N.Y. Insurance Law § 4209: Mutual life insurance companies, mutual accident and health insurance companies; assessments

§ 4209. Mutual life insurance companies, mutual accident and health

insurance companies; assessments. (a) (1) No domestic mutual life

insurance company shall issue any policy of life or accident and health

insurance or any annuity contract providing for the payment of any

assessment by any policyholder or member in addition to the regular

premium or consideration charged therefor; nor shall any such company

have power to levy or collect any such assessment.

(2) No foreign or alien life insurance company shall do business in

this state if it does business anywhere on any assessment plan.

(b) (1) Except as provided in subsection (c) hereof, every domestic

mutual accident and health insurance company shall provide in its

policies that every member shall be liable for an assessment, in

addition to the amount of premiums paid or payable, in an amount not

exceeding the maximum named therein, which shall be not less than one

annual premium on the policy; if the assessment liability is unlimited

the policy shall so provide.

(2) If any domestic mutual accident and health insurance company does

not have admitted assets at least equal to the aggregate of its

liabilities, reserves and its minimum surplus as required by this

chapter, and if such impairment is not otherwise rectified, the board of

directors of such company may, with the approval of the superintendent

and within such time as he prescribes, order an assessment as specified

in its by-laws for an amount which will provide sufficient funds to

rectify such impairment, except that no member of such company shall be

liable for an assessment exceeding the limit specified in his policy.

(3) All such orders of assessment 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, such refusal will best promote the interests of the

policyholders and creditors of such company, and of the insuring public.

Such assessment shall be made upon all members liable to assessment

therefor in proportion to their several liabilities.

(4) Every person who was a member of such company at any time during

two years prior to the making of an order of assessment by the board of

directors shall pay his proportionate part of any such assessment if he

is notified of such assessment within one year after the 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 during the period to be covered by the assessment the

ratio of the total assessment to the total premiums earned during such

period on all policies subject to assessment.

(c) Every mutual accident and health insurance company licensed to do

business in this state, if its charter or by-laws permit or are amended

to permit the issuance of policies without contingent mutual liability

of the policyholders for assessment, may with the permission of the

superintendent issue non-assessable policies in this state. Every such

company shall submit a copy of its proposed non-assessable policy or

policies for approval of the superintendent, and shall have obtained his

approval thereof. Every policy issued by any such company shall clearly

state whether or not the holder of such policy is subject to a liability

for assessment.

(d) (1) Any foreign mutual accident and health insurance company which

complies with the requirements of subsection (c) hereof for the issuance

of non-assessable policies may do an insurance business in this state

without complying with the requirements of subsection (b) hereof.

(2) No such company which does not comply with the requirements of

subsection (c) hereof shall do an insurance business in this state

unless its by-laws and its 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 the requirements of subsection (b) hereof.