2013 New York Consolidated Laws
ISC - Insurance
Article 61 - (6101 - 6116) RECIPROCAL INSURERS AND LLOYDS UNDERWRITERS
6108 - Contingent liability; non-assessable policies.

 
    §  6108.  Contingent  liability;  non-assessable  policies.  (a) Every
  contract of insurance and  subscriber's  agreement  under  or  by  which
  contracts  of  insurance  are  issued  or  exchanged  by  any authorized
  reciprocal insurer shall provide for a contingent several liability  for
  assessment  of  the subscriber as an inter-insurer on the risks of every
  other subscriber in an amount not less than one nor more than ten  times
  the  annual  premium  and in addition to the annual premium expressed in
  such contracts of insurance issued to the subscriber by  the  reciprocal
  insurer.
    (b)  If  the  admitted  assets  of  any  such  insurer are at any time
  insufficient for the payment of losses and expenses after providing  for
  all  other  liabilities  of  such  insurer  and  the  minimum surplus to
  policyholders required by this chapter, the  advisory  committee  shall,
  within  thirty  days  thereafter,  order  an  assessment  for the amount
  necessary  to  pay  such  losses  and  expenses,   and   authorize   the
  attorney-in-fact  to  collect from each subscriber liable therefor a pro
  rata share of the amount  of  such  assessment,  subject  to  the  limit
  specified  in  the contract of such subscriber and to maintain an action
  therefor in the name of the attorney-in-fact.
    (c) Every policy issued  by  any  such  insurer  shall  clearly  state
  whether  or  not  the  holder  of the policy is subject to liability for
  assessment. All policies issued by any such insurer which are subject to
  liability  for  assessment  shall  contain  a  clear  statement  of  the
  liability  of  the  policyholder for payment of a proportionate share of
  any deficiency or  impairment  as  provided  by  law  within  the  limit
  provided  by  the  policy,  and  shall further state that any assessment
  shall be for the exclusive benefit of holders of policies which  provide
  for  such a contingent liability, and the holders of policies subject to
  assessment shall not be liable to assessment in  an  amount  greater  in
  proportion  to  the  total deficiency than the ratio that the deficiency
  attributable to the assessable business bears to the total deficiency.
    (d) Any reciprocal insurer,  except  a  municipal  reciprocal  insurer
  which  issues  policies  not  covered by the property/casualty insurance
  security fund, may with  the  permission  of  the  superintendent  issue
  non-assessable policies or agreements in this state upon compliance with
  the following requirements:
    (1)  It  shall  have  and maintain a surplus to policyholders at least
  equal to  one  hundred  fifty  percent  of  the  amount  of  surplus  to
  policyholders  which  such  insurer  is  required  to  maintain  by  the
  provisions of section six thousand one hundred two of this article. Such
  surplus shall be inclusive of any surplus required by any other sections
  of this chapter.
    (2) It shall have submitted a  copy  of  its  proposed  non-assessable
  policy  or  policies  for approval of the superintendent, and shall have
  obtained his approval thereof.