Title 26 Insurance Code

26-24-136. Levy of contingent liability.

(a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it under this code for authority to transact the kinds of insurance being transacted, and the deficiency is not secured from other sources, its directors, if approved by the commissioner, may levy an assessment only on its members who held policies providing for contingent liability at any time within the twelve (12) months immediately preceding the date the board of directors authorized the levy. Those members are liable to the insurer for the amount assessed. (b) The levy of assessment shall be for the amount, subject to the commissioner's approval, required to cure the deficiency and to provide a reasonable amount of working funds above the minimum amount of surplus. The working funds shall not exceed five percent (5%) of the sum of the insurer's liabilities and the minimum required surplus as of the date of the levy. (c) The assessment shall be computed upon a reasonable basis the commissioner approves in writing in advance of the levy. (d) No member has an offset against any assessment for which he is liable, because of any claim for unearned premium or loss payable. (e) As to life insurance, any part of an assessment upon a member which remains unpaid following notice of assessment, demand for payment and lapse of a reasonable waiting period as specified in the notice, if approved by the commissioner as being in the best interests of the insurer and its members, may be secured by placing a lien upon the cash surrender values and accumulated dividends held by the insurer to the credit of the member.