Colorado § 10-12-105 Guaranty fund of mutual companies

Colorado Statutes

§ 10-12-105 — Guaranty fund of mutual companies

Colorado·Title 10 Insurance·Art. Mutual Insurance

(1)Guaranty fund certificates may be issued to provide a guaranty fund for domestic life and fire insurance companies incorporated upon the mutual plan and for domestic casualty insurance associations incorporated upon the assessment plan, such fund to be held as security for the payment of all losses and other policy liabilities of such companies. Guaranty fund certificates may draw interest or dividends not exceeding in the aggregate eight percent per annum, which shall only be paid from the profits of the company. The certificates may only be retired or redeemed by using the profits of the company for that purpose, but the full fund as required of each kind of mutual and assessment company by this title (except article 15), and article 14 of title 24, C.R.S., shall at all tim

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(1) Guaranty fund
certificates may be issued to provide a guaranty fund for domestic life and fire
insurance companies incorporated upon the mutual plan and for domestic casualty
insurance associations incorporated upon the assessment plan, such fund to be
held as security for the payment of all losses and other policy liabilities of such
companies. Guaranty fund certificates may draw interest or dividends not
exceeding in the aggregate eight percent per annum, which shall only be paid from
the profits of the company. The certificates may only be retired or redeemed by
using the profits of the company for that purpose, but the full fund as required of
each kind of mutual and assessment company by this title (except article 15), and
article 14 of title 24, C.R.S., shall at all times be maintained. Such guaranty fund
shall be a liability until redeemed or retired. It shall only be used to pay policy
claims or liabilities when the contingent mutual liability of the policyholders has
been drawn upon and found insufficient to meet the losses of policy claims or when
the directors for any cause fail to provide for the payment of policy claims.

(2) Upon satisfying himself of such failure, the commissioner shall suspend
the certificate of authority of such company and apply to the district court for an
order restraining said company from doing further business; and the court may
appoint a receiver or issue such decrees and orders as may best serve the interests
of the members or policyholders and of the public; and the disbursement or
distribution of the guaranty fund shall then be made under the court's direction; but
the fund shall first be used to pay policy claims or losses, and, if any of the fund
then remains, it shall be used to pay creditors, if any, and the then remaining portion
of the fund shall be used to redeem outstanding guaranty fund certificates, or, if
none are outstanding, it shall be distributed among the members of the company as
the court may direct. The profits of a domestic mutual insurance company or
association are that portion of its cash funds not required for the payment of losses
and expenses and not set apart for the unearned premium reserve or any other
purpose required by law.

Colorado § 10-12-105 (Guaranty fund of mutual companies) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Legislative History

Source: L. 13: p. 361, � 63. C.L. � 2536. CSA: C. 87, � 80. CRS 53: � 72-5-5. C.R.S. 1963: � 72-5-5. L. 92: (1) amended, p. 1573, � 97, effective May 20. L. 2004: (1) amended, p. 903, � 23, effective May 21. L. 2012: (1) amended, (HB 12-1266), ch. 280, p. 1508, � 38, effective July 1.