§ 4209 — Mutual life insurance companies, mutual accident and health insurance companies; assessments

§ 4209. Mutual life insurance companies, mutual accident and health\ninsurance companies; assessments. (a) (1) No domestic mutual life\ninsurance company shall issue any policy of life or accident and health\ninsurance or any annuity contract providing for the payment of any\nassessment by any policyholder or member in addition to the regular\npremium or consideration charged therefor; nor shall any such company\nhave power to levy or collect any such assessment.\n (2) No foreign or alien life insurance company shall do business in\nthis state if it does business anywhere on any assessment plan.\n (b) (1) Except as provided in subsection (c) hereof, every domestic\nmutual accident and health insurance company shall provide in its\npolicies that every member shall be liable for an assessment, in\naddition to the amount of premiums paid or payable, in an amount not\nexceeding the maximum named therein, which shall be not less than one\nannual premium on the policy; if the assessment liability is unlimited\nthe policy shall so provide.\n (2) If any domestic mutual accident and health insurance company does\nnot have admitted assets at least equal to the aggregate of its\nliabilities, reserves and its minimum surplus as required by this\nchapter, and if such impairment is not otherwise rectified, the board of\ndirectors of such company may, with the approval of the superintendent\nand within such time as he prescribes, order an assessment as specified\nin its by-laws for an amount which will provide sufficient funds to\nrectify such impairment, except that no member of such company shall be\nliable for an assessment exceeding the limit specified in his policy.\n (3) All such orders of assessment shall be filed with the\nsuperintendent and shall not take effect unless and until approved by\nhim. The superintendent may refuse any such approval if, in his\njudgment, such refusal will best promote the interests of the\npolicyholders and creditors of such company, and of the insuring public.\nSuch assessment shall be made upon all members liable to assessment\ntherefor in proportion to their several liabilities.\n (4) Every person who was a member of such company at any time during\ntwo years prior to the making of an order of assessment by the board of\ndirectors shall pay his proportionate part of any such assessment if he\nis notified of such assessment within one year after the making of an\norder of assessment. A member's proportionate part of any assessment\nshall be determined by applying to the premium earned on the member's\npolicy or policies during the period to be covered by the assessment the\nratio of the total assessment to the total premiums earned during such\nperiod on all policies subject to assessment.\n (c) Every mutual accident and health insurance company licensed to do\nbusiness in this state, if its charter or by-laws permit or are amended\nto permit the issuance of policies without contingent mutual liability\nof the policyholders for assessment, may with the permission of the\nsuperintendent issue non-assessable policies in this state. Every such\ncompany shall submit a copy of its proposed non-assessable policy or\npolicies for approval of the superintendent, and shall have obtained his\napproval thereof. Every policy issued by any such company shall clearly\nstate whether or not the holder of such policy is subject to a liability\nfor assessment.\n (d) (1) Any foreign mutual accident and health insurance company which\ncomplies with the requirements of subsection (c) hereof for the issuance\nof non-assessable policies may do an insurance business in this state\nwithout complying with the requirements of subsection (b) hereof.\n (2) No such company which does not comply with the requirements of\nsubsection (c) hereof shall do an insurance business in this state\nunless its by-laws and its policies issued in this state contain\nprovisions for the levying and collection of assessments upon members,\nat least for the payment of losses and expenses, which conform in\nsubstance to the requirements of subsection (b) hereof.\n