§ 1311 — Impairment of a mutual or reciprocal insurer

§ 1311. Impairment of a mutual or reciprocal insurer. (a) In this\nsection "required surplus" includes any guaranty surplus or special\ncontingent surplus or other specifically reserved surplus account of a\ndomestic mutual insurer, a domestic reciprocal insurer or any other\ndomestic insurer without capital stock, required by the provisions of\nthis chapter to be maintained for any purpose, including: (i) issuance\nof non-assessable policies, (ii) payment of dividends, or (iii)\ntransaction of business after a license has been issued by the\nsuperintendent.\n (b) Whenever the superintendent finds from a financial statement or\nreport on examination that the total admitted assets of any insurer\nrequired to maintain such required surplus are less than the aggregate\namount of its liabilities and required surplus, he shall determine the\namount of such impairment and order the insurer or its attorney-in-fact\nto eliminate such impairment within such period he designates, not\nexceeding ninety days from service of such order. He may also by order\nprohibit such insurer, while such impairment exists, from:\n (1) issuing any non-assessable policies if its required surplus for\nthe purpose of item (i) of subsection (a) hereof is impaired, or\n (2) paying dividends if its required surplus for the purpose of item\n(ii) of subsection (a) hereof is impaired, or\n (3) issuing new policies if its minimum surplus for the purpose of\nitem (iii) of subsection (a) hereof is impaired.\n (c) If the impairment so determined is such that such insurer does not\nhave the minimum surplus required for item (iii) of subsection (a)\nhereof, and if when such designated period expires the insurer has not\nsatisfied the superintendent that such impairment has been eliminated,\nthe superintendent may proceed against such insurer pursuant to the\nprovisions of article seventy-four of this chapter on the ground that\nits further transaction of business will be hazardous to its\npolicyholders, its creditors or the public.\n (d) If the required minimum surplus of any authorized foreign mutual\nor reciprocal insurer is found by the superintendent to be impaired, the\nsuperintendent may order such insurer not to issue during such time as\nhe prescribes any new policies in this state, and may, after notice and\nhearing, revoke its license to do business in this state.\n