N.Y. Insurance Law § 6108: Contingent liability; non-assessable policies

§ 6108. Contingent liability; non-assessable policies. (a) Every

contract of insurance and subscriber's agreement under or by which

contracts of insurance are issued or exchanged by any authorized

reciprocal insurer shall provide for a contingent several liability for

assessment of the subscriber as an inter-insurer on the risks of every

other subscriber in an amount not less than one nor more than ten times

the annual premium and in addition to the annual premium expressed in

such contracts of insurance issued to the subscriber by the reciprocal

insurer.

(b) If the admitted assets of any such insurer are at any time

insufficient for the payment of losses and expenses after providing for

all other liabilities of such insurer and the minimum surplus to

policyholders required by this chapter, the advisory committee shall,

within thirty days thereafter, order an assessment for the amount

necessary to pay such losses and expenses, and authorize the

attorney-in-fact to collect from each subscriber liable therefor a pro

rata share of the amount of such assessment, subject to the limit

specified in the contract of such subscriber and to maintain an action

therefor in the name of the attorney-in-fact.

(c) Every policy issued by any such insurer shall clearly state

whether or not the holder of the policy is subject to liability for

assessment. All policies issued by any such insurer which are subject to

liability for assessment shall contain a clear statement of the

liability of the policyholder for payment of a proportionate share of

any deficiency or impairment as provided by law within the limit

provided by the policy, and shall further state that any assessment

shall be for the exclusive benefit of holders of policies which provide

for such a contingent liability, and the holders of policies subject to

assessment shall not be liable to assessment in an amount greater in

proportion to the total deficiency than the ratio that the deficiency

attributable to the assessable business bears to the total deficiency.

(d) Any reciprocal insurer, except a municipal reciprocal insurer

which issues policies not covered by the property/casualty insurance

security fund, may with the permission of the superintendent issue

non-assessable policies or agreements in this state upon compliance with

the following requirements:

(1) It shall have and maintain a surplus to policyholders at least

equal to one hundred fifty percent of the amount of surplus to

policyholders which such insurer is required to maintain by the

provisions of section six thousand one hundred two of this article. Such

surplus shall be inclusive of any surplus required by any other sections

of this chapter.

(2) It shall have submitted a copy of its proposed non-assessable

policy or policies for approval of the superintendent, and shall have

obtained his approval thereof.