§ 58-5A-100 — Deposit or bond required for insurer in hazardous financial condition.

If an insurer subject to this chapter is deemed by the director to be in a hazardous financial condition, as defined by chapters 58-4 and 58-29B , or a condition that would be grounds for supervision, conservation, or a delinquency proceeding, then the director may require the insurer to secure and maintain either a deposit held by the director, or a bond, for the protection of the insurer for the duration of contracts or agreements or the existence of the condition for which the director required the deposit or the bond. In determining whether a deposit or a bond is required, the director may consider whether concerns exist with respect to the affiliated person’s ability to fulfill the contracts or agreements if the insurer were to be put into liquidation. Once the insurer is deemed to be in a hazardous financial condition or a condition that would be grounds for supervision, conservation, or a delinquency proceeding and a deposit or bond is necessary, the director has discretion to determine the amount of the deposit or bond, not to exceed the value of the contracts or agreements in any one year, and whether the deposit or bond is required for a single contract, multiple contracts, or a contract only with a specific person or persons.

Legislative History

SL 2024, ch 201, § 13.