N.Y. Insurance Law § 6604: Organization of advance premium corporations

§ 6604. Organization of advance premium corporations. (a) An advance

premium corporation may be organized and licensed in the manner

prescribed in section six thousand six hundred three of this article and

may do, in addition to the kind of insurance specified in paragraph four

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

chapter, any one or more of the kinds of insurance specified in

paragraphs five, six, twelve, nineteen and twenty (inland marine only),

of such subsection, and in conjunction with insurance under the same

policy, the kinds of insurance specified in paragraphs seven, eight,

nine, thirteen, fourteen and fifteen (excluding workers' compensation

insurance) of such subsection, provided the whole risk for all the

perils as specified in such paragraphs is reinsured in an insurer

authorized to do business in this state or in an accredited reinsurer,

as defined in subsection (a) of section one hundred seven of this

chapter, insofar as specified in its charter, on compliance with the

following prerequisites:

(1) It shall have, in order to be licensed to do business in this

state as specified in its charter, not less than four hundred bona fide

applications for insurance of such kind or kinds, on real property

located in this state, and from not less than four hundred separate

applicants who have paid premiums of not less than ten thousand dollars

on insurance aggregating not less than one million dollars, and each

member of such corporation shall be subject to a contingent liability in

an amount at least equal to that provided in section six thousand six

hundred fourteen of this article.

(2) It shall have a cash organization or initial surplus fund of not

less than three hundred thousand dollars, which may be used in the

manner provided for in paragraph nine of subsection (a) of section one

thousand two hundred one of this chapter, and shall maintain at all

times, a surplus of at least two hundred thousand dollars.

(3) A licensed advance premium corporation may apply for an amended

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

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

chapter, except those specified in paragraphs one, two, eighteen and

twenty-three thereof, provided it has a surplus to policyholders equal

in the aggregate to the surplus required on organization by section four

thousand one hundred seven of this chapter for all of the kinds of

insurance for which it is to be licensed, and shall thereafter maintain

a surplus to policyholders equal to the amount specified in such

section, and if licensed to do any of the kinds of insurance set forth

in subsection (a) of section four thousand one hundred nine of this

chapter such company shall be subject to the provisions of such section

and to the provisions of subsection (a) of section four thousand one

hundred four of this chapter.

(b) (1) An advance premium corporation may also be organized and

licensed in the manner prescribed in section six thousand six hundred

three of this article to do in this state, as an assuming insurer,

solely reinsurance business of a kind or kinds specified in its license,

on compliance with all of the provisions of this chapter applicable to

an advance premium corporation organized and licensed pursuant to the

provisions of subsection (a) hereof, except as provided in paragraph two

hereof.

(2) It shall have not less than ten bona fide applications for

reinsurance of such kind or kinds on real property located within this

state, and from not less than ten separate applying insurers authorized

to do business in this state, providing for the payment of gross annual

reinsurance premiums of not less than twenty-five thousand dollars and

providing that such ceding insurer shall, as a member of such assuming

insurer, be subject to a contingent mutual liability in an amount at

least equal to that provided for in section six thousand six hundred

fourteen of this article.

(3) Such a corporation shall, pursuant to such license, do only the

business of reinsurance as herein provided, but may upon meeting the

requirements of paragraph one of subsection (a) of this section and upon

evidence satisfactory to the superintendent that it is complying with

paragraph two of subsection (a) of this section, relative to minimum

surplus, be licensed, pursuant to section one thousand one hundred two

of this chapter, to do the kind or kinds of insurance business as above

designated, both as a direct writer and as a reinsurer.

(c) The financial and deposit requirements set forth in subsection (a)

of this section shall be reduced by fifty percent for a cooperative

property/casualty insurance company initially licensed to do business in

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