BYLAWS OF MISSISSIPPI SURPLUS LINES ASSOCIATION

A NON PROFIT CORPORATION

ARTICLE I

NAME, PURPOSE, POWERS, OFFICES AND REGISTERED OFFICE

Section 1. Name. The name of the nonprofit corporation is Mississippi Surplus Lines Association (“MSLA” or the “Corporation”).

Section 2. Formation. On September 18, 1997, the Corporation was created as a non-profit corporation by filing Articles of Incorporation with the Mississippi Secretary of State.

Section 3. Background and Purpose. Miss. Code Ann. § 83-21-21, as amended effective March 11, 2011, provides that the Commissioner of Insurance may rely upon the advice and assistance of a duly constituted association of surplus lines insurance producers in carrying out the purposes of Title 83, Chapter 21 of the Miss. Code Ann. (1972), which governs foreign insurance companies providing insurance in the State of Mississippi. MSLA was established to serve the role under Miss. Code Ann. § 83-21-21. The current version of § 83-21-21 is set out below:

§ 83-21-21 Surplus lines policies

1. The Commissioner of Insurance may establish a stamping procedure for all eligible nonadmitted/surplus lines insurance policies sold on risks subject to the payment of premium taxes to the State of Mississippi.
2. The Commissioner of Insurance may rely upon the advice and assistance of a duly constituted association of surplus lines insurance producers in carrying out the purposes of this chapter, if the association files with the commissioner:
1. A copy of the association’s constitution and articles of agreement of association or the association’s certificate of incorporation and bylaws and any rules and regulations governing the association’s activities;
2. A list of the association’s members; and
3. The name and address of a resident of this state upon whom notices or orders of the commissioner or process issued by the commissioner may be served.
3. The Commissioner of Insurance may examine the association’s records concerning the functions or duties performed on behalf of the commissioner by the association.
4. The association shall provide a means for the examination of all surplus lines coverages written to determine whether such coverages comply with the law and such rules or regulations as may be issued by the Commissioner of Insurance.
5. The Commissioner of Insurance may refuse to accept, or may suspend or revoke the acceptance of, an association for any of the following reasons:
1. It reasonably appears that the association will not be able to carry out the purposes of this chapter;
2. The association does not maintain and enforce rules and regulations which will ensure that members of the association and persons associated with those members will comply with this chapter, other applicable state law or rules or regulations promulgated under either;
3. The rules or regulations of the association do not ensure a fair representation of its members in the selection of directors and in the administration of its affairs;
4. The rules or regulations of the association do not provide for an equitable allocation of reasonable dues, fees and other charges among members;
5. The rules or regulations of the association impose an undue burden on competition; or
6. The association fails to meet other applicable requirements prescribed in this chapter.
6. A surplus lines insurance producer shall cooperate with the association and the Commissioner of Insurance in fulfilling the surplus lines agent’s statutory responsibility under this chapter.
7. Upon request from the association, the Commissioner of Insurance may approve the levy of an examination fee of not more than one percent (1%) of premiums charged under this chapter for the operation of the association to the extent that such operation relieves the commissioner of duties otherwise required of the Commissioner of Insurance under this chapter.
8. The association may revoke the membership of, and the Commissioner of Insurance may revoke the license in this state of, any licensee who fails to pay the examination fee when due, if the examination fee has been approved by the Commissioner of Insurance.
9. The fees levied and collected by the association pursuant to this section shall be subject to transfer to the Department of Insurance Special Fund by act of the Legislature.
10. The association, the association’s board members and employees shall not be subject to liability for any functions or duties performed in good faith, from and after May 9, 2008, by the association pursuant to this chapter.
11. In the alternative, the Commissioner of Insurance may contract with a third party to assist the commissioner with carrying out the purposes of this chapter. The third party may collect an examination fee in an amount determined by the commissioner but not more than one percent (1%) of premiums charged under this chapter. The fees shall be collected and deposited into the Department of Insurance Special Fund, and from this fund the department may pay the third party a reasonable fee for its services.
12. Notwithstanding the provisions of Section 83-21-18(3), any stamping procedure established under this section may apply to the reporting, payment, collection and allocation of premium taxes for nonadmitted insurance consistent with any agreement, compact or procedures entered into by the commissioner under Section 83-21-18(1).
13. The commissioner may promulgate rules and regulations necessary for the implementation of this section.

Section 4. Powers. The Corporation shall have and exercise all of the powers necessary and incident to achieving its purposes pursuant to § 83-21-21 including, but not limited to, the powers set forth in these By-laws.

Section 5. Office. The office of the Corporation shall be at 504 Keywood Circle, Suite B, Flowood, Mississippi 39232, or such other place as the Board of Directors (“Directors”) from time to time may select.

Registered Office and Registered Agent. The address of the registered office for the Corporation is One Eastover Center, 100 Vision Drive, Suite 400, Jackson, Mississippi 39211. The name of the registered agent is C. Ted Sanderson, Jr. The Corporation may change the registered agent at any time by filing the appropriate documents with the Secretary of State.

ARTICLE II

SEAL AND FISCAL YEAR

Section 1. Seal. The seal of the Corporation shall have inscribed on it the name of the Corporation, and the words, "Nonprofit Seal”.

Section 2. Fiscal Year. The fiscal year of the Corporation shall begin January 1 and end on December 31 of each year.

ARTICLE III

MEMBERSHIP

Section 1. General. Pursuant to Miss. Code Ann. § 83-21-21 (1972), the Commissioner of Insurance issued Bulletin 97-6, dated November 7, 1997, mandating that each licensed surplus lines agent is a member of MSLA.

Section 2. Annual Meeting. An annual meeting of the membership shall be held during each calendar year on a date and at a time and place to be designated by the Board of Directors of the Corporation for the transaction of any business as may come before the membership, including the biannual election of directors as provided in Article IV, Section 3.

Section 3. Special Meetings. Special meetings of the membership may be called by a majority of the Board of Directors. Only business within the purpose or purposes described in the meeting notice required by Section 4 of this Article may be conducted at such special meeting.

Section 4. Notice of Meeting. A written or printed notice stating the place, date and time of a membership meeting, and in case of a special meeting, the purpose or purposes of the special meeting, shall be given to each member by the Executive Director or by any other person authorized by the Board of Directors to call the meeting. This notice shall be sent to each member, either personally or by first class or registered mail, at least ten (10) days, but not more than sixty (60) days, before the date designated for the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to each member at its last known address.
In the event there is to be brought before the membership at an annual meeting any matter which must be approved by the membership pursuant to Miss. Code Ann. §§79-11-269, 79-11- 281, 79-11-301, 79-11-315, 79-11-323, 79-11-331, 79-11-333 or 79-11-335, as amended, the notice of the annual meeting must include a description of such matter.

Section 5. Waiver of Notice. A member, either before or after a membership meeting, may waive notice of the meeting; and the waiver shall be deemed the equivalent of giving notice. Such waiver must be in writing, signed by the member and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. Attendance at a membership meeting of a member entitled to notice shall constitute a waiver of notice of the meeting unless the member attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called or convened.

Section 6. Actions by Ballot without Meeting. Any action that may be taken at any annual or special meeting may be taken without a meeting if the Corporation delivers a written ballot to every member entitled to vote and the other requirements are met of Miss. Code Ann. § 79-11-211 (1972).

Section 7. Adjournments. Any meeting of the membership may be adjourned to a different date, time or place and notice need not be given of the new date, time or place other than by announcement at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting at which a quorum is present or represented, any business may be transacted which could have been transacted at the meeting originally called.

Section 8. Actions by Consent Without Meeting. Any action that has to be approved by the members may be approved without a meeting or ballots if approved by members holding at least eighty percent (80%) of the voting power. The action must be evidenced by one or more consents describing the action taken, signed by those members representing at least eighty percent (80%) of the voting power.

Section 9. Voting. Each member shall be entitled to one (1) vote in all matters for which members of the Corporation are entitled to vote by law. Unless a greater vote is required by these By-laws or law, all actions by the members shall be by majority of the votes cast by the members.

ARTICLE IV

Section 1. Powers. All corporate powers shall be exercised by or under the authority of, and the affairs of the Corporation managed under the direction of, its Board of Directors (the "Board"). From among the Board's members, the Board shall elect a Chairman of the Board and a Vice Chairman of the Board who shall serve in such positions until the Board elects a new Chairman or Vice Chairman. The Chairman, and in his absence, the Vice Chairman, shall preside over Board meetings. Each director shall be qualified to vote on any issue that may properly come before the Board and to hold any office to which he may be elected or appointed.

Section 2. Number and Composition of Board. The number of directors shall be eight (8). When deemed in the best interest of the Corporation, the membership may, at any annual meeting or special meeting called for such purpose, increase or decrease the number of directors.

Section 3. Election of Directors. Biannually, beginning in 1999, directors shall be elected by the membership at the annual membership meeting. The Chairman of the Board shall appoint a nominating committee, subject to approval of the Board, at least ninety (90) days before the annual meeting to nominate individuals to fill the expiring terms of directors. The recommendations of the nominating committee shall be announced at least sixty (60) days before the annual meeting, and members shall be given ten (10) days after such announcement to make additional nominations of members who have signified their willingness to stand for election by petition supported by no less than ten (10) percent of the members. To the extent any such additional nominations in conjunction with the nominations from the nominating committee, would cause an increase in the number of directors beyond eight (8), then a vote in favor of the slate of nominees with the additional nominations shall also be a vote to increase the number of directors to the number on the slate of nominees. Ballots with the slate of nominees shall be mailed to members at least thirty (30) days prior to the annual meeting indicating the nominations by the nominating committee and any additional nominations by petition. The result of the election shall be counted the day prior to the annual meeting by persons appointed by the Board.

Section 4. Term of Office. The term of office for directors shall be two (2) years. Directors may be reelected for successive terms.

Section 5. Resignation and Removal of Directors. A director may resign at any time by giving written notice to the Board, the Chairman of the Board, or the Secretary/Treasurer of the Corporation. Such resignation shall take effect on the date of receipt or at any later time specified in said notice. The members may remove a director without cause at a meeting noticed for such purpose and if the number of votes cast to remove the director would be sufficient to elect the director at a meeting to elect directors.

Section 6. Vacancies. Vacancies on the Board, including a vacancy resulting from an increase in the number of directors, shall be filled by member election at the next annual meeting of the membership or at a special meeting of the membership called for such purpose; provided, however, the remaining directors may fill the vacancy until the annual or special meeting by affirmative vote of a majority of all directors remaining in office. Any vacancy filled by member election shall serve for the remaining term of the director whose vacancy was filled.

Section 7. Compensation and Reimbursement. Directors shall serve without compensation, but may be reimbursed for reasonable and necessary expenses incurred by them as members of the Board.

ARTICLE IV

MEETINGS AND ACTIONS OF THE DIRECTORS

Section 1. Meetings. The Board may hold regular or special meetings for the purpose, and at the date, time and place, determined by the Chairman or a majority of the Board. The regular meetings shall include an annual meeting after the annual membership meeting at which time the Board shall elect officers and consider other business. The Chairman may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all directors participating may simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

Section 2. Notice. The Chairman may issue a schedule for regular meetings. Once this is done, no further notice is required for a regular meeting. Special meetings of the Board must be preceded by at least two (2) days' notice of date, time and place of meeting.

Section 3. Actions without Meeting. Board actions may be taken without a meeting if the action is taken by all directors. The action must be evidenced by one or more written consents describing the action taken, signed by each director.

Section 4. Quorum. A quorum of the Board consists of a majority of the directors in office immediately before a meeting begins. If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the Board unless applicable law provides otherwise and except for the following actions where the affirmative vote of a majority of directors, whether or not present at the meeting, is required:

1. Hiring or dismissing the Executive Director or any officer;
2. Approving contracts with an annual obligation of $10,000.00 or more;
3. Borrowing money;
4. Proposing amendments to the By-laws; and
5. Authorizing a bank signatory.

Section 5. Committees. The Board may by resolution create one or more committees of the Board and appoint directors to serve on them, consistent with Miss. Code Ann. § 79-11- 265 (1972).

ARTICLE V

OFFICERS, AGENTS AND EMPLOYEES

Section 1. General. The Corporation shall have the officers described in these Bylaws or created by the Directors through resolution. The Directors may also employ other employees or agents, as it may deem necessary.

Section 2. Executive Director. The Executive Director shall be responsible for the day-to-day operations of the Corporation subject to policies established by the Board. The Executive Director shall report on the activities of the Corporation at the membership annual meeting pursuant to Miss. Code Ann. § 79-11-197 (1972).

Section 3. Secretary and Treasurer. The Secretary shall have responsibility for preparing minutes of directors' and members' meetings and for authenticating MSLA records. The Treasurer shall be the chief financial officer and shall report on the financial condition of the Corporation at the membership annual meeting pursuant to Miss. Code Ann. § 79-11-197 (1972). The Secretary and Treasurer shall be elected from the members of the Board. The position of Secretary and Treasurer may be held by the same person.

Section 4. Resignation or Removal. An officer, employee or agent may resign by giving notice to the Chairman. The Board may remove any officer, employee or agent at any time with or without cause, subject to any contractual obligations or applicable law.

ARTICLE VI

DISSOLUTION

The Corporation may be dissolved by following the relevant provisions of Miss. Code Ann. § 79-11-333 through 79-11-345. In the event the Corporation is dissolved and all of its liabilities have been satisfied, the Board shall transfer MSLA's remaining assets (if any) to any successor association established under the surplus lines statutes and approved for such transfer by the Commissioner of Insurance or, if no such organization exists to which the Commissioner will approve the transfer, to any state fund designated by the Commissioner of Insurance.

ARTICLE VII

INDEMNIFICATION

Section 1. General. Subject to the provisions of Miss. Code Ann. § 79-11-281, the Corporation shall indemnify an individual made a party to a proceeding because he is or was the Corporation's director or officer against liability incurred in the proceeding if:

1. He conducted himself in good faith; and
2. He in good faith believed:
1. In the case of conduct in his official capacity with the Corporation that his conduct was in its best interests; and
2. In all other cases, that his conduct was at least not opposed to its best interests; and
3. In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful.
   The determination of whether the indemnification is permissible because the individual has met the above standard of conduct, and the evaluation as to reasonableness of expenses, shall be made as set out in Miss. Code Ann. § 79-11-281.

Section 2. Absolute Indemnification. Notwithstanding anything above, the Corporation shall indemnify a director, officer, employee or agent who entirely prevails in the defense of any proceeding to which he was a party because he is or was a director, officer, employee, or agent of the Corporation against reasonable expenses incurred by him in connection with the proceeding.

Section 3. Advance Expense Payments. The Corporation may pay for or reimburse the reasonable expenses incurred by a director, officer, employee or agent who is a party to a proceeding in advance of final disposition of the proceeding if:

1. The director, officer, employee or agent furnishes the Corporation a written statement of his good faith belief that he has met the standard of conduct described in Section 1 above;
2. The director, officer, employee or agent furnishes the Corporation a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard of conduct; and
3. A determination is made that the facts then known to those making the determination would not preclude indemnification under Miss. Code Ann. § 79-11-281.
   Determinations and authorizations of payment under this section shall be made in the manner specified in Miss. Code Ann. § 79-11-281.

Section 4. Insurance. Pursuant to Miss. Code Ann. § 79-11-281, the Directors may authorize the purchase and maintenance of insurance on behalf of any individual who is or was a director, officer, employee or agent of the Corporation against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee or agent, whether or not the Corporation would have power to indemnify him against the same liability.

ARTICLE VIII

RECORD KEEPING

The Corporation shall keep all records required by Miss. Code Ann. § 79-11-283 and any other relevant laws. This shall include, as permanent records, minutes of all meetings of the Directors, a record of all actions taken by the directors without a meeting, and a record of all actions taken by committees of the Directors as may be authorized pursuant to Miss. Code Ann. § 79-11-265. This shall also include a record of its members in a form that permits preparation of a list of the names and address of all members, in alphabetical order by class showing the number of votes each member is entitled to vote.

ARTICLE IX

MISCELLANEOUS CORPORATE ACTS

Section 1. Signing of Checks, Notes and Other Instruments. Checks, notes, negotiable instruments, contracts, deeds, and other such legal documents shall be signed by the Chairman or Secretary/Treasurer or any other individuals from time to time designated by the Board.

Section 2. Deposits. All funds of the Corporation shall be, from time to time, deposited to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select and shall be drawn out only by a check signed by the Chairman or the Secretary/Treasurer, or by automated facsimile signature under their control, or by those other individuals authorized by the Board.

Section 3. Audit. All the accounts and books of the Corporation together with all supporting data shall be audited by a firm of disinterested certified public accountants approved by the Board.

ARTICLE X

AMENDMENTS

Pursuant to Miss. Code Ann. § 79-11-315 (1972), an amendment to these By-Laws to be adopted must be approved (a) by the Board, and (b) by the members by two-thirds (2/3) of the votes cast or a majority of the voting power, whichever is less.