§ 13

(Section scheduled to be repealed on January 1, 2027) Sec. 13. Minimum capital and surplus requirements. (1) A company organized after December 31, 1985 under this Article must have and at all times maintain a paid-up capital of not less than the minimum capital requirement applicable to the class or classes and clause or clauses of section 4 describing the kind or kinds of insurance which it is authorized to write, as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $1,000,000; more than one clause, $1,000,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j) $1,000,000; more than one clause, $1,000,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l) or Class 3, any or all clauses or any combination thereof, $400,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $1,000,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $100,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. Any company organized prior to January 1, 1986 and regulated under this Article must have and at all times maintain paid-up capital of not less than the minimum capital that was required for that particular company at the time it was organized, unless any clause or clauses have been added. If any clause or clauses have been added, then such company must have and at all times maintain paid-up capital of not less than the minimum capital requirement applicable to the class or classes and clause or clauses of Section 4 at the time that the additional clause or clauses are authorized. (2) A company organized after December 31, 1985 under this Article must have at the time its Certificate of Authority is issued by the Director paid-in surplus of not less than the minimum paid-in surplus requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which it is authorized to write, as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $1,000,000; more than one clause, $1,000,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $1,000,000; more than one clause, $1,000,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $600,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $1,000,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $150,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. (3) Any company organized after December 31, 1985 under this Article must have and at all times maintain, in addition to the minimum capital required by paragraph (1) of this Section, minimum surplus requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which it is authorized to write, as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $500,000; more than one clause, $500,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $500,000; more than one clause, $500,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $300,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $500,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $50,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. (4) Any company organized prior to January 1, 1986 and regulated under this Article, in addition to the minimum capital which is required by paragraph (1) of this Section, must have and at all times maintain until December 31, 1986, minimum surplus of $300,000; and on December 31, 1986 and thereafter such company must have and maintain at all times, surplus of no less than the following amounts: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $500,000; more than one clause, $500,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $500,000; more than one clause, $500,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $300,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $500,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $50,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. (5) Any company organized prior to January 1, 1986 and regulated under this Article must have on December 31, 1990 and thereafter maintain until December 31, 1995 the greater of (a) minimum capital required by paragraph (1) of this Section plus the surplus required to be maintained after December 31, 1986 by paragraph (4) of this Section; or (b) combined capital and surplus of not less than the minimum requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which it is authorized to write as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $1,200,000; more than one clause, $1,200,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $1,200,000; more than one clause, $1,200,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $600,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $1,200,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $100,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. (6) Any company organized prior to January 1, 1986 and regulated under this Article must have on December 31, 1995 and thereafter maintain at all times combined capital and surplus of not less than the minimum requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which it is authorized to write as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $1,500,000; more than one clause, $1,500,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $1,500,000; more than one clause, $1,500,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $700,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $1,500,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $150,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. (7) Any company organized prior to January 1, 1986 and regulated under this Article experiencing a change in control, as control is defined in Section 131.1(b) of this Code, must have simultaneously with the change in control and thereafter maintain at all times combined capital and surplus of not less than the minimum requirement applicable to the class or classes and clause or clauses of Section 4 describing the kind or kinds of insurance which it is authorized to write as follows: Life, Accident, Health and Legal Expense (a) Class 1, Clauses (a), (b) or (c), $1,500,000; more than one clause, $1,500,000. Casualty, Fidelity and Surety (b) Class 2, Clauses (a), (b), (c), (d), (g), (h), (i) or (j), $1,500,000; more than one clause, $1,500,000. Fire, Marine and Legal Expense (c) Class 2, Clauses (e), (f), (k), (l), or Class 3, any or all clauses or any combination thereof, $700,000. Multiple Line (d) Class 2, any or all clauses other than those specified in (c) above, and Class 3, any or all clauses, $1,500,000. Glass and Livestock and Domestic Animals (e) Class 2, Clause (f) only or (k) only, $150,000; provided any company to which this subparagraph is applicable shall not expose itself to any loss on any one risk in an amount exceeding $5,000. Notwithstanding, the foregoing provisions of this paragraph (7), any company which experiences a change in control, as control is defined in Section 131.1(b) of this Code, by reason of any laws of descent, distribution or probate, shall be exempt from the requirements of this paragraph (7) for a period of 2 years following the date of death or incompetency giving rise to the change in control. (8) Any company organized prior to September 10, 1971 or converted from a mutual company to a stock company between July 1, 1983 and June 30, 1985, which had less than $1,000,000 capital and surplus on January 1, 1986, and whose authority is limited to Class 2 of Section 4 of this Code and which is regulated under this Article, shall be exempt from the requirements of paragraphs (5) and (6) of this Section. (9) The Director shall take action under Section 34 of this Code against any company which fails to maintain the minimum surplus required by this Section. The words "minimum surplus" mean the net total of the following accounts, where applicable, as they appear in the annual statement of a stock company on the usual and proper annual statement form prescribed by the National Association of Insurance Commissioners: paid-in surplus; contributed surplus; unassigned or earned surplus; and special surplus.

Legislative History

(Source: P.A. 87-315 .)