N.Y. Insurance Law § 4107: Domestic mutual companies; financial and other requirements

* § 4107. Domestic mutual companies; financial and other requirements.

(a) (1) A mutual property/casualty insurance company organized in the

manner prescribed in subsection (a) of section one thousand two hundred

one of this chapter may be licensed pursuant to subsection (e) of

section one thousand one hundred two of this chapter to write any one

kind (but only one kind except as hereinafter in this section provided)

of insurance as specified in TABLE TWO upon at least meeting the

requirements set forth therein. In this section, "initial surplus" means

the paid-in initial surplus required pursuant to subparagraph (A) of

paragraph nine of subsection (a) of section one thousand two hundred one

and subparagraph (B) of paragraph one of subsection (e) of section one

thousand one hundred two of this chapter, and "minimum surplus" means

the surplus required to be maintained unimpaired after a company is

licensed to do business.

* SPECIAL NOTE.--Notwithstanding that Chapter 585 of the Laws of 1984:

Bill sections 2, 3, 5, 6, 7, and 9 of such chapter amend provisions of

the former Insurance Law that are not possible to juxtapose at this time

due to the highly technical nature of such changes and will need future

corrective legislation to implement such provisions into the new

Insurance Law as enacted by such Chapter 367 of the Laws of 1984.

TABLE TWO

Kind of

insurance

specified

in the

following Num- Number

numbered Num- ber of

paragraphs ber Number of Insur- Minimum

of subsec- of of Sep- ance Surplus

tion (a) Mem- Appli- arate Poli- Initial to be Other

of § 1113 bers cations Risks cies Surplus Maintained Requirements

--------- ----- ------ ----- ---- ------- ---------- ------------

4 50 300 300 -- $ 300,000{1}$ 200,000{1}see note{2}

7 20 20 200 20 $ 300,000 $ 200,000 see note{3}

8 20 20 300 20 $ 150,000 $ 100,000 see note{3}

9 20 20 200 20 $ 300,000 $ 200,000 see note{3}

10 20 20 300 20 $ 150,000 $ 100,000 see note{3}

11 20 20 300 20 $ 150,000 $ 100,000 see note{3}

13 100 100 500{4} -- $ 500,000{5}$ 400,000{5}see note{6}

15 40{7} 40 2,500{7} -- $ 500,000 $ 400,000 see note{6}

30{7} 30 5,000{7} -- $ 500,000 $ 400,000 see note{6}

20{7} 20 7,500{7} -- $ 500,000 $ 400,000 see note{6}

10{7} 10 10,000{7} -- $ 500,000 $ 400,000 see note{6}

16 -- -- --- -- $1,500,000 $1,000,000

17 20 20 2,000 20 $ 750,000 $ 500,000 see note{3}

20 50 300 300 -- $1,000,000{8}$ 500,000{8}see note{9}

21 20 20{10} 200{11}-- $ 500,000 $ 500,000 see note{12}

34 20 20 200 20 $2,000,000 $1,000,000 see note {3}

Notes to TABLE TWO

{1} If licensed to write paragraph 4, no additional surplus is

required for a license to write paragraphs 5, 6, 12, 19, 20, (inland

marine only) and 34.

{2} The aggregate premiums in respect to the separate risks shall be

at least $100,000 and each applicant shall have paid one-half of the

premium payable with the balance due upon the issuance of the policy.

{3} Shall have received cash from each applicant at least equal to 1/2

of the annual premium on the policy.

{4} Not more than 5 risks from any one member.

{5} If licensed to write paragraph 13, no additional surplus is

required for a license to write paragraphs 6, 12 and 14.

{6} The aggregate annual premium cost of such insurance shall be at

least $50,000.

{7} Substitute "employers" for "members" and "employees" for "separate

risks"

{8} If licensed to write paragraph 20, no additional surplus is

required for a license to write paragraphs 12, 19, and 21.

{9} The aggregate amount of cash received for the premiums on the

policies applied for shall be at least $150,000.

{10} The 20 applications shall be from persons, firms, corporations,

associations or joint stock companies, each owning, operating or

chartering one or more vessels.

{11} Applicants shall take insurance covering in the aggregate at

least 200 vessels having an aggregate gross tonnage of at least 500,000

tons.

{12} Shall have received cash, from such applicants, on account of the

premiums on the respective policies applied for, a sum at least equal to

20 cents per ton upon such aggregate gross tonnage.

(2) A mutual property/casualty insurance company whose membership is

limited to hospitals may be organized in the manner prescribed in

subsection (a) of section one thousand two hundred one of this chapter

and may be licensed pursuant to subsection (e) of section one thousand

one hundred two of this chapter to write the kinds of insurance

specified in paragraph thirteen or fourteen of subsection (a) of section

one thousand one hundred thirteen of this chapter provided (i) it shall

have applications from at least forty members on at least forty separate

risks, (ii) the total annual premium cost shall be at least seven

hundred fifty thousand dollars, (iii) it shall have an initial surplus

of at least five hundred thousand dollars and shall maintain a surplus

of at least four hundred thousand dollars and (iv) it shall receive from

its members advances pursuant to the requirements of section one

thousand three hundred seven of this chapter averaging not less than

one-third of the average annual indicated premium, but the total thereof

shall not be less than the initial minimum surplus.

(b) If licensed to write any kind of insurance specified in TABLE TWO,

a mutual property/casualty insurance company may in addition write any

one or more of the kinds of insurance specified in Group A and/or Group

B of TABLE THREE, and if licensed to write any kind of insurance

specified in Group A, it may in addition write any one or more of the

kinds of insurance specified in Group C of TABLE THREE, in either case,

upon at least meeting the initial surplus requirement prescribed in

TABLE THREE for the kinds of insurance for which it is to be licensed.

It shall thereafter maintain the minimum surplus prescribed in TABLE

THREE for the kinds of insurance licensed.

TABLE THREE

Kind of insurance specified in the Minimum

following numbered Paragraphs of Initial{1} Surplus{1} to

subsection (a) of § 1113: Surplus be Maintained

_________________________________ _________ _____________

Group A:

7 or 9 - for each such kind $100,000 $100,000

8, 10 or 11 - for each such kind $ 50,000 $ 50,000

13,{2} 15 or 17 - for each such kind $300,000 $300,000

16 $900,000 $900,000

Group B:

4{3} $ 300,000 $200,000

20{4} $1,000,000 $500,000

Group C:

3(i) or 3(ii) - for each such kind $ 100,000 $ 100,000

22 $3,000,000 $2,000,000

24 $ 300,000 $ 300,000

26 (B) $ 300,000 $ 200,000

26(A), 26(C) or 26(D) -

for each such kind $ 900,000 $ 600,000

28 $3,000,000 $2,000,000

6{5}, 12{6} or 14{2} - for

each such kind $ 50,000 $ 50,000

27 $ 300,000 $ 150,000

30 $ 300,000 $ 300,000

31 $ 100,000 $ 100,000

32 $ 100,000 $ 100,000

33 $ 100,000 $ 100,000

Notes to TABLE THREE

{1} The amounts shown in TABLE THREE are added to the initial and

minimum surplus for the kind of insurance for which the mutual was

organized as set forth in TABLE TWO. In addition, if organized to write

paragraphs 4, 20 or 21 the initial and minimum surplus required for

paragraphs 7, 8, 9, 10, 11, 13, 15, 16 or 17 shall be determined from

TABLE TWO for the kind of insurance with the highest initial surplus

requirement as indicated in TABLE TWO. After such determination use

TABLE THREE to derive the initial and minimum surplus requirements for

all other kinds of insurance.

{2} If licensed to write paragraph 13, no additional surplus is

required for a license to write paragraphs 6, 12, and 14.

{3} If licensed to write paragraph 4, no additional surplus is

required for a license to write paragraphs 5, 6, 12, 19, 20, (inland

marine only) and 34.

{4} If licensed to write paragraph 20, no additional surplus is

required for a license to write paragraphs 12, 19, and 21.

{5} If licensed to write paragraph 4 or 13, no additional initial and

minimum surplus is required.

{6} If licensed to write paragraphs 4, 13 or 20, no additional initial

and minimum surplus is required.

(c) A mutual property/casualty insurance company licensed pursuant to

paragraph four of subsection (b) of section four thousand one hundred

two of this article to write the kind of insurance specified in

paragraph nineteen of subsection (a) of section one thousand one hundred

thirteen of this chapter must maintain a minimum surplus of at least six

hundred thousand dollars.

(d) A mutual property/casualty insurance company licensed pursuant to

subsection (c) of section four thousand one hundred two of this article

to reinsure risks or write insurance on risks outside the United States,

its territories and possessions, must maintain a surplus to

policyholders of at least thirty-five million dollars.

(e) The dollar amounts of initial surplus, minimum surplus and surplus

to policyholders set forth in subsections (a), (b) and (c) of this

section shall be reduced by fifty percent for any mutual property/

casualty insurance company initially licensed to do business in this

state prior to July first, nineteen hundred eighty-two. Such reduction

shall not apply to the financial requirements specified in subsection

(b) of this section in order to write paragraph twenty-two, twenty-four

or twenty-six.

(f) Notwithstanding any provision of this section to the contrary, if

licensed to write the kind of insurance specified in paragraph fifteen

of subsection (a) of section one thousand one hundred thirteen of this

chapter, a mutual property/casualty insurance company may be licensed

for the purposes of article nine of the workers' compensation law to

write the kind of insurance specified in item (i) of paragraph three of

subsection (a) of section one thousand one hundred thirteen of this

chapter without having any additional surplus.