2020 New York Laws
ISC - Insurance
Article 41 - Property/casualty Insurance Companies
4111 - Mutual Companies; Assessments.

§  4111.    Mutual  companies;  assessments. (a) Except as provided in
section four thousand  one  hundred  thirteen  of  this  article,  every
domestic mutual property/casualty insurance company shall in its by-laws
and  policies  prescribe  the contingent mutual liability of its members
for the payment of assessments, in such a way that each member shall  be
liable   to  pay  the  member's  proportionate  share,  subject  to  the
limitations hereinafter specified, of the amount of  any  assessment  or
assessments  permitted  for  any  purpose  under  any provisions of this
chapter or necessary to make good an impairment of the  minimum  surplus
of  such company. The contingent liability of a member may be limited to
an amount not less than one additional annual  premium  on  each  policy
held by a member. The aggregate amount of all assessments whether levied
by  the  board  of directors of such insurer or by the superintendent as
liquidator or rehabilitator of the insurer, or otherwise,  shall  be  no
greater  amount than that specified in the by-laws and policies.  Except
as provided in section  four  thousand  one  hundred  thirteen  of  this
article,  no  such  insurance  company  shall make, issue or deliver any
policy of insurance, which does not prescribe the  contingent  liability
of  the  policyholder in clear and explicit language printed in type not
smaller than eight point.
  (b) If any domestic mutual property/casualty  insurance  company  does
not  have  admitted  assets at least equal in amount to the aggregate of
its liabilities and its minimum surplus as required by the provisions of
this chapter, and if such impairment is not  otherwise  made  good,  the
board  of  directors  of  the  company  may,  with  the  approval of the
superintendent  and  within  such  time  as  he  prescribes,  order   an
assessment  in  the  manner specified in the by-laws for an amount which
will provide sufficient funds to make good the impairment,  except  that
no  member  shall  be  liable  for  an  assessment  exceeding  the limit
specified in his policy in accordance with subsection (a) hereof.    All
orders  of assessment made by the board of directors shall be filed with
the superintendent and shall not take effect unless and  until  approved
by  him.  The  superintendent  may  refuse  any such approval if, in his
judgment, refusal will best promote the interests of  the  policyholders
and  creditors  of  the  company,  and  of  the insuring public.   Every
assessment shall be made upon all members liable to assessment  therefor
in   the   proportion  hereinafter  specified.  Every  person,  firm  or
corporation who or which was a member of such company at any time during
one year prior to the making of an order of assessment by the  board  of
directors   shall   be   liable  to  pay  and  shall  pay  the  member's
proportionate share of any assessment which may be  made  in  accordance
with  law,  if  the member is notified of the assessment within one year
after making of an order of assessment. A member's proportionate part of
any assessment shall be determined by applying to the premium earned  on
the  member's  policy  or  policies in force during a period of one year
next preceding the order of assessment the ratio of the total assessment
to the total premiums earned during such period on all policies  subject
to assessment.
  (c)  Unless  specifically authorized by the provisions of this chapter
to issue non-assessable  policies  in  this  state,  no  foreign  mutual
property/casualty   insurance   company  shall  be  or  continue  to  be
authorized to do business in this state unless its by-laws and  policies
issued  in  this state contain provisions for the levying and collection
of assessments upon members, at least for  the  payment  of  losses  and
expenses, which conform in substance to subsection (b) hereof.
  (d)  In  the  case  of  a  mutual  property/casualty insurance company
subject to paragraph two of subsection (a) of section four thousand  one
hundred  seven of this article, an assessment authorized by this section

shall be made when, in  addition  to  the  grounds  set  forth  in  this
section,  if  the  ratio  of  net premium writings to surplus as regards
policyholders is four to one or greater,  based  upon  the  last  annual
statement  or  any  quarterly  statement  projected  on an annual basis,
subject to the approval of the superintendent, and if, at any time, upon
examination, the superintendent determines that an assessment should  be
made   pursuant   to  subsection  (b)  hereof  or  this  subsection  the
superintendent shall make an appropriate order that  the  assessment  be
made.