§ 26.1-03-06 — Life insurance company may maintain contingency reserve - Limitations

Any life insurance company doing business in this state may accumulate and maintain, in
addition to the capital and surplus contributed by its stockholders and in addition to an amount
equal to the net values of its policies computed according to the laws of the jurisdiction under
which it is organized, a contingency reserve not exceeding the following respective percentages
of the net values:
1. When the net values are less than one hundred thousand dollars, twenty percent
thereof or the sum of ten thousand dollars, whichever is the greater.
2. When the net values are greater than one hundred thousand dollars, the percentage
thereof measuring the contingency reserve decreases one-half of one percent for each
one hundred thousand dollars of the net values up to one million dollars and may
include one-half of one percent for each additional one million dollars up to ten million
dollars.
3. If the net values equal or exceed the last mentioned amount, the contingency reserve
may not exceed ten percent thereof.
As the net values of the policies increase and the maximum percentage measuring the
contingency reserve decreases, the company may maintain the contingency reserve already
accumulated, although for the time being, it may exceed the maximum percentage herein
prescribed. The company, however, may not add to the contingency reserve when the addition
will bring it beyond the maximum percentage prescribed in this section. For cause shown, the
commissioner may permit a company to accumulate and maintain a contingency reserve in
excess of the limit specified in this section for a prescribed period, not exceeding one year
under any one permission, by filing in the commissioner's office a decision stating the reasons
therefor and causing the same to be published in the commissioner's next annual report. This
section does not apply to any company doing exclusively a nonparticipating business.