§ 23-75-109 — Deposit for protection of subscribers

(a) (1) Corporations governed by this chapter shall at all times have on deposit through the Insurance Commissioner sums as follows: (A) If newly formed under this chapter, the sum of fifteen thousand dollars ($15,000); or (B) If formed under prior law, the sum as was required under the prior law. (2) (A) Every such corporation shall deposit through the commissioner, not later than each February 1, an amount equal to two percent (2%) of the gross subscriptions collected during the preceding calendar year until the deposit of the corporation reaches a total of fifty thousand dollars ($50,000). (B) All deposits shall be held in trust for the benefit and protection of the subscribers and participating hospitals and physicians of the corporation making the deposit. (b) (1) The deposit prescribed by this section shall be subject to withdrawal in whole or in part on the order of and as directed by the commissioner but, with his or her approval, may be invested in bonds of the United States, of any state, of any political subdivision of any state, or state warrants, which shall be assigned to the commissioner and held as provided for original deposits. (2) (A) With the approval of the commissioner, the securities may be exchanged for similar securities or cash of equal amount. (B) Interest on securities so deposited shall be payable to the corporation depositing them. (c) An unsettled final judgment, arising from transactions under its certificate of authority against such a corporation shall be a lien on the deposit prescribed by this section, subject to execution after thirty (30) days from the entry of final judgment. If the deposit is reduced thereby, it shall be replenished within ninety (90) days. (d) Upon the liquidation or dissolution of the corporation and the satisfaction of all its liabilities, any balance remaining in the deposit in the hands of the commissioner and any other assets of the insurer shall be distributed to the holders of certificates of participation in good standing at the time proceedings for the liquidation or dissolution of the corporation were commenced, prorated according to the gross amount of subscriptions which have been paid on the certificates up to the time the proceedings were commenced.

Legislative History

Acts 1959, No. 148, § 676; A.S.A. 1947, § 66-4906.