(Section scheduled to be repealed on January 1, 2027) Sec. 34. Procedure when insufficient assets possessed by company.
(1)Whenever the Director finds that the admitted assets of any company subject to the provisions of this Article are less than its capital, minimum required surplus and all liabilities, he or she must give written notice to the company of the amount of the impairment and require that the impairment be removed within such period, which must be not less than 30 nor more than 90 days from the date of the notice, as he or she may designate. Unless otherwise allowed by the Director, the company must discontinue the issuance of new and renewal policies while the impairment exists.
(2)Upon the receipt of the notice from the Director, the board of directors of the company must
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(Section scheduled to be repealed on January 1, 2027) Sec. 34. Procedure when insufficient assets possessed by company. (1) Whenever the Director finds that the admitted assets of any company subject to the provisions of this Article are less than its capital, minimum required surplus and all liabilities, he or she must give written notice to the company of the amount of the impairment and require that the impairment be removed within such period, which must be not less than 30 nor more than 90 days from the date of the notice, as he or she may designate. Unless otherwise allowed by the Director, the company must discontinue the issuance of new and renewal policies while the impairment exists. (2) Upon the receipt of the notice from the Director, the board of directors of the company must cause the impairment to be removed and call upon its shareholders ratably for the necessary amount to remove the impairment, or, by proper action, reduce its capital to meet the impairment providing the reduced capital is not less than the minimum requirements fixed by this Code or by other means remove the impairment. If the impairment is not removed within the period of time designated, the Director may order the board of directors to call upon its shareholders ratably. If a shareholder of the company refuses or neglects to pay the amount so called for after notice, given personally or by mail, by a date stated in the notice not less than 15 days from the date of such notice, the Director may order the board of directors to declare, by resolution, the shares of such person cancelled, and in lieu thereof may issue new certificates for shares and dispose of the same at the best price obtainable not less than par. If the amount received for such new certificates for shares exceeds the amount required to be paid by such shareholder, the excess must be paid to the shareholder so refusing to pay his or her ratable share of the impairment. Nothing contained in this subsection may be construed to impose any liability on any shareholder as a result of any call, enforceable in any manner other than through a sale of his or her shares as provided in this subsection. (3) If the impairment is not removed within the period specified in the Director's notice, the company shall be deemed insolvent and the Director shall proceed against the company in accordance with Article XIII. (4) If while the impairment exists any officer or director of the company knowingly renews, issues or delivers or causes to be renewed, issued or delivered any policy, contract or certificate of insurance unless allowed by the Director, and the fact of such impairment is known to the officer or director of the company, such officer or director shall be guilty of a business offense and may be fined not less than $200 and not more than $5,000 for each offense. (5) Nothing in this Section prohibits, while such impairment exists, any such officer, director, trustee, agent or employee from issuing or renewing a policy of insurance when an insured or owner exercises an option granted to him or her under an existing policy to obtain new, renewed or converted insurance coverage.