§ 6605 — Organization of assessment corporations

New York § 6605

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 66: Co-operative Property/casualty Insurance Companies

Text

§ 6605. Organization of assessment corporations. (a) An assessment\ncorporation may be organized and licensed in the manner prescribed in\nsection six thousand six hundred three of this article and may do, in\naddition to the kind of insurance specified in paragraph four of\nsubsection (a) of section one thousand one hundred thirteen of this\nchapter, any one or more of the kinds of insurance specified in\nparagraphs five, six, seven and eight of such subsection solely in\nconjunction with fire insurance written under the same policy and\ncovering the same premises and insurance against loss or damage to\nproperty caused by aircraft or vehicles in compliance with the following\nprerequisites:\n (1) It shall have not less than two hundred bona fide applications for\ninsurance of such kind or kinds on real property located within the\nterritory in which it desires to be licensed as above provided, and from\nnot less than two hundred separate applicants who shall have paid\nadvance payments of estimated annual assessments of at least two\nthousand dollars for insurance aggregating not less than two hundred\nthousand dollars in each county of such territory and each member shall\nbe subject to assessments, in addition to required advance payments,\nsufficient to meet incurred losses, expenses and other legal obligations\nfor such insurer.\n (2) It shall have a cash organization fund of not less than one\nhundred fifty thousand dollars, which may be used in the manner provided\nfor in paragraph nine of subsection (a) of section one thousand two\nhundred one of this chapter, and shall maintain at all times, a surplus\nof at least one hundred thousand dollars. For an assessment corporation\nlicensed to do the kinds of insurance specified in paragraph nine of\nsubsection (a) of section one thousand one hundred thirteen of this\nchapter, except as herein provided, the corporation must maintain an\nadditional surplus of fifty thousand dollars. The additional surplus is\nnot necessary if the whole risk for this peril is reinsured in an\ninsurance company authorized to do business in this state, or in an\naccredited reinsurer, as defined in subsection (a) of section one\nhundred seven of this chapter.\n (3) Any assessment corporation licensed on the effective date of this\narticle which does not possess surplus of one hundred thousand dollars\nshall be restricted to the kinds of insurance for which it was licensed\nimmediately prior to the effective date of this article until such time\nas the required minimum surplus specified in paragraph two above is\naccumulated. In no event shall the surplus of such corporation fall\nbelow fifty thousand dollars.\n (b) (1) Any licensed assessment corporation may amend its charter and\nbe licensed to do the kinds of insurance specified in paragraphs nine,\nthirteen, fourteen and fifteen (except workers' compensation insurance)\nof subsection (a) of section one thousand one hundred thirteen of this\nchapter solely in conjunction with fire insurance written under the same\npolicy and covering the same premises, except as provided in paragraph\ntwo of this subsection, and may be licensed to do the kinds of insurance\nspecified in paragraphs twelve, nineteen (excluding aircraft physical\ndamage insurance) and twenty (inland marine only) of such subsection.\n (2) An assessment corporation licensed to write the kinds of insurance\nspecified in paragraphs thirteen and fourteen of subsection (a) of\nsection one thousand one hundred thirteen of this chapter is authorized\nto write personal or commercial umbrella liability insurance.\n (c) An assessment corporation may also be organized and licensed in\nthe manner prescribed in section six thousand six hundred three of this\narticle to do within all the counties of the state (except the counties\nof New York, Kings, Queens, Bronx and Richmond) as an assuming insurer,\nreinsurance business of a kind or kinds referred to in this section,\nand, as specified in its charter, on compliance with the following\nprerequisites:\n (1) It shall have not less than ten bona fide applications for\nreinsurance of such kind or kinds on real property located within such\ncounties, and from not less than ten separate applying assessment\ncorporations of this state providing for the payment of advance payments\nin the form of estimated annual assessments of not less than ten\nthousand dollars, and providing that each such ceding insurer shall, as\na member of such assuming insurer, be subject to additional assessments\nsufficient to meet incurred losses, expenses and other legal obligations\nfor such insurer.\n (2) It shall comply with the financial requirements set forth in\nparagraph two of subsection (a) of this section.\n (3) Such a corporation shall, pursuant to such license, do only the\nbusiness of reinsurance, and may not at any time qualify as a direct\nwriting assessment corporation.\n (d) An assessment corporation licensed to write the kinds of insurance\nspecified in paragraphs thirteen and fourteen of subsection (a) of\nsection one thousand one hundred thirteen of this chapter authorized to\nwrite personal or commercial umbrella liability insurance shall maintain\nan additional surplus of six hundred thousand dollars if the corporation\nwrites personal or commercial umbrella liability insurance.\n (e) Nothing in this section shall prohibit a licensed assessment\ncorporation from writing coverage pursuant to subsection (a) or (b) of\nthis section for any leaseholder of the premises.\n