§ 33-3-412 — Levy Of Contingent Liability

33-3-412 . Levy of contingent liability. (1) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it by this code for authority to transact the kinds of insurance being transacted and the deficiency is not cured from other sources, its directors shall levy an assessment only upon its members who held policies providing for contingent liability at any time within the 12 months preceding the date notice of the assessment was mailed to them, and the members are liable to the insurer for the amount assessed.
(2) The assessment must be for an amount that is required to cure the deficiency and to provide a reasonable amount of working funds in excess of the minimum amount of surplus, but the working funds provided may not exceed 5% of the insurer's liabilities as of the date that the amount of the deficiency was determined.
(3) In levying an assessment upon a policy providing for contingent liability, the assessment must be computed on the basis of the premiums earned on the policy during the period to which the assessment relates.
(4) A member may not have an offset against any assessment for which the member is liable on account of any claim for unearned premium or loss payable.
(5) As to life insurance, any part of an assessment upon a member that remains unpaid following notice of assessment, demand for payment, and lapse of a reasonable waiting period as specified in the notice may, if approved by the commissioner as being in the best interests of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.

Legislative History

En. Sec. 447, Ch. 286, L. 1959; R.C.M. 1947, 40-4730; amd. Sec. 1139, Ch. 56, L. 2009.