§ 44 — Failure of domestic company to timely commence business; organization under special act; withdrawal from insurance business and continuance as business corporation

Massachusetts § 44

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title XXII: CORPORATIONS
• Ch. 175: INSURANCE

Text

Section 44. If any domestic company shall not commence to issue policies within one year after the date of its charter or of its certificate of organization, or if after it has commenced to issue policies it shall cease for the period of one year to make new insurance, its corporate powers shall thereby expire; and the supreme judicial court, upon petition of the commissioner or of any person interested, may fix by decree the time within which it shall settle and close its affairs. A company incorporated by special act shall, within one year after the date thereof, file with the state secretary a written notice of its organization under its charter, or the same shall be void.Nothing in this section shall prevent a domestic stock company, after giving sixty days' notice to the commissioner of its intent and satisfying him that its insurance contract obligations will be fully assumed by a solvent company, from reinsuring all its outstanding risks and claims under policies issued by it with another such company authorized to issue policies in the commonwealth covering risks of the same kinds as those reinsured or with a company incorporated or formed to reinsure and authorized to reinsure in the commonwealth risks of the same kinds as those reinsured, and any such domestic stock company which is not insolvent, the commissioner having approved the assumption of its insurance contract obligations, may then elect to continue as a corporation subject to the business corporation laws by filing with the state secretary articles of amendment, as provided in section seventy-two of chapter one hundred and fifty-six B, stating the purposes for which the corporation will continue and the nature of the business to be transacted and any other changes in its articles of organization. If the state secretary finds that the change is made in conformity to law, he shall endorse his approval thereon, and thereafter the corporation shall be authorized to continue and to carry on business under its amended powers, and its corporate powers under this chapter shall thereupon expire. Thereafter the name of said corporation shall not contain the word ''insurance'' or ''assurance.''Any such corporation reinsuring its insurance contract and claim obligations as provided in this section shall establish, if so requested by the commissioner of insurance, a contingency fund in trust of sufficient amount as may be deemed necessary by said commissioner to assure a full discharge of all such obligations, and the funds in such trust shall be increased or decreased by such corporation in accordance with the experience as determined by the commissioner on such reinsured obligations, and any such funds not needed for the purposes of the trust, as determined by the commissioner, shall revert to such corporation. If the funds deemed necessary by the commissioner are not forthcoming from such corporation, then the assuming corporation shall transfer to the trust fund any such required funds, and any of such funds not needed for the purposes of the trust, as determined by the commissioner, shall revert to such assuming corporation. Any such trust fund shall be subject to examination by the commissioner and shall be invested in accordance with the investment requirements of section sixty-three as if it were capital of any domestic company other than life, or as if it were the reserve of a domestic stock life company, depending on the kind of such corporation which assumes the risk as provided in the second paragraph of this section.A corporation shall continue to be liable on all of its obligations including those subject to reinsurance as provided in this section, and shall have the right to prosecute and defend suits by or against it, and to hold and to dispose of and convey its property without in any way being limited by the change in the purposes for which such corporation was formed and the nature of the business to be transacted by it.