District of Columbia § 31-4434 Power of mutual company to borrow or assume liability.

District of Columbia Statutes

§ 31-4434 — Power of mutual company to borrow or assume liability.

District of Columbia·Title 31 Insurance and Securities.·Ch. 44 Domestic Life Companies.

(1)In addition to the general power and authority to borrow money for its regular business purposes, if a domestic insurance company obtains prior written approval for a stated maximum amount, it may borrow money by the issuance of notes to:

(A)Pay the reasonable expenses of its organization;

(B)Provide contingency loss funds;

(C)Provide additional surplus funds;

(D)Satisfy a deficiency; or

(E)Provide the amount of required minimum surplus.

(2)The notes issued for the purposes stated in paragraph (1) of this subsection shall be known as surplus notes and shall fully recite the purpose for which the money was borrowed. The amount of the outstanding principal and unpaid interest of the surplus notes shall be stated in each annual report.

(b)The principa

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(1) In addition to the general power and authority to borrow money for its regular business purposes, if a domestic insurance company obtains prior written approval for a stated maximum amount, it may borrow money by the issuance of notes to:

(A) Pay the reasonable expenses of its organization;

(B) Provide contingency loss funds;

(C) Provide additional surplus funds;

(D) Satisfy a deficiency; or

(E) Provide the amount of required minimum surplus.

(2) The notes issued for the purposes stated in paragraph (1) of this subsection shall be known as surplus notes and shall fully recite the purpose for which the money was borrowed. The amount of the outstanding principal and unpaid interest of the surplus notes shall be stated in each annual report.

(b) The principal indebtedness of surplus notes issued on or after October 21, 2000, shall not be a liability or claim against any of the assets of the company. The principal of, and interest on, the notes may be paid from time to time, either in full or in part, from available surplus funds of the company only if the amount of the surplus of the company is twice the amount of principal and interest being paid. The company may make such payments whenever it is able to do so if it receives the prior written approval of the Commissioner. The Commissioner shall use the standards set forth in subchapter I of Chapter 7 of this title , relating to adequacy of surplus in determining whether or not to approve the payments. Upon a dissolution of the company, the principal and accrued and unpaid interest of the surplus notes shall be payable from surplus.

District of Columbia § 31-4434 (Power of mutual company to borrow or assume liability.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Legislative History

June 19, 1934, 48 Stat. 1152, ch. 672, ch. III, § 34; May 21, 1997, D.C. Law 11-268, § 10(k), 44 DCR 1730; Oct. 21, 2000, D.C. Law 13-189, § 2, 47 DCR 7077; June 19, 2001, D.C. Law 13-313, § 13, 48 DCR 1873