§ 27-8-3-7 — Accumulation of reserve or emergency fund; investment; additional funds; use of excess

Every such life insurance corporation,
association, or society shall accumulate and maintain a reserve or
emergency fund equal to such sum as might be realized from one (1)
assessment on, or periodical payment by, policy or certificate holders
thereof, and, in no event, less than the amount of its maximum policy
or certificate. Such fund, if not already accumulated, shall be
accumulated by every such corporation, association, or society existing
on March 9, 1897, by September 9, 1897, and by every corporation,
association, or society formed under this chapter after March 9, 1897,
within six (6) months from the date of its incorporation or organization,
and shall be held as a trust fund for the purposes for which such fund
was created or accumulated. In case such fund or any portion thereof
shall have been used by the corporation, association, or society for the
purpose or purposes for which the same was created or accumulated
and the amount thereof thereby reduced to less than the amount of one
(1) death assessment or periodical payment, the amount of such
reduction below the amount of one (1) death assessment or periodical
payment shall be made up and restored to said fund within six (6)
months thereafter. Such fund may be held in cash or invested in the
same class of securities required by law for the investment of funds by
insurance corporations; and nothing contained in this chapter shall
prevent the creation and accumulation of other funds in excess of the
amount required in this chapter to provide for the purposes of such
corporation, association, or society. If such fund is in excess of the
amount of one (1) death assessment or periodical payment upon all
certificate or policyholders and not less than the sum of fifty thousand
dollars ($50,000), the excess or any portion thereof may be used in the
reduction of assessment or periodical payments by policy or certificate
holders by ratable cash dividends or credits, or in such other equitable
division or apportionment thereof as its bylaws or rules may provide,
and such use shall not be deemed or construed to mean a profit
received by members within the meaning of the statutes of this state, or
the pro rata excess on any policy or certificate terminated by death or
surrender may be refunded to the holder or beneficiary, as may be
provided for in said policy or contract; provided, that nothing contained
in this chapter shall be construed to permit any contract promising any
fixed cash payment to any living certificate or policyholder excepting
in the contingency of physical disability.
Formerly: Acts 1897, c.195, s.7. As amended by P.L.252-1985,
SEC.280.