§ 33-5-409 — Nonassessable Policies

33-5-409 . Nonassessable policies. (1) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock required of a domestic stock insurer authorized to transact similar kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the commissioner shall issue a certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for as long as all the surplus remains unimpaired.
(2) Upon impairment of the surplus, the commissioner shall revoke the certificate. The revocation may not make a policy subject to contingent liability if the policy is then in force and for the remainder of the period for which the premium has been paid. However, after the revocation, a policy may not be issued or renewed without providing for contingent assessment liability of the subscriber.
(3) The commissioner may not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued unless it qualifies to and does extinguish the liability of all its subscribers and in all policies for all kinds of insurance transacted by it. However, if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of those of its subscribers that may acquire the policies in that state and need not extinguish the contingent liability applicable to policies previously in force in that state.

Legislative History

En. Sec. 561, Ch. 286, L. 1959; R.C.M. 1947, 40-5024; amd. Sec. 1164, Ch. 56, L. 2009.