2013 New York Consolidated Laws
ISC - Insurance
Article 41 - (4101 - 4121) PROPERTY/CASUALTY INSURANCE COMPANIES
4109 - Mutual companies; special contingent surplus.

 
    §  4109.  Mutual companies; special contingent surplus. (a) A domestic
  mutual property/casualty insurance company licensed to write any of  the
  kinds  of  insurance defined respectively in the following paragraphs of
  subsection (a) of section one thousand  one  hundred  thirteen  of  this
  chapter:   accident  and  health  (item  (i)  of  (3)),  non-cancellable
  disability (item (ii) of (3)), burglary and theft (7), glass (8), boiler
  and machinery (9), elevator (10), animal (11), personal injury liability
  (13),  property  damage  liability  (14),  workers'   compensation   and
  employers'  liability  (15),  fidelity  and  surety (16) or credit (17),
  shall establish on its general ledger a special contingent  surplus  and
  shall  thereafter maintain the same unimpaired so long as it is licensed
  to write one or more of the foregoing kinds of insurance. An  impairment
  exists in the surplus of any such company at any time when the aggregate
  value  of  its  admitted  assets  is  less than the amount of all of its
  liabilities and the special contingent surplus which it is  required  to
  maintain at such time.
    (b)  During each full calendar year except the first two full calendar
  years next following  the  calendar  year  in  which  such  company  was
  licensed  to  write  any  kind  of insurance specified in subsection (a)
  hereof, the amount of such contingent surplus shall exceed the  required
  amount  thereof at last year-end, by an amount at least equal to one and
  one-half percent of the net premium income received  for  the  kinds  of
  insurance  referred  to  in  subsection  (a)  hereof  during  such whole
  calendar year, until the amount of such contingent surplus shall  be  at
  least  equal  to  the  amount of surplus to policyholders required under
  section four thousand one hundred three of this article to be maintained
  by a similar domestic stock property/casualty insurance company licensed
  to do any one or more of the kinds of insurance specified in  subsection
  (a)  hereof.  Such  special contingent surplus, by whatever name called,
  shall be inclusive of the minimum surplus required by the provisions  of
  this  chapter  and shall be exclusive of any divisible surplus available
  for the payment of dividends.
    (c) No  domestic  mutual  property/casualty  insurance  company  shall
  declare  or  pay  any dividend to policyholders if, after the payment of
  such dividend, its special contingent surplus as herein required will be
  impaired.  The declaration and payment of dividends by any such  company
  shall  be  subject to the provisions of section one thousand two hundred
  eleven of this chapter.
    (d) Any domestic mutual property/casualty insurance company  shall  be
  authorized  in  any  year  to  further  increase  its special contingent
  surplus by an amount in excess of the annual  accumulation  required  by
  this  section,  and  any  such  excess shall be credited upon the amount
  which otherwise it  would  have  been  required  to  accumulate  by  the
  provisions of this section in any subsequent year or years.
    (e)  The  superintendent  may  refuse  to  issue  a license or renewal
  license to do an insurance business in this  state  to  any  foreign  or
  alien  mutual  property/casualty insurance company which does not comply
  in substance with this section applicable to a similar  domestic  mutual
  property/casualty  insurance  company licensed to write the same kind or
  kinds of insurance.