2019 New York Laws
ISC - Insurance
Article 61 - 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.