N.Y. Insurance Law § 4109: Mutual companies; special contingent surplus

§ 4109. Mutual companies; special contingent surplus. (a) A domestic

mutual property/casualty insurance company licensed to write any of the

kinds of insurance defined respectively in the following paragraphs of

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

chapter: accident and health (item (i) of (3)), non-cancellable

disability (item (ii) of (3)), burglary and theft (7), glass (8), boiler

and machinery (9), elevator (10), animal (11), personal injury liability

(13), property damage liability (14), workers' compensation and

employers' liability (15), fidelity and surety (16) or credit (17),

shall establish on its general ledger a special contingent surplus and

shall thereafter maintain the same unimpaired so long as it is licensed

to write one or more of the foregoing kinds of insurance. An impairment

exists in the surplus of any such company at any time when the aggregate

value of its admitted assets is less than the amount of all of its

liabilities and the special contingent surplus which it is required to

maintain at such time.

(b) During each full calendar year except the first two full calendar

years next following the calendar year in which such company was

licensed to write any kind of insurance specified in subsection (a)

hereof, the amount of such contingent surplus shall exceed the required

amount thereof at last year-end, by an amount at least equal to one and

one-half percent of the net premium income received for the kinds of

insurance referred to in subsection (a) hereof during such whole

calendar year, until the amount of such contingent surplus shall be at

least equal to the amount of surplus to policyholders required under

section four thousand one hundred three of this article to be maintained

by a similar domestic stock property/casualty insurance company licensed

to do any one or more of the kinds of insurance specified in subsection

(a) hereof. Such special contingent surplus, by whatever name called,

shall be inclusive of the minimum surplus required by the provisions of

this chapter and shall be exclusive of any divisible surplus available

for the payment of dividends.

(c) No domestic mutual property/casualty insurance company shall

declare or pay any dividend to policyholders if, after the payment of

such dividend, its special contingent surplus as herein required will be

impaired. The declaration and payment of dividends by any such company

shall be subject to the provisions of section one thousand two hundred

eleven of this chapter.

(d) Any domestic mutual property/casualty insurance company shall be

authorized in any year to further increase its special contingent

surplus by an amount in excess of the annual accumulation required by

this section, and any such excess shall be credited upon the amount

which otherwise it would have been required to accumulate by the

provisions of this section in any subsequent year or years.

(e) The superintendent may refuse to issue a license or renewal

license to do an insurance business in this state to any foreign or

alien mutual property/casualty insurance company which does not comply

in substance with this section applicable to a similar domestic mutual

property/casualty insurance company licensed to write the same kind or

kinds of insurance.