UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1997
Commission File No. 2-57299
FARM FAMILY CASUALTY INSURANCE COMPANY
A New York Corporation IRS No. 14-1415410
344 Route 9W, Glenmont, New York 12077-2910
Registrant's telephone number: (518) 431-5000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No
The number of shares outstanding of the issuer's common stock as of November 13,
1997 is 2,253,878. All of the outstanding shares of the issuer's common stock
are held by Farm Family Holdings, Inc.
<PAGE>
FARM FAMILY CASUALTY INSURANCE COMPANY
INDEX
Part I. Financial Information
Item 1. Financial Statements of Farm Family Casualty Insurance
Company (unaudited)
Consolidated Balance Sheets -
September 30, 1997 and December 31, 1996
Consolidated Statements of Income Three months ended
September 30, 1997 and 1996 and nine months ended
September 30, 1997 and 1996
Consolidated Statements of Cash Flow Nine months ended
September 30, 1997 and 1996
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
FARM FAMILY CASUALTY INSURANCE COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
($ in thousands)
<CAPTION>
(Unaudited)
September 30, 1997 December 31, 1996
- ---------------------------------------------------------------------------------------------------------------
ASSETS
Investments:
<S> <C> <C>
Fixed Maturities
Available for sale, at fair value
(Amortized cost: $231,996 in 1997 and $206,841 in 1996 ) $240,304 $211,750
Held to maturity, at amortized cost
(Fair value: $9,456 in 1997 and $9,973 in 1996) 9,181 9,782
Equity securities
Available for sale, at fair value
(Cost: $3,149 in 1997 and $2,546 in 1996) 4,077 7,908
Mortgage loans 1,682 1,745
Other invested assets 620 748
Short-term investments 4,391 1,982
- ---------------------------------------------------------------------------------------------------------------
Total investments 260,255 233,915
- ---------------------------------------------------------------------------------------------------------------
Cash 3,678 4,108
Insurance receivables:
Reinsurance receivables 11,419 10,743
Premiums receivable, net 32,100 22,663
Deferred acquisition costs 12,746 10,682
Accrued investment income 4,730 4,709
Deferred income tax asset, net 2,896 1,531
Prepaid reinsurance premiums 2,216 1,944
Receivable from affiliates, net 16,714 16,489
Other assets 1,942 1,826
- ---------------------------------------------------------------------------------------------------------------
Total Assets $348,696 $308,610
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Reserves for losses and loss adjustment expenses $150,297 $141,220
Unearned premium reserve 68,529 55,945
Reinsurance premiums payable 2,914 641
Accrued expenses and other liabilities 11,085 9,081
Debt 1,277 1,304
- ---------------------------------------------------------------------------------------------------------------
Total liabilities 234,102 208,191
- ---------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Stockholder's equity:
Common stock $1.60 par value 3,200,000 shares authorized
and 2,253,878 shares issued and outstanding 3,606 3,606
Additional paid in capital 84,125 84,125
Retained earnings 20,861 6,012
Net unrealized investment gains 6,002 6,676
- ---------------------------------------------------------------------------------------------------------------
Total stockholder's equity 114,594 100,419
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity $348,696 $308,610
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FARM FAMILY CASUALTY INSURANCE COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands)
<CAPTION>
(Unaudited) (Unaudited)
For the three For the nine
Months ended Months ended
September 30, September 30,
1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------
Revenues:
<S> <C> <C> <C> <C>
Premiums $38,457 $33,015 $109,191 $96,881
Net investment income 4,452 3,989 13,067 11,492
Realized investment gains (losses), net 188 (102) 5,649 (25)
Other income 262 219 720 689
- -------------------------------------------------------------------------------------------------------------
Total revenues 43,359 37,121 128,627 109,037
- -------------------------------------------------------------------------------------------------------------
Losses and Expenses:
Losses and loss adjustment expenses 26,701 23,089 76,421 71,842
Underwriting expenses 10,196 9,075 29,789 27,042
Interest expense 25 33 77 141
Dividends to policyholders 65 43 177 156
- -------------------------------------------------------------------------------------------------------------
Total losses and expenses 36,987 32,240 106,464 99,181
- -------------------------------------------------------------------------------------------------------------
Income before federal income tax expense and extraordinary item 6,372 4,881 22,163 9,856
Federal income tax expense 1,961 1,495 7,313 3,114
- -------------------------------------------------------------------------------------------------------------
Income before extraordinary item 4,411 3,386 14,850 6,742
Extraordinary item - demutualization expenses - 126 - 1,543
- -------------------------------------------------------------------------------------------------------------
Net income $4,411 $3,260 $14,850 $5,199
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FARM FAMILY CASUALTY INSURANCE COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
<CAPTION>
For the Nine Months
Ended September 30,
1997 1996
- -----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $14,850 $5,199
- -----------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net income
to net cash provided by operating activities:
Realized investment gains (5,649) 25
Amortization of bond discount 270 99
Deferred income taxes (995) (313)
Extraordinary item - demutualization expenses - 1,543
Changes in:
Reinsurance receivables (676) 3,459
Premiums receivable (9,437) (3,643)
Deferred acquisition costs (2,064) (772)
Accrued investment income (21) 99
Prepaid reinsurance premiums (272) (243)
Receivable from affiliates (225) 569
Other assets (117) 159
Reserves for losses and loss adjustment expenses 9,077 112
Unearned premium reserve 12,584 5,652
Reinsurance premiums payable 2,273 (1,660)
Accrued expenses and other liabilities 1,997 164
- -----------------------------------------------------------------------------------------------------------------
Total adjustments 6,745 5,250
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities before extraordinary item 21,595 10,449
Extraordinary item - demutualization expenses - (1,543)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 21,595 8,906
- -----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales:
Fixed maturities available for sale 3,514 5,450
Other invested assets (169) 144
Equity securities 6,257 -
Investment collections:
Fixed maturities available for sale 13,542 7,238
Fixed maturities held to maturity 582 2,289
Mortgage loans 63 57
Investment purchases:
Fixed maturities available for sale (42,425) (36,924)
Fixed maturities held to maturity - (1,903)
Equity securities (1,081) -
Change in short-term investments, net (2,409) (2,531)
Change in other invested assets 128 259
- -----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (21,998) (25,921)
- -----------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIEs
Capital contribution - 18,565
Principal payments on debt (27) (26)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities (27) 18,539
- -----------------------------------------------------------------------------------------------------------------
Net increase in cash (430) 1,524
Cash, beginning of period 4,108 2,410
- -----------------------------------------------------------------------------------------------------------------
Cash, end of period $3,678 $3,934
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
The accompanying consolidated financial statements include the accounts of
Farm Family Casualty Insurance Company (the "Company"). On July 26, 1996,
Farm Family Mutual Insurance Company converted from a mutual property and
casualty insurance company to a stockholder owned property and casualty
insurance company and became a wholly owned subsidiary of Farm Family
Holdings, Inc. pursuant to a Plan of Reorganization and Conversion. In
addition, Farm Family Mutual Insurance Company was renamed Farm Family
Casualty Insurance Company.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q. In the opinion
of management, these statements contain all adjustments including normal
recurring accruals, which are necessary for a fair presentation of the
consolidated financial position at September 30, 1997, and the consolidated
results of operations for the nine months ended September 30, 1997 and
1996. The results of the Company's operations for any interim period are
not necessarily indicative of the results of the Company's operations for a
full fiscal year.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
General
The following discussion includes the operations of Farm Family Casualty
Insurance Company (herein referred to as "Farm Family Casualty" or the
"Company"). The operations of the Company are also closely related with those of
its affiliates, Farm Family Life Insurance Company ("Farm Family Life") and Farm
Family Life's wholly owned subsidiary, United Farm Family Insurance Company
("United Farm Family"). On July 26, 1996, the Company became a wholly owned
subsidiary of Farm Family Holdings, Inc. pursuant to a Plan of Reorganization
and Conversion.
The Company is a specialized property and casualty insurer of farms, other
generally related businesses and residents of rural and suburban communities
primarily in the Northeastern United States. The Company provides property and
casualty insurance coverages to members of the state Farm Bureau(R)
organizations in New York, New Jersey, Delaware, West Virginia and all of the
New England states. Membership in a state Farm Bureau organization is a
prerequisite for voluntary insurance coverage (except for employees of the
Company and its affiliates).
The Company's operating results are subject to significant fluctuations from
period to period depending upon, among other factors, the frequency and severity
of losses from weather related and other catastrophic events, the effect of
competition and regulation on the pricing of products, changes in interest
rates, general economic conditions, tax laws and the regulatory environment. As
a condition of its license to do business in various states, the Company is
required to participate in a variety of mandatory residual market mechanisms
(including mandatory pools) which provide certain insurance (most notably
automobile insurance) to consumers who are otherwise unable to obtain such
coverages from private insurers. In all such states, residual market premium
rates are subject to the approval of the state insurance department and have
generally been inadequate. The amount of future losses or assessments from
residual market mechanisms cannot be predicted with certainty and could have a
material adverse effect on the Company's results of operations.
For the nine month periods ended September 30, 1997 and 1996, 36.6% and 38.7%,
respectively, of the Company's direct written premiums were derived from
policies written in New York and, for the same periods, 25.7% and 22.4%,
respectively, were derived from policies written in New Jersey. For these same
periods, no other state accounted for more than 10.0% of the Company's direct
written premiums. As a result, the Company's results of operations may be
significantly affected by weather conditions, catastrophic events and regulatory
developments in these two states and in the Northeastern United States
generally.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995
Certain statements made herein or elsewhere by or on behalf of the Company that
are not historical facts are intended to be forward-looking statements within
the meaning of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Examples of forward-looking statements include, but are not
limited to: (i) projections of revenue, earnings, capital structure and other
financial items, (ii) statements of the plans and objectives of the Company or
its management, (iii) statements of future economic performance and (iv)
assumptions underlying statements regarding the Company or its business. Readers
are hereby cautioned that certain events or circumstances could cause actual
results to differ materially from those estimated, projected, or predicted. Such
risks and uncertainties include, but are not limited to, the following: exposure
to catastrophic loss, geographic concentration of loss exposure, general
economic conditions and conditions specific to the property and casualty
insurance industry including its cyclical nature, regulatory changes and
conditions, rating agency policies and practices, competitive factors, claims
development and the impact thereof on loss reserves and the Company's reserving
policy, the adequacy of the Company's reinsurance programs, developments in the
securities markets and the impact on the Company's investment portfolio and
other risks included in this Report on Form 10-Q and other risk factors listed
from time to time in the Company's Securities and Exchange Commission Filings.
In addition, forward-looking statements are based on management's knowledge and
judgment as of the date that such statements are made. The Company undertakes no
obligation to publicly release the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
Results of Operations
The Three Months Ended September 30, 1997 Compared to the Three Months Ended
September 30, 1996
Premiums
- --------
Premium revenue increased $5.5 million or 16.5%, during the three months ended
September 30, 1997 to $38.5 million from $33.0 million for the same period in
1996. The increase in premium revenue in 1997 resulted from an increase of $5.0
million in earned premiums on additional business directly written by the
Company, as well as an increase of $1.7 million in earned premiums assumed which
was offset by an increase of $1.2 million in earned premiums ceded to reinsurers
and not retained by the Company. The $5.0 million increase in earned premiums on
additional business directly written by the Company was primarily attributable
to an increase of $4.3 million, or 14.0%, in earned premiums from the Company's
primary products (personal and commercial automobile products other than
assigned risk automobile business, the Special Farm Package, businessowners
products, homeowners products, and Special Home Package).
Net written premiums increased 25.5% to $41.8 million for the three months ended
September 30, 1997 compared to $33.3 million for the same period in 1996. The
increase in net written premiums is primarily attributable to the growth in
direct writings to customers of $6.3 million and, to a lesser extent, an
increase in the Company's voluntary assumed reinsurance business.
Geographically, the increase in the Company's direct writings came from New
Jersey, New York, Massachusetts, West Virginia, Connecticut, Delaware, Rhode
Island, Maine and Vermont. Direct writings for the third quarter of 1997
increased primarily as a result of an increase in writings of all of the
Company's primary products and to a lesser extent as a result of an increase of
$0.5 million in involuntary assigned risk automobile business in New Jersey and
the Company's re-entry into the Massachusetts workers' compensation market which
added an additional $0.5 million. During the three months ended September 30,
1997, the written premium from New Jersey assigned risk automobile business
totaled $0.5 million.
Net Investment Income
- ---------------------
Net investment income increased $0.5 million or 11.6% to $4.5 million for the
three months ended September 30, 1997 from $4.0 million for the same period in
1996. The increase in net investment income was primarily the result of an
increase in average cash and invested assets (at amortized cost) of
approximately $38.6 million, or 18.2% for the three months ended September 30,
1997 compared to the same period in 1996. The increase in average cash and
invested assets was primarily attributable to available cash flow from
operations. The return realized on the Company's cash and investments was 7.1%
for the three months ended September 30, 1997 and 7.5% for the same period in
1996. The decrease in the return realized on the Company's cash and invested
assets was primarily attributable to an increase in investments in tax exempt
securities. In addition, the return on the Company's cash and investments
decreased during the three months ended September 30, 1997 compared to the same
period in 1996 as a result of the Company's investment in fixed maturities with
a slightly lower rate of return due to a reduction in interest rates.
Losses and Loss Adjustment Expenses
- -----------------------------------
Losses and loss adjustment expenses increased $3.6 million, or 15.6%, to $26.7
million for the three months ended September 30, 1997 from $23.1 million for the
same period in 1996. Loss and loss adjustment expenses were 69.4% of premium
revenue for the three months ended September 30, 1997 compared to 69.9% of
premium revenue for the same period in 1996. The decrease in loss and loss
adjustment expenses as a percent of premium revenue was primarily attributable
to a greater relative increase in earned premiums than in loss and loss
adjustment expenses. Losses believed to be weather related aggregated $1.2
million in the three months ended September 30, 1997 compared to $0.7 million
for the same period in 1996.
Underwriting Expenses
- ---------------------
Underwriting expenses increased $1.1 million, or 12.4%, to $10.2 million for the
three months ended September 30, 1997 from $9.1 million for the same period in
1996. For the three months ended September 30, 1997 underwriting expenses were
26.5% of premium revenue compared to 27.5% for the same period in 1996. The
reduction in the underwriting expense ratio was primarily attributable to a
smaller relative increase in overhead expenses than in premium revenue for the
period.
Federal Income Tax Expense
- --------------------------
Federal income tax expense increased $0.5 million to $2.0 million in 1997 from
$1.5 million in 1996. Federal income tax expense was 30.8% of income before
federal income tax expense and extraordinary item for the three months ended
September 30, 1997 compared to 30.6% for the same period in 1996.
Net Income
- ----------
Net income increased $1.1 million to $4.4 million for the three months ended
September 30, 1997 from $3.3 million for the same period in 1996 primarily as a
result of the foregoing factors.
The Nine Months Ended September 30, 1997 Compared to the Nine Months Ended
September 30, 1996
Premiums
- --------
Premium revenue increased $12.3 million or 12.7%, during the nine months ended
September 30, 1997 to $109.2 million from $96.9 million for the same period in
1996. The increase in premium revenue in 1997 resulted from an increase of $12.5
million in earned premiums on additional business directly written by the
Company, and an increase of $2.5 million in earned premiums assumed which was
offset by an increase of $2.7 million in earned premiums ceded to reinsurers and
not retained by the Company. The $12.5 million increase in earned premiums on
additional business directly written by the Company was primarily attributable
to an increase of $11.2 million, or 12.9%, in earned premiums from the Company's
primary products (personal and commercial automobile products other than
assigned risk business, the Special Farm Package, businessowners products,
homeowners products, and Special Home Package) The number of policies in force
related to the Company's primary products increased by 11.4% to approximately
124,100 as of September 30, 1997 from approximately 111,400 as of September 30,
1996 and the average premium earned for each such policy increased by 1.3%
during the nine months ended September 30, 1997 compared to the same period in
1996.
Net written premiums increased 18.8% to $121.5 million for the nine months ended
September 30, 1997 compared to $102.3 million for the same period in 1996. The
increase in net written premiums is primarily attributable to the growth in
direct writings to customers of $16.1 million and, to a lesser extent, an
increase in the Company's voluntary assumed reinsurance business.
Geographically, the increase in the Company's direct writings come from New
Jersey, New York, Massachusetts, Connecticut, West Virginia, Delaware, Rhode
Island and Vermont. In addition, direct writings of all the Company's primary
products, particularly personal automobile, increased during the first nine
months of 1997. During the nine months ended September 30, 1997, the Company
wrote approximately $1.4 million of assigned risk automobile business in New
Jersey and $1.4 million in workers compensation business in Massachusetts.
Net Investment Income
- ---------------------
Net investment income increased $1.6 million or 13.7% to $13.1 million for the
nine months ended September 30, 1997 from $11.5 million for the same period in
1996. The increase in net investment income was primarily the result of an
increase in average cash and invested assets (at amortized cost) of
approximately $30. million, or 14.3% for the nine months ended September 30,
1997 compared to the same period in 1996. The increase in average cash and
invested assets was primarily attributable to available cash flow from
operations. The return realized on the Company's cash and investments was 7.3%
for the nine months ended September 30, 1997 and September 30, 1996.
Losses and Loss Adjustment Expenses
- -----------------------------------
Losses and loss adjustment expenses increased $4.6 million, or 6.4%, to $76.4
million for the nine months ended September 30, 1997 from $71.8 million for the
same period in 1996. Loss and loss adjustment expenses were 70.0% of premium
revenue for the nine months ended September 30, 1997 compared to 74.2% of
premium revenue for the same period in 1996. The decrease in loss and loss
adjustment expenses as a percent of premium revenue was primarily attributable
to the reduction in weather related losses. Losses believed to be weather
related aggregated $4.4 million in the nine months ended September 30, 1997
compared to $9.4 million for the same period in 1996.
Underwriting Expenses
- ---------------------
Underwriting expenses increased $2.7 million, or 10.2%, to $29.8 million for the
nine months ended September 30, 1997 from $27.0 million for the same period in
1996. For the nine months ended September 30, 1997, underwriting expenses were
27.3% of premium revenue compared to 27.9% for the same period in 1996.
Federal Income Tax Expense
- --------------------------
Federal income tax expense increased $4.2 million to $7.3 million in 1997 from
$3.1 million in 1996. Federal income tax expense was 33.0% of income before
federal income tax expense and extraordinary item for the nine months ended
September 30, 1997 compared to 31.6% for the same period in 1996.
<PAGE>
Realized Investment Gains
- -------------------------
Realized investment gains increased to $5.6 million for the nine months ended
September 30, 1997. The increase in realized investment gains was primarily
attributable to the sale of a common stock investment.
Net Income
- ----------
Net income increased $9.7 million to $14.9 million for the nine months ended
September 30, 1997 from $5.2 million for the same period in 1996 primarily as a
result of the foregoing factors and the impact of $1.5 million of expenses in
the first quarter of 1996 related to the demutualization of Farm Family Casualty
which the Company has identified as an extraordinary item.
Liquidity and Capital Resources
- -------------------------------
Net cash provided by operating activities was $21.6 million and $8.9 million
during the nine month periods ended September 30, 1997 and 1996, respectively.
The increase in net cash provided by operating activities during the nine months
ended September 30, 1997 was primarily attributable to the increase in net
income and a decrease in payments for losses and loss adjustment expenses.
The Company has in place unsecured lines of credit with certain banks under
which it may borrow up to $12.0 million. At September 30, 1997, no amounts were
outstanding on these lines of credit, which have annual interest rates equal to
the bank's prime rate. In addition, at September 30, 1997, the Company had $1.3
million principal amount of surplus notes outstanding. The surplus notes bear
interest at the rate of eight percent per annum and have no maturity date. The
principal and interest on the surplus notes are repayable only with the approval
of the Superintendent of Insurance of New York State.
<PAGE>
Item 6: Exhibits and Reports on Form 8-K
<TABLE>
EXHIBIT INDEX
FARM FAMILY CASUALTY INSURANCE COMPANY FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
Exhibit Number Document Description
<S> <C>
*2.1 Plan of Reorganization and Conversion dated February 14, 1996 as amended by
Amendment No. 1, dated April 23, 1996
3.1 Restated Charter of Farm Family Casualty Insurance Company
3.2 Bylaws of Farm Family Casualty Insurance Company as amended
and restated on July 26, 1996 and as amended up to and
including February 13, 1997
10.12 Farm Family Life Insurance Company, Farm Family Casualty Insurance Company,
Farm Family Holdings, Inc. Officer Severance Pay Plan effective July 29, 1997
(Incorporated by reference to Farm Family Holdings, Inc. Form 10-Q for the
quarter ended September 30, 1997
*Incorporated by reference to Registration Statement No. 333-4446
</TABLE>
Reports on Form 8-K
There were no reports on form 8-K filed during the period
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FARM FAMILY CASUALTY INSURANCE COMPANY
(Registrant)
November 13, 1997 By: /s/ Philip P. Weber
- ------------------------ ----------------------------------------------------
(Date) Philip P. Weber, President & Chief Executive Officer
(Principal Executive Officer)
November 13, 1997 By: /s/ Timothy A. Walsh
- ------------------------ ----------------------------------------------------
(Date) Timothy A. Walsh, Executive Vice President
- Finance & Treasurer
(Principal Financial & Accounting Officer)
<PAGE>
Exhibit 3.1
RESTATED CHARTER
of
FARM FAMILY CASUALTY INSURANCE COMPANY
Under Section 7307 of the New York Insurance Law
and Section 807 of the Business Corporation Law
The undersigned, being President and Secretary of Farm Family
Mutual Insurance Company, respectively, hereby certify:
1. The name of the corporation is Farm Family Mutual Insurance Company.
2. The Declaration and Charter of the corporation was filed in the Office
of the Superintendent of Insurance of the State of New York on April 21, 1955.
3. The Charter of the corporation is hereby amended, as authorized by
Section 7307 of the Insurance Law of the State of New York (the "Insurance Law")
and Section 807 of the Business Corporation Law of the State of New York, in
connection with the reorganization of the corporation from a mutual
property/casualty insurance company to a stock property/casualty insurance
company pursuant to Section 7307 of the Insurance Law, generally, to (a) change
references in the Charter from "mutual" to "stock" and from "policyholder" to
"shareholder"; (b) rename the corporation "Farm Family Casualty Insurance
Company"; (c) add paragraphs 3, 16, 17, 22, 24, 26 and 30 of Section 1113 of the
Insurance Law to Article 3 as additional kinds of insurance that may be written
by the corporation; (d) modify paragraphs 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14,
15, 19, 20 and 21 of Article 3 to reflect changes effected in Section 1113 of
the Insurance Law; (e) modify the authority of the corporation to issue
participating policies or contracts of insurance to provide that the corporation
may issue such policies or contracts but is not required to issue only policies
or contracts of insurance that have the right to participate in the profits of
the corporation; (f) delete from Article 3 the requirement that only
non-assessable policies shall be issued by the corporation; (g) delete from
Article 3 the right of policyholders and members to vote at members' meetings;
(h) renumber Article 4 as Article 5 and, with respect to such Article, delete
both the restriction on the minimum number of directors that must be principal
officers of the corporation and the restriction on the maximum number of
directors that may be officers or salaried employees of the corporation; (i)
renumber Article 5 as Article 6 and, with respect to such Article, delete the
membership requirement for directors, add a provision that the exact number of
directors shall be determined from time to time by the affirmative vote of the
directors, create three classes of directors with each class serving staggered
three-year terms and add language with respect to the method of filling
vacancies on the board of directors; (j) renumber Article 6 as Article 7 and,
with respect to such Article, change the specific date of the annual meeting
from the first Thursday of March to the third Tuesday of April of each year,
delete the provision regarding the method of filling vacancies which provision
has been modified and added to Article 6, modify the requirement that a majority
of directors be citizens and residents of the State of New York or of adjoining
states to require that a majority of the directors be citizens and residents of
the United States and add the requirement that each director be at least
eighteen (18) years of age; (k) add Article 8 which establishes authorized
capital of the corporation in the amount of $5,120,000, authorizes 3,200,000
shares of Common Stock, par value $1.60 per share, as the shares of the
corporation and provides that no additional shares shall be issued by the
corporation without the prior written consent of the Superintendent of Insurance
of the State of New York; (l) delete Articles 7 and 11 which listed the initial
directors and incorporators of the Corporation; and (m) renumber Articles 8, 9
and 10 as Articles 9, 10 and 11, respectively.
4. The text of the Charter, as amended by the filing of this Restated
Charter, is hereby restated to read in full as follows:
Article 1
The name of this corporation shall be "FARM FAMILY CASUALTY INSURANCE
COMPANY".
Article 2
The principal office of this corporation shall be located in the Town of
Bethlehem, County of Albany, State of New York.
Article 3
The kinds of insurance to be transacted by this corporation shall be those
specified in Paragraphs "3", "4", "5", "6", "7", "8", "9", "10", "11", "12",
"13", "14", "15", "16", "17", "19", "20", "21", "22", "24", "26" and "30" of
Section 1113 of the Insurance Law, as follows: 3. "Accident and health
insurance," means (i) insurance against death or personal injury by accident or
by any specified kind or kinds of accident and insurance against sickness,
ailment or bodily injury, including insurance providing disability benefits
pursuant to article nine of the workers' compensation law, except as specified
in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or bodily injury
(but excluding insurance solely against accidental injury) under any contract
which does not give the insurer the option to cancel or otherwise terminate the
contract at or after one year from its effective date or renewal date.
4. "Fire insurance," means insurance against loss of or damage to any
property resulting from fire, including loss or damage incident to the
extinguishment of a fire or to the salvaging of property in connection
therewith.
5. "Miscellaneous property insurance," means loss of or damage to property
resulting from:
(a) lightning, smoke or smudge, windstorm, tornado, cyclone, earthquake,
volcanic eruption, rain, hail, frost and freeze, weather or climatic
conditions, excess or deficiency of moisture, flood, the rising of the
waters of the ocean or its tributaries;
(b) insects, or blights, or disease of such property except animals;
(c) electrical disturbance, causing or concomitant with a fire or an
explosion in public service or public utility property;
(d) bombardment, invasion, insurrection, riot, civil war or commotion,
military or usurped power, any order of a civil authority made to prevent
the spread of a conflagration, epidemic or catastrophe, vandalism or
malicious mischief, strike or lockout, collapse from any cause, or
explosion; but excluding any kind of insurance specified in paragraph nine
hereof, except insurance against loss of or damage to property resulting
from:
(1) explosion of pressure vessels (except steam boilers of more than
fifteen pounds pressure) in buildings designed and used solely for
residential purposes by not more than four families,
(2) explosion of any kind originating outside of the insured building
or outside of the building containing the property insured,
(3) explosion of pressure vessels which do not contain steam or which
are not operated with steam coils or steam jackets, or
(4) electrical disturbance causing or concomitant with an explosion in
public service or public utility property; or
(e) lateral or vertical subsidence of the earth caused by past or
present mining operations.
6. "Water damage insurance," means insurance against loss or damage by
water or other fluid or substance to any property resulting from the breakage or
leakage of sprinklers, pumps or other apparatus erected for extinguishing fires
or of water pipes or other conduits or containers, or resulting from casual
water entering through leaks or openings in buildings or by seepage through
building walls, but excluding loss or damage resulting from flood or the rising
of the waters of the ocean or its tributaries; and including insurance against
accidental injury of such sprinklers, pumps, fire apparatus, conduits or
containers.
7. "Burglary and theft insurance," means:
(a) Insurance against loss of or damage to any property resulting from
burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious
mischief, confiscation or wrongful conversion, disposal or concealment by
any person, or from any attempt thereof;
(b) Insurance against loss of or damage to moneys, coins, bullion,
securities, notes, drafts, acceptances or any other valuable papers or
documents, resulting from any cause, except while in the custody or
possession of and being transported by any carrier for hire or in the mail;
and
(c) Insurance of individuals by means of an all-risk type of policy
commonly known as the "Personal Property Floater" against any kind and all
kinds of loss of or damage to, or loss of use of, any personal property
other than merchandise.
8. "Glass insurance," means insurance against loss of or damage to glass
and its appurtenances resulting from any cause.
9. "Boiler and machinery insurance," means insurance against loss of or
damage to any property of the insured, resulting from explosion of or injury to:
(a) any boiler, heater or other fired pressure vessel;
(b) any unfired pressure vessel;
(c) pipes or containers connected with any such boilers or vessels;
(d) any engine, turbine, compressor, pump or wheel;
(e) any apparatus generating, transmitting or using electricity; or
(f) any other machinery or apparatus connected with or operated by any such
boilers, vessels or machines; and including the incidental power to make
inspections of, and issue certificates of inspection upon, any such
boilers, apparatus, and machinery, whether insured or otherwise.
10. "Elevator insurance," means insurance against loss of or damage to any
property of the insured, resulting from ownership, maintenance or use of
elevators, except loss or damage by fire.
11. "Animal insurance," means insurance against loss of or damage to any
domesticated or wild animal resulting from any cause.
12. "Collision insurance," means insurance against loss of or damage to any
property of the insured resulting from collision of any other object with such
property, but excluding collision to or by elevators, or to or by vessels,
craft, piers or other instrumentalities of ocean or inland navigation.
13. "Personal injury liability insurance," means insurance against legal
liability of the insured, and against loss, damage or expense incident to a
claim of such liability (including the insurer's obligation to pay medical,
hospital, surgical and disability benefits to injured persons, and funeral and
death benefits to dependents, beneficiaries or personal representatives of
persons who are killed, irrespective of legal liability of the insured), arising
out of death or injury of any person, or arising out of injury to the economic
interests of any person, as the result of negligence in rendering expert,
fiduciary or professional service, but excluding any kind of insurance specified
in paragraph fifteen except insurance to protect an insured against liability
for indemnification or contribution to a third party held responsible for injury
to the insured's employee arising out of and in the course of employment when
such insurance is written pursuant to this paragraph and not written pursuant to
paragraph fifteen.
14. "Property damage liability insurance," means insurance against legal
liability of the insured, and against loss, damage or expense incident to a
claim of such liability, arising out of the loss or destruction of, or damage
to, the property of any other person, but not including any kind of insurance
specified in paragraph thirteen or fifteen hereof.
15. "Workers' compensation and employers' liability insurance," means
insurance against the legal liability, under common law or statute or assumed by
contract, of any employer for the death or disablement of, or injury to, his
employee, including volunteer firefighters' benefit insurance provided pursuant
to the volunteer firefighters' benefit law and including volunteer ambulance
workers' benefit insurance provided pursuant to the volunteer ambulance workers'
benefit law.
16. "Fidelity and surety insurance," means:
(a) Guaranteeing the fidelity of persons holding positions of public or
private trust; and indemnifying banks, thrifts, brokers and other financial
institutions against loss of money, securities, negotiable instruments,
other specified valuable papers and tangible items of personal property
caused by larceny, misplacement, destruction or other stated perils
including loss while being transported in an armored motor vehicle or by
messenger; and insurance for loss caused by the forgery of signatures on,
or alteration of, specified documents and valuable papers;
(b) Insurance against losses that financial institutions become legally
obligated to pay by reason of loss of customers' property from safe deposit
boxes;
(c) Any contract bond; including a bid, payment or maintenance bond or a
performance bond where the bond is guaranteeing the execution of any
contract other than a contract of indebtedness or other monetary
obligation;
(d) An indemnity bond for the benefit of a public body, railroad or
charitable organization; a lost security or utility payment bond;
(e) Becoming surety on, or guaranteeing the performance of, any lawful
contract, not specifically provided for in this paragraph, except (i)
mortgage guaranty insurance, which may only be written by an insurer
authorized to write such insurance pursuant to Article 65 of the Insurance
Law, (ii) a contract that falls within the definition of financial guaranty
insurance as set forth in paragraph one of subsection (a) of section six
thousand nine hundred one of the Insurance Law, or (iii) any insurance
contract unless such guaranty is authorized pursuant to subsection (c) of
section one thousand one hundred fourteen of Article 11 of the Insurance
Law; and
(f) Becoming surety on, or guaranteeing the performance of, bonds and
undertakings required or permitted in all judicial proceedings or otherwise
by law allowed, including surety bonds accepted by states and municipal
authorities in lieu of deposits as security for the performance of
insurance contracts. Under this paragraph "fidelity" insurance shall have
the meaning set forth in subparagraphs (a) and (b) of this paragraph.
17. "Credit insurance," means:
(a) Indemnifying merchants or other persons extending credit against loss
or damage resulting from non-payment of debts owed to them, for goods and
services provided in the normal course of their business, including the
incidental power to acquire and dispose of debts so insured, and to collect
any debts owed to such insurer or to the insured, but no insurance may be
written as credit insurance if it falls within the definition of financial
guaranty insurance as set forth in paragraph one of subsection (a) of
section six thousand nine hundred one of the Insurance Law;
(b) Indemnifying any person for expenses disbursed or to be disbursed under
a contract in connection with the cancellation of a catered affair;
(c) Indemnifying any person for tuition expenses disbursed or to be
disbursed under a contract in connection with his dismissal or withdrawal
from an educational institution; or indemnifying elementary or secondary
schools, whether public, private, profit or non-profit, providing education
in consideration of a tuition charge or fee against loss or damage in the
event of non-payment of the tuition charges or fees of a student or pupil
dismissed, withdrawn or leaving before the end of the school year for which
the insurance is written. An educational institution may not require any
person responsible for the payment of a student's or pupil's tuition charge
or fee to pay for tuition refund insurance; or
(d) Indemnifying an adoptive parent for verifiable expenses not prohibited
under the law paid to or on behalf of the birth mother when either one or
both of the birth parents of the child withdraw or withhold their consent
to adoption. Such expenses may include maternity-connected medical or
hospital expenses of the birth mother, necessary living expense of the
birth mother preceding and during confinement, travel expenses of the birth
mother to arrange for the adoption of the child, legal fees of the birth
mother, and any other expenses which an adoptive parent may lawfully pay to
or on behalf of the birth mother. For the purposes of this section
"adoptive parent" means the parent or his or her spouse seeking to adopt a
child, "birth mother" means the biological mother of the child, "birth
parent" means the biological mother or biological father of the child.
19. "Motor vehicle and aircraft physical damage insurance," means insurance
against loss of or damage to motor vehicles or aircraft and their equipment
resulting from any cause; and insurance reimbursing a driver for costs including
replacement car rental, commercial transportation and accommodations resulting
from an automobile accident or mechanical breakdown occurring fifty miles or
more from the driver's principal place of residence or garaging.
20. "Marine and inland marine insurance," means insurance against any and
all kinds of loss of or damage to:
(a) Vessels, hulls, craft, aircraft, cars, automobiles, trailers and
vehicles of every kind, and all goods, freights, cargoes, merchandise,
effects, disbursements, profits, moneys, bullion, precious stones,
securities, choses in action, evidences of debt, valuable papers, bottomry
and respondentia interests and all other kinds of property and interests
therein, in respect to, appertaining to or in connection with any and all
risks or perils of navigation, transit, or transportation, including war
risks, on or under any seas or other waters, on land or in the air, or
while being assembled, packed, crated, baled, compressed or similarly
prepared for shipment or while awaiting the same or during any delays,
storage, transshipment, or reshipment incident thereto, including marine
builder's risks and all personal property floater risks;
(b) Person or property in connection with or appertaining to marine, inland
marine, transit or transportation insurance, including liability for loss
of or damage to either, arising out of or in connection with the
construction, repair, operation, maintenance or use of the subject matter
of such insurance (but not including life insurance or surety bonds nor
insurance against loss by reason of bodily injury to the person arising out
of the ownership, maintenance or use of automobiles);
(c) Precious stones, jewels, jewelry, gold, silver and other precious
metals, whether used in business or trade or otherwise and whether the same
be in course of transportation or otherwise; and
(d) Bridges, tunnels and other instrumentalities of transportation and
communication (excluding buildings, their improvements and betterments,
furniture and furnishings, fixed contents and supplies held in storage),
including auxiliary facilities and equipment attendant thereto; piers,
wharves, docks and slips; other aids to navigation and transportation,
including dry docks and marine railways. In this paragraph "inland marine"
insurance shall not include insurance of vessels, crafts, their cargoes,
marine builders' risks, or other similar risks, commonly insured only under
ocean marine insurance policies.
21. "Marine protection and indemnity insurance," means insurance against,
or against legal liability of the insured for, loss, damage or expense arising
out of, or incident to, the ownership, operation, chartering, maintenance, use,
repair or construction of any vessel, craft or instrumentality in use in ocean
or inland waterways, including liability of the insured for personal injury,
illness or death or for loss of or damage to the property of another person.
22. "Residual value insurance" means insurance issued in connection with a
lease or contract which sets forth a specific termination value at the end of
the term of the lease or contract for the property covered by such lease or
contract, and which insures against loss of economic value of tangible personal
property or real property or improvements thereto except loss due to physical
damage to property, excluding any lease or contract that falls within the
definition of financial guaranty insurance as set forth in paragraph one of
subsection (a) of section six thousand nine hundred one of the Insurance Law.
24. "Credit unemployment insurance" means insurance on a debtor in
connection with a specified loan or other credit transaction within the state to
provide payments to a creditor in the event of unemployment of the debtor for
the installments or other periodic payments becoming due while a debtor is
unemployed.
26. "Gap insurance" means insurance covering the gap amount which is
payable upon the total loss of personal property, which is the subject of a
lease or loan or other credit transaction occasioned by its theft or physical
damage. The kinds of gap insurance are:
(a) "Motor vehicle lessor/creditor gap insurance" which insures the lessor,
creditor, or the lessor's or creditor's assignee, under a motor vehicle
lease or loan or other credit transaction pursuant to which the lessor,
creditor, or, in the absence of a waiver by the lessor or creditor, the
assignee has waived the obligation of the lessee or debtor for the gap
amount;
(b) "Motor vehicle lessee/debtor gap insurance" which insures the lessee or
debtor under a motor vehicle lease or loan or other credit transaction
pursuant to which the lessor, creditor, or the lessor's or creditor's
assignee has not waived the obligation of the lessee or debtor for the gap
amount;
(c) "Non-motor vehicle lessor/creditor gap insurance" which insures the
lessor, creditor, or the lessor's or creditor's assignee, under a lease or
loan or other credit transaction covering personal property other than a
motor vehicle pursuant to which the lessor, creditor, or, in the absence of
a waiver by the lessor or creditor, the assignee, has waived the obligation
of the lessee or debtor for the gap amount; and
(d) "Non-motor vehicle lessee/debtor gap insurance" which insures the
lessee or debtor under a lease or loan or other credit transaction covering
personal property other than a motor vehicle pursuant to which the lessor,
creditor, or the lessor's or creditor's assignee has not waived the
obligation of the lessee or debtor for the gap amount.
30. "Substantially similar kind of insurance," means such insurance which
in the opinion of the Superintendent of the New York Insurance Department is
determined to be substantially similar to one of the foregoing kinds of
insurance and thereupon for the purposes of the Insurance Law shall be deemed to
be included in that kind of insurance.
Article 4
Policies or contracts of insurance may be issued by the
corporation whereby the holders thereof shall have the right to
participate in the profits of the corporation in such manner and to
such extent as may be determined by the Board of Directors, subject to
provisions of law.
Article 5
The mode and manner in which the corporate powers of this
corporation shall be exercised are through a Board of Directors and
through such officers as such Board of Directors shall empower. The
corporation shall have such officers as shall be provided for in the
by-laws, to be elected by the Board of Directors.
Article 6
The number of the directors of this corporation shall not be
less than thirteen (13) (except for vacancies temporarily unfilled) nor
more than twenty-five (25), the exact number of directors to be
determined from time to time by a resolution or resolutions adopted by
the affirmative vote of a majority of the directors. The directors
shall be divided into three classes, designated Class I, Class II and
Class III. Each class shall consist, as nearly as may be possible, of
one-third of the total number of directors constituting the entire
Board of Directors, and initially Class I, Class II and Class III shall
consist of 8, 8 and 7 directors, respectively. The term of the initial
Class I directors shall terminate on the date of the 1997 annual
meeting of shareholders; the term of the initial Class II directors
shall terminate on the date of the 1998 annual meeting of shareholders;
and the term of the initial Class III directors shall terminate on the
date of the 1999 annual meeting of shareholders. At each annual meeting
of shareholders beginning in 1997, successors to the class of directors
whose term expires at that annual meeting shall be elected for a
three-year term. If the number of directors is changed, any increase or
decrease shall be apportioned among the classes so as to maintain the
number of directors in each class as nearly equal as possible, and any
additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall
coincide with the remaining term of that class, but in no case will a
decrease in the number of directors shorten the term of any incumbent
director. A director shall hold office until the annual meeting of
shareholders for the year in which his term expires and until his
successor shall be elected and shall qualify for office, subject,
however, to prior death, resignation, retirement, disqualification or
removal from office. Any vacancy on the Board of Directors, however
resulting, may be filled by an affirmative vote of the majority of the
directors then in office, even if less than a quorum, or by an
affirmative vote of the sole remaining director. Any director elected
to fill a vacancy shall hold office for a term that shall coincide with
the term of the class to which such director shall have been elected.
Article 7
(a) The directors of the corporation shall be elected at the
annual meeting of shareholders of the corporation by a plurality of the
votes cast at the meeting. The annual meeting of shareholders of the
corporation for the election of the directors and for the transaction
of such other business as may properly come before each meeting shall
be held on the fourth Tuesday in April of each year or, if such day is
a holiday, on the next succeeding business day at the principal office
of the company in New York or at such other place within or without the
State of New York as may be fixed from time to time by resolution of
the Board of Directors and set forth in the notice or waiver of notice
of the meeting.
(b) At all times a majority of the directors of this
corporation shall be citizens and residents of the United States, and
not less than three (3) directors shall be residents of the State of
New York. Each director must be at least eighteen (18) years of age.
(c) The officers of this corporation shall be elected
annually by the Board of Directors.
(d) No director shall be personally liable to the corporation
or any of its shareholders for damages for any breach of duty as a
director; provided, however, that the foregoing provision shall not
eliminate or limit (i) the liability of a director if a judgment or
other final adjudication adverse to him or her establishes that his or
her acts or omissions were in bad faith or involved intentional
misconduct or any violation of the Insurance Law or a knowing
violation of any other law or that he or she personally gained in fact
a financial profit or other advantage to which he or she was not
legally entitled; or (ii) the liability of a director for any act or
omission prior to the adoption of this provision by amendment dated
March 5, 1992.
Article 8
The amount of the authorized capital of the corporation shall be
$5,120,000 and shall consist of 3,200,000 shares of Common Stock, par
value $1.60 per share. From and after the filing of this Restated
Charter, no additional shares which the corporation has authority to
issue shall be issued without the prior written consent of the
Superintendent of Insurance of the State of New York.
Article 9
The duration of the corporate existence of this corporation shall be
perpetual.
Article 10
The corporation shall have the power:
1. To assume and exercise all the rights, powers and privileges that
are now or may hereafter be conferred by law upon similar corporations
and to have the right of perpetual succession, sue and be sued, make
contracts, enter into lawful treaties with other insurance
corporations or associations, acquire, own and transfer property, real
and personal, and have a seal.
2. To enter into and execute any and all contracts, agreements and
treaties for the purpose of insuring risks, and to do all things
necessary, proper or consistent with the carrying out of the objects
and purposes of this corporation and to exercise all the rights,
powers and privileges that may now or hereafter be authorized or
permitted by the laws of the State of New York and the laws of the
United States of America, and to conduct its business in other states,
territories, and possessions of the United States.
3. To buy, sell, invest and reinvest its funds in any of the
securities or property in which an insurance company organized under
the laws of the State of New York may now or hereafter lawfully
invest.
4. To borrow money and to issue its notes or debentures to evidence
such borrowing, but any debentures so issued shall be subordinate to
the rights of shareholders or creditors of this corporation.
5. To have and exercise all of the rights and powers necessary and
incident to carrying into effect the purposes for which this
corporation is formed.
Article 11
The Board of Directors shall have the power to make, alter, amend or
repeal by-laws consistent with this Restated Charter and the laws of
the State of New York, regulating the business and the conduct of the
affairs of the corporation, and creating, defining, limiting or
regulating the powers of the corporation, of the directors and of the
shareholders.
5. The foregoing Amendment and Restatement of the Charter was
authorized by the affirmative vote of two-thirds of all votes cast on
June 17, 1996, by policyholders entitled to vote on the plan of
reorganization of the corporation pursuant to Section 7307 of the
Insurance Law.
IN WITNESS WHEREOF, the undersigned have signed this Certificate this
5th day of July, 1996.
/s/ William M. Stamp, Jr.
-------------------------
Name: William M. Stamp, Jr.
Title: President
/s/ Victoria M. Stanton
-----------------------
Name: Victoria M. Stanton
Title: Secretary
<PAGE>
STATE OF RHODE ISLAND )
: ss.:
CITY AND COUNTY OF )
On this 5th day of July, 1996, before me personally appeared
William M. Stamp, Jr., to me known and known to me to be one of the persons
described in and who executed the foregoing instrument, and he duly acknowledged
to me that he executed the same.
/s/ Ellen Bowers
----------------
Notary Public My commission
expires 7/21/99
STATE OF NEW YORK )
: ss.:
CITY AND COUNTY OF ALBANY )
On this 17th day of July, 1996, before me personally appeared
Victoria M. Stanton, to me known and known to me to be one of the persons
described in and who executed the foregoing instrument, and she duly
acknowledged to me that she executed the same.
/s/ Jamie H. Gearon
-------------------
Notary Public, State of New York
No. 02GE4994491
Qualified in Schenectady County
Commssion Expires 4/98
<PAGE>
BY-LAWS
FARM FAMILY CASUALTY INSURANCE COMPANY
(As amended and restated on July 26, 1996
and as amended up to and including February 13, 1997)
ARTICLE I
Name, Location and Purpose
Section 1. Name. The name of this company is FARM FAMILY CASUALTY INSURANCE
COMPANY.
Section 2. Location. The location of its principal or home office shall be
in the Town of Bethlehem, County of Albany, State of New York. It may establish
and maintain offices, depositories and agencies elsewhere in the United States
for the transaction of its business.
Section 3. Purpose. The purpose for which the company is formed is to make
contracts of insurance on any and all kinds of insurance as set forth in the
Restated Charter.
ARTICLE II
Policyholder Eligibility
The following persons shall be eligible and qualified to make application
for insurance in this company:
(a) State agricultural organizations within the Northeastern region
affiliated with the American Farm Bureau Federation;
(b) County agricultural organizations affiliated with said State
agricultural organizations;
(c) Members and associate members in good standing of said State and County
agricultural organizations, and the dependent members of the immediate family
residing in the household of such members and associate members;
(d) Employees of the company or of Farm Family Life Insurance Company or of
any of their respective affiliates; and
(e) Such other persons as the company may be obligated to insure by virtue
of an assigned risk plan or law of any State in which the company is licensed to
do business. A person shall cease to be eligible to be a policyholder when such
person no longer meets any of the above criteria.
ARTICLE III
Shareholders
Section 1. Annual Meeting. The annual meeting of the
shareholders for the election of the directors and for the transaction of such
other business as may properly come before such meeting shall be held on such
date fixed by or under the Restated Charter and stated in the notice or waiver
of notice of the meeting.
Section 2. Special Meetings. Special meetings of the
shareholders may be called at any time by the president or by a resolution of
the board of directors and must be called upon written request of the
shareholders owning of record a majority of the shares of the outstanding
capital stock of the company and entitled to vote. At a special meeting, no
business will be transacted and no corporate action shall be taken other than
that stated in the notice of the meeting except with the unanimous consent,
either in person or by proxy, of all the shareholders entitled to vote with
respect to such business.
Section 3. Notice of Meeting. Not less than ten (10) nor more
than fifty (50) days before each shareholders' meeting, the secretary shall give
written notice of the meeting to each shareholder entitled to notice of the
meeting. The notice shall state the time and place of the meeting and, if the
meeting is a special meeting or notice of the purpose is required by statute,
the purpose of the meeting. Any meeting of shareholders, annual or special, may
adjourn from time to time to reconvene at the same or some other place, and no
notice need be given of any such adjourned meeting other than by announcement.
Section 4. Quorum. Except as otherwise required by law, the
Restated Charter or these by-laws, the holders of a majority of the outstanding
capital stock of the company entitled to vote at any meeting, represented in
person or by proxy, shall constitute a quorum for all purposes. In the absence
of a quorum, the shareholders entitled to vote thereat, represented in person or
by proxy, shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally noticed. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
shareholder entitled to vote at the meeting.
Section 5. Voting. Each shareholder entitled to vote at a
meeting of the shareholders shall be entitled to one vote for each share of
stock registered in such shareholder's name on the books of the Company on the
date fixed as a record date for the determination of its shareholders entitled
to vote, as hereinafter provided. Unless otherwise required by law, the Restated
Charter or these by-laws, any question brought before any meeting of
shareholders shall be decided by the vote of the holders of a majority of the
capital stock represented and entitled to vote thereat. Such votes may be cast
in person or by proxy but no proxy shall be voted on or after three (3) years
from its date, unless such proxy provides for a longer period. The board of
directors, in its discretion, or the officer of the company presiding at a
meeting of the shareholders, in his discretion, may require that any votes cast
at such meeting shall be cast by written ballot.
Section 6. Written Consent. Any action required or permitted
to be taken at any meeting of the shareholders may be taken without a meeting by
the written consent thereto of the shareholders, setting forth such action and
signed by the holders of all the outstanding shares entitled to vote thereon.
ARTICLE IV
Board of Directors
Section 1. Powers. The board of directors shall manage and
conduct all the business and affairs of the company and shall have and may
exercise all such powers of the company as are not by law, by the Restated
Charter or by these by-laws conferred on or reserved to the shareholders.
Section 2. Number-Term-Qualifications. The total number of
directors shall not be less than thirteen (13) (except for vacancies temporarily
unfilled) nor more than twenty-five (25), the exact number of directors to be
determined from time to time by a resolution or resolutions adopted by the
affirmative vote of a majority of the directors, provided that such action may
not affect the tenure of office of any director. A majority of the directors
shall be citizens and residents of the United States, and not less than three
(3) shall be residents of the State of New York. Directors must be at least
eighteen (18) years of age but need not be shareholders.
Section 3. Election. Directors shall be elected at the annual
meeting of shareholders by a plurality of the votes cast at such meeting and,
unless otherwise provided in the Restated Charter, each director so elected
shall hold office until the annual meeting of shareholders for the year in which
his term expires and shall serve until his successor is duly elected and
qualified, or until his earlier death, resignation, retirement, disqualification
or removal from office.
Section 4. Vacancies. Any vacancy occurring in the board of
directors, however created, may be filled by an affirmative vote of the majority
of directors then in office, even if less than a quorum, or by an affirmative
vote of the sole remaining director. Any director elected to fill a newly
created directorship resulting from an increase in any class of directors shall
hold office for a term that shall coincide with the remaining term of the other
directors of that class. A director elected by the board of directors to fill a
vacancy not resulting from an increase in the number of directors shall have the
same term as the remaining term of his predecessor.
Section 5. Organization Meeting. The regular organization
meeting of the board of directors shall be held immediately after the
adjournment of the annual meeting of shareholders, or as soon thereafter as a
quorum of the directors can be obtained, for the election of officers and the
transaction of any other business which may properly be brought before the
meeting. No notice of such meeting shall be necessary to the directors in order
legally to constitute the meeting, provided a majority of the board shall be
present.
Section 6. Other Meetings. The board of directors of the
company shall hold regular meetings (including the regular organization meeting)
at least four (4) times in each calendar year. Special meetings of the board of
directors may be called by the chairman or the president at any time or by the
secretary when requested in writing by seven (7) directors. Notice of all
regular and special meetings of the directors shall be given by the secretary to
each director by mailing same to him at his residence or usual place of business
at least five (5) days before said meeting, or by telephonic, telegraphic or
facsimile notice sent at least twenty-four (24) hours before said meeting, or on
such shorter notice as the person or persons calling such meeting may deem
necessary or appropriate in the circumstances. Unless these by-laws or a
resolution of the board of directors provide otherwise, the notice need not
state the business to be transacted at or the purposes of any regular or special
meeting of the board of directors. Any meeting of the board of directors,
regular or special, may adjourn from time to time to reconvene at the same or
some other place, and no notice need be given of any such adjourned meeting
other than by announcement. The directors may hold meetings and transact
business without notice when all are present or consent thereto in writing.
Section 7. Time and Place of Meetings. All meetings of the
board of directors shall be held at such time and place as the board of
directors may designate either within or without the State of New York.
Section 8. Quorum. Except as may be otherwise specifically
provided by law, the Restated Charter or these by-laws, at all meetings of the
board of directors, a majority of the entire number of the members of the board
of directors shall constitute a quorum of the board of directors for the
transaction of all business, and the act of a majority of the directors present
in quorum shall determine any matter.
Section 9. Actions of Board. Unless otherwise provided by
law, the Restated Charter or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting if all the members of the board of directors or
the committee, as the case may be, consent in writing to the adoption of a
resolution authorizing the action, and the writing or writings are filed with
the minutes of proceedings of the board of directors or the committee;
provided, however, that any action without a meeting of the board of
directors shall be limited to those situations where time is of the essence
and not in lieu of a regular meeting.
Section 10. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Restated Charter or these by-laws, members of the
board of directors of the company, or any committee designated by the board of
directors, may participate in a meeting of the board of directors or such
committee by means of a conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other
at the same time, and participation in a meeting pursuant to this Section 10
shall constitute presence in person at such meeting.
Section 11. Compensation. The board of directors shall fix the
compensation of all officers of the company and may fix a reasonable
compensation to be paid directors for attending meetings of the board of
directors. The compensation paid employees and agents of the company shall be
within the limitations of a budget approved by the board of directors.
ARTICLE V
Officers
Section 1. Election. At its annual organization meeting, the
board of directors shall elect by ballot from one of their own number a chairman
and a vice-chairman of the board of directors. The board of directors shall also
elect, either from among their own number or otherwise, a president, a secretary
and a treasurer and may elect, either from among their own number or otherwise,
one or more vice-presidents, assistant secretaries, assistant treasurers and
such other officers as the board may determine that the interests of the company
require. The board of directors shall have the power to prescribe additional
powers and duties for the officers herein provided for and to change such duties
whenever the board of directors may deem it advisable or necessary. The
chairman, vice-chairman, president, vice-president, secretary, assistant
secretary, treasurer, assistant treasurer and other officers shall each serve
for the term fixed by the board of directors and until their successors shall
have been elected or appointed and have qualified. Any number of offices may be
held by the same person, except the offices of president and secretary and
unless otherwise prohibited by law, the Restated Charter or these by-laws.
Section 2. Chairman of the Board of Directors. The chairman of
the board of directors shall preside at all meetings of the shareholders and of
the board of directors. Except where by law the signature of the president is
required, the chairman of the board of directors shall possess the same power as
the president to sign all contracts, certificates and other instruments of the
company which may be authorized by the board of directors. During the absence or
disability of the president, the chairman of the board of directors shall
exercise all the powers and discharge all the duties of the president. The
chairman of the board of directors shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him by these
by-laws or by the board of directors.
Section 3. Vice-Chairman of the Board of Directors. The
vice-chairman of the board of directors, in the event of the absence or
disability of the chairman of the board of directors, shall perform the duties
and exercise the powers of the chairman, and shall perform such other duties and
may exercise such other powers as from time to time may be assigned to him by
these by-laws or by the board of directors.
Section 4. President. The president shall be the chief
executive officer of the company and shall, subject to the control of the board
of directors and the chairman of the board of directors, have general
supervision of the business of the company and shall see that all orders and
resolutions of the board of directors are carried into effect. He shall execute
all bonds, mortgages, contracts and other instruments of the company requiring a
seal, under the seal of the company, except where required or permitted by law
to be otherwise signed and executed and except that the other officers of the
company may sign and execute documents when so authorized by these by-laws, the
board of directors, the chairman of the board of directors or the president. The
president shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these by-laws or by the
board of directors.
Section 5. Vice-Presidents. Each vice president shall perform
such duties and have such powers as from time to time may be assigned to him by
these by-laws or by the board of directors.
Section 6. Secretary. The secretary shall attend all meetings
of the board of directors and all meetings of shareholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
secretary shall also perform like duties for the standing committees when
required. The secretary shall give, or cause to be given, notice of all meetings
of shareholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. If the secretary shall be unable
or shall refuse to cause to be given notice of all meetings of shareholders and
special meetings of the board of directors, and if there be no assistant
secretary, then either the board of directors or the president may choose
another officer to cause such notice to be given. The secretary shall have
custody of the seal of the company and the secretary or any assistant secretary,
if there be one, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of the
secretary or by the signature of any such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the company and to attest the affixing by his signature. The secretary shall see
that all books, reports, statements, certificates and other documents and
records required by law to be kept or filed are properly kept or filed, as the
case may be. The secretary shall sign all policies of insurance in person, or by
facsimile when so authorized by the board of directors, and such other papers as
may be necessary for the transaction of the company's business.
Section 7. Treasurer. The treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
company in such depositories as may be designated by the board of directors. The
treasurer shall disburse the funds of the company as may be ordered by the board
of directors, taking proper vouchers for such disbursements, and shall render to
the president and the board of directors, at its regular meetings, or when the
board of directors so requires, an account of all his transactions as treasurer
and of the financial condition of the company. The treasurer shall perform all
other duties usually incident to his office or which may be from time to time
assigned by the board of directors.
Section 8. Assistant Secretaries. Except as may be otherwise
provided in these by-laws, assistant secretaries, if there be any, shall perform
such duties and have such powers as from time to time may be assigned to them by
the board of directors, the president, any vice president, if there be one, or
the secretary, and in the absence of the secretary or in the event of his
disability or refusal to act, shall perform the duties of the secretary, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the secretary.
Section 9. Assistant Treasurers. Assistant treasurers, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the board of directors, the president, any vice
president, if there be one, or the treasurer, and in the absence of the
treasurer or in the event of his disability or refusal to act, shall perform the
duties of the treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the treasurer.
Section 10. Other Officers. Such other officers as the board
of directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the board of directors. The board of
directors may delegate to any other officer of the company the power to choose
such other officers and to prescribe their respective duties and powers.
Section 11. Removal. Any officer may be summarily removed at
any time at the pleasure of the board of directors by an affirmative vote of
two-thirds (2/3) of all the directors, with or without cause.
Section 12. Vacancies. Any vacancy in the offices of the
company may be filled by the board of directors at any regular or special
meeting, and in case of the absence or temporary disability of any officer, the
board of directors may designate an incumbent for the time being, who shall,
during such incumbency, have the powers of such officer.
Section 13. Bonds. The board of directors shall require all
officers, agents and employees having control of or access to monies or
securities of the company in the regular discharge of their duties to give bond
to the company, with sufficient sureties conditioned upon the honesty of such
officers, agents or employees, in such amounts as may be deemed necessary, and
containing such other conditions as may from time to time be required by the
board of directors. The company shall be responsible for the premium on any bond
necessary under this provision.
ARTICLE VI
Committees
Section 1. Executive Committee. The board of directors shall
elect an executive committee consisting of at least five (5) directors of the
company. Said committee shall have such power and possess such authority as the
board of directors shall, from time to time, by by-laws or resolution, vest in
it. This committee shall hold office subject to the will and pleasure of the
board of directors. All vacancies in the membership of this committee shall be
filled by the board of directors. The executive committee shall have and is
hereby granted full power and authority to conduct and control the business of
the corporation between meetings of the board of directors as is vested in the
board of directors when in session except as otherwise limited by the board of
directors. The executive committee shall elect one (1) of their number to serve
as chairman. A majority of the entire membership of the Executive Committee
attending a meeting shall constitute a quorum. But no such majority vote shall
be valid unless the number of operating officers and salaried employees voting
as directors is less than the majority of the directors present and voting.
Section 2. Investment Committee. The board of directors shall
elect an investment committee of ten (10) directors of the company. Such
committee shall be charged with the duty of authorizing and supervising of loans
and investments. The investment committee shall organize with a chairman and a
secretary from among its members. It shall be the duty of the investment
committee, subject to such limitations the board of directors may provide, to
examine all funds and securities as often as they may deem necessary or when
required by the board of directors, and to report to the board of directors, as
often as directed, the condition of the funds, securities and investments of the
corporation. Any six (6) members attending the meeting shall constitute a
quorum. But no such majority vote shall be valid unless the number of operating
officers and salaried employees voting as directors is less than the majority of
the directors present and voting.
Section 3. Other Committees. The board of directors shall have
the power to appoint such other committees as it may deem necessary for the
efficient conduct of the business of the company. The board of directors shall
designate from time to time by by-laws or resolutions the quorum requirements
for meetings of such committees. Every such committee shall have such power and
possess such authority as the board of directors from time to time by by-laws or
resolutions vests in it, and shall report its doings to the meeting of the board
of directors next ensuing.
Section 4. Limitations. The board of directors shall at all
times have power to modify, add to, take from, or otherwise change and alter the
duties and function of all committees as it may from time to time see fit.
ARTICLE VII
STOCK
Section 1. Form of Certificates. Every holder of stock in the
company shall be entitled to have a certificate signed, in the name of the
company, (a) by the president or a vice-president and (b) by the treasurer or an
assistant treasurer, or the secretary or an assistant secretary, of the company,
certifying the number of shares owned by the shareholder in the company.
Section 2. Signatures. Where a certificate is countersigned by
(a) a transfer agent other than the company or its employee, or (b) a registrar
other than the company or its employee, any other signature on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the company with the same effect as
if he were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The board of directors may
direct a new certificate to be issued in place of any certificate theretofore
issued by the company alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as the board of directors shall require and/or to give the company a
bond in such sum as it may direct as indemnity against any claim that may be
made against the company with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 4. Transfers. Stock of the company shall be
transferable in the manner prescribed by law and in these by-laws. Transfers of
stock shall be made on the books of the company only by the person named in the
certificate or by his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued.
Section 5. Record Date. In order that the company may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the board of directors may fix,
in advance, a record date, which shall not be more than fifty (50) days nor less
than ten (10) days before the date of such meeting, nor more than fifty (50)
days prior to any other action. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting.
ARTICLE VIII
Indemnity
Section 1. Indemnification of Officers and Directors. Except to the
extent prohibited by the Business Corporation Law of the State of New York and
the Insurance Law of the State of New York, the company shall indemnify each
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether by or in the right of the
company or otherwise, by reason of the fact that such person or if such person
is an executor, administrator or legal representative, the person for whom such
person was acting is or was either (a) a director or officer of the company or
(b) a director or officer of the company who serves or served at the request of
the company as a director, officer, employee, agent of, or in any capacity for
any other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise (any such person described in clause (a) or (b) hereinafter,
"indemnified persons"), against judgments, fines, penalties, amounts paid in
settlement and reasonable expenses, including attorneys' fees, incurred in
connection with such action or proceeding, or any appeal therein; provided,
however, that no such indemnification shall be made if a judgment or other final
adjudication adverse to such indemnified person establishes that either (i) such
indemnified person's acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action so
adjudicated, or (ii) such indemnified person personally gained in fact or
financial profit or other advantage to which he or she was not legally entitled;
and provided further that no such indemnification shall be required with respect
to any settlement or other nonadjudicated disposition of any threatened or
pending action or proceeding unless the company has given its prior consent to
such settlement or other disposition.
The company shall advance or promptly reimburse upon request
any indemnified person for all expenses, including attorneys' fees, reasonably
incurred in defending or participating in any action, suit or proceeding in
advance of the final disposition thereof upon receipt of an undertaking by or on
behalf of such indemnified person to repay such amount if such indemnified
person is ultimately found not to be entitled to indemnification or, where
indemnification is granted, to the extent the expenses so advanced or reimbursed
exceed the amount to which such indemnified person is entitled; provided,
however, that such indemnified person shall cooperate in good faith with any
request by the company that common counsel be utilized by the parties to an
action or proceeding who are similarly situated unless to do so would be
inappropriate due to actual or potential differing interests between or among
such parties.
The board of directors of the company is authorized to provide
indemnification and advancement of expenses to such other persons as the board
shall determine from time to time in its sole discretion.
Nothing herein shall limit or affect any right of any
indemnified person otherwise than hereunder to indemnification or advancement of
expenses, including attorneys' fees, under any statute, rule, regulation,
certificate of incorporation, by-law, insurance policy, contract or otherwise.
Anything in these by-laws to the contrary notwithstanding, no
elimination of this article, and no amendment of this article adversely
affecting the right of any indemnified person to indemnification or advancement
of expenses hereunder shall be effective until the sixtieth (60th) day following
notice to such indemnified person of such action, and no elimination of or
amendment to this article shall deprive any indemnified person of his or her
rights hereunder arising out of alleged or actual occurrences, acts or failure
to act prior to such sixtieth (60th) day.
The company shall not, except by elimination or amendment of
this article in a manner consistent with the preceding paragraph, take any
corporate action or enter into any agreement which prohibits, or otherwise
limits, the rights of any indemnified person to indemnification or advancement
of expenses in accordance with the provisions of this article. If the company
fails within thirty (30) days after a written claim has been received by the
company to make any payment in accordance with the indemnification and
advancement of expenses provisions of this article, the indemnified person may
at any time thereafter bring suit against the company to recover the unpaid
amount of the claim and, if successful in whole or in part, the indemnified
person shall be entitled to be paid also the expense of prosecuting such claim.
It shall be a defense to any action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the company) that the indemnified person has not met the standards
of conduct which make it permissible under this article to indemnify the
indemnified person for the amount claimed, but the burden of proving such
defense shall be on the company. Neither the failure of the company (including
its board of directors, legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the indemnified person is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in this article, nor an actual
determination by the company (including its board of directors, legal counsel,
or its shareholders), that the indemnified person has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the indemnified person has not met the applicable standards of conduct.
No payment of indemnification, advancement or allowance under
the Business Corporation Law of the State of New York as from time to time
amended shall be made unless a notice has been filed with the Superintendent of
Insurance of the State of New York, not less than thirty (30) days prior to such
payment specifying the persons to be paid, the amounts to be paid, the manner in
which such payment is authorized and the nature and status, at the time of such
notice, of the litigation or threatened litigation.
The indemnification and right to advancement of expenses of
any indemnified person provided by this article shall continue after such
indemnified person has ceased to be a director, officer or employee of the
company and shall inure to the benefit of such indemnified person's heirs,
executors, administrators and legal representatives.
The company is authorized to enter into agreements with any of
its directors, officers, employees or other persons extending rights to
indemnification and advancement of expenses to such person to the fullest extent
permitted by applicable law, but the failure to enter into any such agreement
shall not affect or limit the rights of such person pursuant to this article, it
being expressly recognized hereby that all directors and officers of the
company, by serving as such after adoption hereof, are acting in reliance hereon
and that the company is estopped to contend otherwise.
In case any provision in this article shall be determined at
any time to be unenforceable in any respect, the other provisions shall not in
any way be affected or impaired thereby, and the affected provision shall be
given the fullest possible enforcement in the circumstances, it being the
intention of the company to afford indemnification and advancement of expenses
to indemnified persons to the fullest extent permitted by law.
For purpose of this article, the company shall be deemed to
have requested a person to serve an employee benefit plan where the performance
by such person of his or her duties to the company also imposes duties on, or
otherwise involves services by, such person to the plan or participants or
beneficiaries of the plan, and excise taxes assessed on a person with respect to
an employee benefit plan pursuant to applicable law shall be considered
indemnifiable expenses. For purposes of this article, the term "the company"
shall include any legal successor to this company, including any company which
acquires all or substantially all of the assets of the company in one or more
transactions.
Section 2. Insurance. The company shall have the power to
purchase and maintain insurance to indemnify (a) the company for any obligation
which it incurs as a result of the indemnification of directors and officers
under the provisions of this article, (b) directors and officers in instances in
which they may be indemnified by the company under the provisions of this
article, and (c) the company for any obligation which it incurs and directors
and officers under any indemnification provided in the Restated Charter or
by-laws, a resolution of shareholders, a resolution of directors, or any
agreement.
ARTICLE IX
Insurance
Section 1. Kinds of Insurance. The board of directors shall
determine the kinds of insurance and the nature of the risks to be covered
pursuant to the provisions of the Restated Charter.
Section 2. Form of Policies. The policies of insurance issued
by the company shall be in such form and upon such terms and conditions as may
be determined and authorized by the board of directors.
Section 3. Classification of Risks. Subject to statutory
requirements, the board of directors shall have authority to establish
reasonable classifications within the respective kinds of insurance.
Section 4. Participation in Profits. Policies or contracts of
insurance may be issued by the company whereby the holders thereof shall have
the right to participate in the profits of the company in such manner and to
such extent as may be determined by the board of directors, subject to the
provisions of law.
Section 5. Reinsurance.The company may contract for
reinsurance on its own risks and may make and issue reinsurance contracts on
risks of others.
Section 6. Alteration of Policies. No contract or policy of
insurance issued by the company shall be altered, changed or any of its
provisions waived except by an officer of the company duly authorized by the
board of directors, by and with the consent of the insured.
Section 7. Cancellation. Any policy may be cancelled in the
manner provided therein and the company shall thereupon be relieved and
discharged from all liability for any loss thereafter resulting or incurred.
Section 8. Notice. Notice of any specific premium due, or
cancellation, or for any other purpose, shall be deemed sufficient if given by
mailing, postpaid, to the policyholder a printed or written notice thereof,
directed to the last post office address of such policyholder as recorded on the
records of the company.
ARTICLE X
Miscellaneous
Section 1. Dividends. Dividends upon the capital stock of the
company may be declared by the board of directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any funds
of the company available for dividends such sum or sums as the board of
directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the company, or for any proper purpose,
and the board of directors may modify or abolish any such reserve.
A member of the board of directors shall be fully protected in
relying in good faith upon the records of the company and upon such information,
opinions, reports or statements presented to the company by any of its officers
or employees, or committees of the board of directors, or by any other person as
to matters the director reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the company, as to the value and amount of the assets,
liabilities and/or net profits of the company, or any other facts pertinent to
the existence and amount of surplus or other funds from which dividends might
properly be declared and paid.
Section 2. Conveyances. All conveyances of real property,
releases or mortgages, liens and judgments, and all other instruments affecting
real property, made by the company or required by law to be made a matter of
record, shall be executed by the president or vice-president and attested to by
the secretary or assistant secretary, and the corporate seal affixed thereto.
Section 3. Disbursements. All checks or demands for money and
notes of the company shall be signed by such officer or officers or such other
persons as the board of directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of this company shall
begin on the first day of January and terminate on the last day of December of
each year.
Section 5. Corporate Seal. The corporation shall have a
corporate seal and shall have inscribed thereon, "Farm Family Casualty Insurance
Company, State of New York, Corporate Seal", which words may be changed at any
time by resolution of the board of directors.
ARTICLE XI
Notices
Section 1. Notices. Whenever written notice is required by
law, the Restated Charter or these by-laws, to be given to any director, member
of a committee or shareholder, such notice may be given by mail, addressed to
such director, member of a committee or shareholder, at his address as it
appears on the records of the company, with postage thereon prepaid, and such
notice shall be deemed to be given at the time when the same shall be deposited
in the United States mail. Written notice may also be given personally or by
telegram, telex, cable or facsimile.
Section 2. Waivers of Notice. Whenever any notice is required
by law, the Restated Charter or these by-laws to be given to any director,
member of a committee or shareholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a shareholder
at a meeting shall constitute a waiver of notice of such meeting, except when a
shareholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
has not been lawfully called or convened.
ARTICLE XII
Amendments
Section 1. Amendment to Restated Charter. The Restated Charter
shall be amended in such manner as is provided by the laws of the State of New
York.
Section 2. Amendment to By-Laws. The board of directors shall
have the express power, without a vote of shareholders, to adopt any by-law, and
to amend, alter or repeal the by-laws of the company, except to the extent that
the by-laws or the Restated Charter otherwise provide. The board of directors
may exercise such power upon the affirmative vote of a majority of the entire
board of directors. Shareholders may adopt any by-law, or amend, alter or repeal
the by-laws of the company, upon the affirmative vote of the holders of at least
a majority of the votes entitled to be cast by the holders of all then
outstanding voting shares of the company, voting together as a single class.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 7
<CIK> 0000277269
<NAME> Farm Family Casualty Insurance Company
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<PERIOD-END> Sep-30-1997
<FISCAL-YEAR-END> Dec-31-1997
<DEBT-HELD-FOR-SALE> 240,304
<DEBT-CARRYING-VALUE> 9,181
<DEBT-MARKET-VALUE> 9,456
<EQUITIES> 4,077
<MORTGAGE> 1,682
<REAL-ESTATE> 0
<TOTAL-INVEST> 260,255
<CASH> 3,678
<RECOVER-REINSURE> 11,419
<DEFERRED-ACQUISITION> 32,100
<TOTAL-ASSETS> 348,696
<POLICY-LOSSES> 150,297
<UNEARNED-PREMIUMS> 68,529
<POLICY-OTHER> 11,085
<POLICY-HOLDER-FUNDS> 114,594
<NOTES-PAYABLE> 1,277
0
0
<COMMON> 3,606
<OTHER-SE> 6,002
<TOTAL-LIABILITY-AND-EQUITY> 348,696
109,191
<INVESTMENT-INCOME> 13,067
<INVESTMENT-GAINS> 5,649
<OTHER-INCOME> 720
<BENEFITS> 76,421
<UNDERWRITING-AMORTIZATION> 29,789
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 22,163
<INCOME-TAX> 7,313
<INCOME-CONTINUING> 14,850
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,850
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 114,383
<PROVISION-CURRENT> 76,622
<PROVISION-PRIOR> (198)
<PAYMENTS-CURRENT> 30,470
<PAYMENTS-PRIOR> 36,175
<RESERVE-CLOSE> 124,158
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
