§ 5509 — Guaranty fund

(a) Each mutual benefit association before receiving a certificate of authority shall deposit with the Commissioner $25,000 in cash and/or securities approved by the Commissioner.

(b) The deposit shall constitute a guaranty fund and shall remain in trust with the Commissioner to answer any default of the association.

(c) While not in default the association may collect the interest, dividends and profits upon the deposited securities and from time to time substitute therefor other securities of equally good character and value, subject to the approval of the Commissioner.

(d) The deposit shall not be withdrawn by the association except as hereinafter provided. The Commissioner may make withdrawals from the fund upon the order of any court of record of this State issued upon a final judgment to pay any claim reduced to final judgment by such court in an action by any member or beneficiary based upon a certificate of membership. In the event of such withdrawal the association shall replace the amount withdrawn within 6 months thereafter.

(e) If the association determines to discontinue its business, it shall make written application to the Commissioner for withdrawal of its guaranty fund. Within 3 months after receipt of the application, the Commissioner shall determine the financial affairs and condition of the association; and if the Commissioner finds that its books and records are in proper order and that it has no liabilities outstanding, the Commissioner shall cancel the association’s certificate of authority and deliver to the association or its assigns all moneys and/or securities then held in the deposited guaranty fund to the association’s credit.

Legislative History

18 Del. C. 1953, § 5509; 56 Del. Laws, c. 380, § 1 ; 70 Del. Laws, c. 186, § 1