2019 New York Laws
ISC - Insurance
Article 61 - Reciprocal Insurers and Lloyds Underwriters
6109 - Subscriber's Operating Reserve.

§ 6109. Subscriber's operating reserve. (a) (1) Every subscriber of an
authorized  reciprocal  insurer  in  which  subscribers  are  subject to
contingent liability shall accumulate a minimum operating reserve, to be
credited to such subscriber on the books and records of such  reciprocal
insurer,  by  authorizing the attorney-in-fact to credit to such account
at the end of the fiscal year of such reciprocal insurer, an amount  not
less  than one quarter of such subscriber's underwriting earnings during
such period.
  (2) Such accumulation shall be  made  so  long  as  such  subscriber's
operating  reserve  is  less than twice the amount of annual premiums in
force.
  (3)  Notwithstanding  the  foregoing,  the  superintendent  may,  upon
application from the attorney-in-fact:
  (A) approve other methods for accumulating such subscriber's operating
reserve; or
  (B) permit the suspension of the accumulation of the operating reserve
for  a  fiscal  year  provided  that  those earnings are returned to the
subscriber in accordance with  subparagraph  (B)  of  paragraph  two  of
subsection (c) of this section.
  (b)  Any  authorized  reciprocal insurer may, pursuant to the terms of
the subscriber's agreement and to any action of its  advisory  committee
authorized   thereunder,   require   its   subscribers   to   accumulate
subscriber's operating reserves in excess of the  minimum  specified  in
subsection (a) of this section and may require a longer period of notice
for  the  withdrawal of all or any part of such reserve than that herein
specified.
  (c) (1) No subscriber shall have a secured or preferred claim  against
any  assets  of  the  reciprocal  insurer  arising out of such operating
reserve, but all assets held by such insurer shall be available for  the
payment  of  claims  of  policyholders  and creditors of such reciprocal
insurer in preference to any claim for withdrawal  by  a  subscriber  as
such.
  (2)  Any  subscriber's  operating  reserve  accumulated  by  any  such
reciprocal insurer shall be maintained at all times, except that:
  (A) a subscriber may, upon withdrawal from membership and cancellation
of all insurance contracts held by the subscriber in such  insurer,  and
after  giving  to  the  attorney-in-fact written notice of withdrawal at
least sixty days in advance, withdraw the  amount  of  the  subscriber's
operating  reserve  less  such  surrender  charges  as  may  be deducted
pursuant to the subscriber's agreement; or
  (B) where the superintendent has determined that the suspension of the
accumulation  of  the  operating  reserve  would  not  be   harmful   to
policyholders  or the people of this state, the attorney-in-fact may, in
the fiscal year following the year  for  which  the  suspension  of  the
accumulation  of  the  operating  reserve was authorized, return to each
subscriber an amount equal to the underwriting earnings that would  have
otherwise been credited to the subscriber's operating reserve.
  (3) No withdrawal shall be permitted after an order of liquidation of,
or  the  appointment  of a receiver or liquidating trustee for, any such
reciprocal insurer or, notwithstanding any other provision of law to the
contrary, where  there  is  an  authorized  control  level  event  or  a
mandatory  control  level  event  as defined in section thirteen hundred
twenty-four of this chapter.