§ 4519 — Impairment of reserves and surplus; order to make good deficiency

§ 4519. Impairment of reserves and surplus; order to make good\ndeficiency. (a) Whenever the superintendent determines that the admitted\nassets of an authorized society will be less than the sum of its\nrequired reserves, accrued liabilities, and minimum surplus within a\nperiod of five years or less, the superintendent may, in his or her\ndiscretion, require submission of reports, business plans or other\ninformation demonstrating the steps the society is taking to address the\ndeficiency and require that such society take such actions as the\nsuperintendent deems necessary and appropriate to maintain the minimum\nsurplus amount, including, but not limited to, prohibiting such society\nfrom issuing any new contracts of insurance in this state, and in the\ncase of a domestic society, from issuing any new contracts in this state\nor elsewhere.\n (b)(1) Whenever the superintendent determines that the admitted assets\nof an authorized society are less than the sum of its required reserves,\naccrued liabilities, and minimum surplus, he or she shall determine the\namount of such deficiency and issue a written requisition to such\nsociety to remove, repair or make good such deficiency within such\nperiod as he or she shall designate, not less than thirty days nor more\nthan six months from the service of such requisition, except that if he\nor she believes the interests of the certificate holders of such society\nwill best be served by extending such period of time, he or she may do\nso for such period or periods of time as he or she, in his or her\ndiscretion deems best. He or she may also prohibit such society, while\nsuch deficiency exists, from issuing any new contracts of insurance in\nthis state, and in the case of a domestic society, from issuing any new\ncontracts in this state or elsewhere. If such society shall fail or be\nunable to make good such deficiency within such period as so extended,\nthe superintendent shall proceed against such society under 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 (2) In the event that the superintendent determines that the admitted\nassets of a domestic society are less than the sum of its required\nreserves, accrued liabilities, and minimum surplus, the superintendent\nshall have the power and authority to require that the society merge or\notherwise consolidate with another willing authorized society or that\nthe society cede any individual risk or risks, in whole or in part, to a\nwilling society or life insurer.\n (c) An authorized society may assess members as described in\nsubsection (g) of section four thousand five hundred four of this\narticle only after such assessment is filed with the superintendent and\napproved by him or her, or, in the case of a foreign or alien society,\nafter approval of the insurance department of the state of domicile and\nupon notice to the superintendent. The superintendent shall have the\nauthority to prohibit any foreign or alien society that has assessed its\nmembers from issuing any new contracts of insurance in this state.\n