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Fulmont Mutual Insurance Company

Company Governance Policy
Fulmont Mutual Insurance Company


In this atmosphere of corporate governance interest and scrutiny we are providing the policyholders of Fulmont Mutual Fire Insurance Company with a summary of our Company Governance policy.


Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, etc. A governance plan spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance.

Mutual boards owe duties to their company and member policyholders that are the same as the duties owed by directors of stock corporations to their companies and shareholders.

These duties are very important to the exercise of sound governance practice on the part of mutual company board members.

Articles, Bylaws and Charter:
New York State Insurance Law requires Insurance Companies to have certain organizing documents in order to do business- Articles of Incorporation, bylaws, and a charter.

Articles of Incorporation set out the basic framework and structure of the organization, identifying the bodies or entities that will provide governance, the offices that comprise the basic management of the organization, the provisions regarding membership or ownership, the provisions for required meetings, etc.

Bylaws are the “contract” of existence between the business entity and members of the organization. The additional detail in bylaws addresses the following subjects –the rights of members or owners, the basic roles or duties of the board and officer positions, the timing and notice of meetings, the method of board nominations and elections, the removal of directors, and board indemnity provisions.

Our Insurance Charter states what kinds of insurance business under the NYS Insurance Law we are allowed to write as well as our writing territory.

Please be assured that your Board of Directors understand that an important part of a mutual company’s governance practice is to review and maintain an effective set of articles and bylaws.

Board of Directors:
As a mutual insurance company we are governed by a Board of Directors elected by the policyholders. The role of the Board of Directors is to develop company goals and implement corporate strategy to deliver quality products while assuring the financial solvency of the company. In order to accomplish these objectives, the Board must maintain effective control of management and operations, accurately measure company performance, and constantly review the solvency of the company. Meaningful participation by all directors is required to ensure our success.

The Board of Directors and/or the Executive Committee have a minimum of four meetings a year – one of which must be a full Board of Directors meeting. The Executive Committee is vested with the powers of the Board of Directors during the intervals when the board is not in session – subject to the limitations as exist by law.

The Board of Directors consists of ten people some of whom have specialized experience in the Insurance Industry, various business background, and the legal profession.

Board Composition:
Directors of mutual insurance companies are typically classified as either “inside” or “outside” directors. Inside directors are employees who hold management positions in the company. Insiders bring a greater knowledge or awareness of company strengths and weaknesses to board discussions and decisions.

Outside directors are not employed by the company, and usually have no other financial relationship to the company other than, perhaps, as a policyholder.

Our Bylaws state that we will have at least two inside Directors. Currently the inside directors consist of the President, Secretary and the Treasurer.

There are currently 7 outside directors and 3 inside directors.

Qualifications of Directors
The board of directors typically includes some members who have experience in the insurance industry. The board also consists of members who do not have particular expertise in insurance matters, but whose experience and knowledge in other fields of business or professions are considered valuable. Regardless of the mix, the board will exercise a well-balanced approach to policy decisions. There are certain qualities and attributes which all board members must possess.

Collective Board Competencies
The board shall exhibit certain collective competencies, which are vital to its effective performance. Required skills include business leadership, strategic planning and business judgment. Directors shall also possess a good understanding of the insurance industry and the market the company serves, as well as general business economics, accounting and finance. Directors must be able to follow management trends and to immediately respond to unexpected crisis events with rational and reasoned solutions.

Periodic evaluations of performance of the board’s individual members are prudent and important to the welfare of the Company. Individual directors will be evaluated on their level of attendance, participation at board meetings, on their knowledge and understanding of the company’s vision and strategy, and on the quality of their performance.

Board Committees:
The advantages of a board committee structure are apparent – committees can apply more extensive experience and abilities or more focused attention to significant areas of company activity. Some of the factors that help to decide whether a board should establish a committee include The advantages of a board committee structure are apparent – committees can apply more extensive experience and abilities or more focused attention to significant areas of company activity.

Some of the factors that help to decide whether a board should establish a committee include

  • The specific skill or experience required to understand the activity or issue and to propose recommendations or make decisions.
  • The time commitment required to oversee the particular issue or activity.
  • The importance of the issue or activity that is the subject of the committee’s responsibilities.

The following are the committees that conform to the proper governance of our Insurance Company:

  • Executive
  • Audit
  • Compensation
  • Investment
  • Nominating and Governance
  • Trustees of Retirement

Committees meet once a year or on an as need basis. It should be noted that the entire Board of Directors serve on most of these committees.

Policyholder Relations

Mutual policyholders do have the power to elect board members. Each mutual policyholder receives a single vote regardless of the amount of insurance purchased.

Policyholder Status as “Owner”
From a governance standpoint, the most controversial label attached to the definition of a policyholder’s interest is that of owner. In actual legal fact, the ownership status of most mutual company policyholders has a very limited meaning. Generally, it means only governance/participation rights and includes no financial interest in the assets of the company.

Even though we commonly state that policyholders own a mutual insurer, the membership interest of a policyholder is not equivalent to ownership. In its most common sense, ownership usually implies a right of dominion and control over property, including the right to dispose of the property. In a mutual insurance company, policyholders, or members, do not have the ability to sell or otherwise transfer individual ownership. The ownership interest arises out of the policy of insurance and does not exist after the termination of the policy of insurance

Please direct any questions you have about our governance policy to: info@fulmontmutual.com

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For further information regarding our policies, send e-mail to
info@fulmontmutual.com, or write to us at:
Fulmont Mutual Insurance Company
P.O. Box 487, Johnstown, NY 12095-0487

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This web site was developed by Empire Web Pages on June 07, 1997.
This page was most recently updated on June 06, 2018.