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LB 325

Change provisions relating to qualifications and requirements for the board of directors of an insurance corporation

109th Legislature (2025-2026) Introduced by Mike Jacobson

LB 325 allows a five-year waiver to the Nebraska resident-director rule for certain large, long-domiciled insurers, with renewals, and a six-month cure if criteria lapse.

Approved by Governor on April 7, 2025
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Bill Summary · LB 325

Summary — LB 325 (2025)

Title: Change provisions relating to qualifications and requirements for the board of directors of an insurance corporation
Sponsor: Sen. Mike Jacobson
Status: Approved by Governor April 7, 2025

Purpose

LB 325 creates a limited statutory exemption from the longstanding Nebraska requirement that at least one director of an insurance corporation be a resident of Nebraska. The exemption is intended for large, long-established Nebraska‑domiciled insurers (or their wholly owned affiliates) that maintain substantial operational ties to the state.

Key provisions

  • Adds a five‑year waiver from the Nebraska‑resident‑director requirement upon filing a sworn affidavit with the Nebraska Department of Insurance.
  • Affidavit must be executed by the president or chairperson of the insurer and substantially follow the bill’s sample form (notarized or sworn before an authorized officer).
  • Criteria required to obtain the waiver (all must be met):
    • Principal corporate executive offices are located in Nebraska;
    • The insurer is publicly traded on a federally governed exchange or is a wholly owned affiliate of such a publicly traded corporation;
    • The insurer has been domiciled in Nebraska for at least 25 years;
    • The insurer employs more than 500 employees in Nebraska who are subject to Nebraska income tax on compensation from the insurer;
    • The insurer’s ultimate controlling entity (as defined by the Department) has not changed in the prior 10 years.
  • The affidavit can be filed once the criteria are met and may be renewed (i.e., refiled) every five years to maintain the exemption.
  • If, during the five‑year waiver period, the insurer ceases to meet any criterion, the insurer must:
    • Provide written notice to the Department specifying which criteria are no longer met; and
    • Appoint a Nebraska‑resident director within six calendar months.
  • The bill preserves and clarifies other director‑qualification provisions:
    • Board must have at least five directors;
    • At least one‑fifth of directors of certain insurers must be independent (not officers/employees);
    • Persons convicted of felonies may not serve as directors;
    • Directors must be of good moral character and possess appropriate professional/ business ability (including knowledge of insurance, finance, or investment);
    • For mutual or assessment associations, directors must be policyholders.

Who is affected

  • Primary beneficiaries: Nebraska‑domiciled insurance corporations (or their wholly owned affiliates) that are publicly traded, long‑domiciled (25+ years), employ >500 Nebraskans, and have stable ultimate ownership.
  • Other stakeholders: Nebraska Department of Insurance (affidavit receipt and oversight), potential Nebraska resident director candidates, policyholders and the public (governance and local representation implications).

Compliance & timeline

  • Waiver period: five years per affidavit; affidavit renewable every five years.
  • Notification and cure: insurer has six months to appoint a Nebraska resident director if criteria lapse.
  • Procedural history: Introduced Jan 16, 2025; referred Jan 21; committee hearing Feb 11; advanced to General File Feb 13; enrolled and amended (ER25) March; passed Final Reading 47–0–2 Apr 3; presented to Governor Apr 3; approved by Governor Apr 7, 2025. The original section 44‑211 was repealed and replaced as amended.

Potential effects (practical)

  • Enables certain large Nebraska‑based insurers to operate boards without a Nebraska‑resident director while requiring demonstrable, ongoing ties to the state.
  • May reduce mandatory in‑state board representation for qualifying companies, while maintaining oversight through renewal, notification, and other director qualification rules.

Compiled from official sources — confirm details with the bill’s official record.

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