall first be offered to the company for purchase upon the same terms and conditions as those of the proposed sale and the company is hereby authorized, with the approval of the commissioner, to purchase and hold such shares.

Notwithstanding the foregoing provisions of this section, any bank or bank holding company which acquires shares of stock of the company through a merger with or acquisition of a bank, to which any such shares were issued by the company pursuant to this section, its holding company or any successor to either said bank or holding company, may retain such shares; provided, however, that if any bank or bank holding company thereby acquires more than one share of said Class A stock, it shall offer the amount of such shares in excess of one to the company. The company is hereby authorized and directed to purchase the same at a price consistent with the value assigned to such stock pursuant to a current appraisal thereof performed by an investment banking firm registered with the Securities and Exchange Commission and retained by the company to make such appraisal; and provided, further, that any proposed sale of shares of stock so retained shall be effected in compliance with this section.

Notwithstanding the provisions of section one hundred and seventy-four E of chapter one hundred and seventy-five, a bank and its officers and employees may act as an agent or broker exclusively for the company in the sale of insurance contracts. No such bank or its officers and employees shall act as agent or broker for any other insurance company doing business in the commonwealth. All licenses for the sale of savings bank life insurance acquired in accordance with the provisions of section ten A of chapter one hundred and seventy-eight and in effect on the date of conversion are hereby transferred to the company and shall continue in force until the stated expiration date, at which time, they may be renewed by the company. Applicants for a license as an agent or broker for the company shall be filed in accordance with sections one hundred and sixty-three and one hundred and sixty-three A of said chapter one hundred and seventy-five; provided, however, that any such license shall not become effective until the date of conversion.

SECTION 4. Section 10 of said chapter 178A, as so appearing, is hereby amended by inserting after the third sentence the following sentence:- If the commissioner has failed to act within sixty days after receipt of the approval and findings of said board, the company may pay such dividends without further delay or action.

SECTION 5. Said chapter 178A is hereby further amended by adding the following section:-

Section 11. Any suit brought on or in respect to any insurance contract issued or assumed by the company shall be brought in the county where such contract was issued, and within two years following the date the alleged cause of action accrues.

SECTION 6. The provisions of section three of this act shall take effect as of September thirtieth, nineteen hundred and ninety-three.