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58-34 RECIPROCAL INSURERS
CHAPTER 58-34

RECIPROCAL INSURERS

58-34-1      Reciprocal insurance defined.
58-34-2      Reciprocal insurer defined.
58-34-3      Attorney defined.
58-34-4      Application of chapter to foreign reciprocal insurers.
58-34-5      Compliance required of existing insurers.
58-34-6      Organization of insurer--Number of persons required.
58-34-7      Application for certificate of authority--Execution and filing--Contents.
58-34-8      Bond of attorney in fact--Filing with and approval by director.
58-34-9      Amount and conditions of bond.
58-34-10      Advance notice of cancellation of bond.
58-34-11      Deposit in lieu of bond.
58-34-12      Action on bond or to recover against deposit.
58-34-13      Business name of insurer--Use in suits by and against.
58-34-14      Surplus funds of domestic reciprocal insurer--Amounts required.
58-34-15      Additional expendable surplus required of new insurer.
58-34-16      Additional kinds of insurance transacted--Minimum amount of surplus funds.
58-34-17      Surplus funds of existing insurers--Laws governing.
58-34-18      Issuance of certificate of authority.
58-34-19      Refusal, suspension, or revocation of certificate of authority--Grounds.
58-34-20      Rights and powers of attorney provided by subscribers' agreement.
58-34-21      Power of attorney--Form and contents.
58-34-22      Power of attorney--Terms--Approval by director.
58-34-23      Service of legal process upon domestic insurer.
58-34-24      Liability of subscribers for judgment against insurer--Service of legal process.
58-34-25      Eligibility to become subscriber.
58-34-26      Authority of corporation to exchange insurance contracts.
58-34-27      Representatives of subscribers not liable on contract.
58-34-28      Advisory committee representing subscribers--Selection.
58-34-29      Advisory committee--Qualifications of members.
58-34-30      Powers of advisory committee.
58-34-31      Modification of subscribers' agreement or power of attorney.
58-34-32      Kinds of business transacted--Life or title insurance excepted.
58-34-33      Reinsurance authorized.
58-34-34      Advance of funds to insurer.
58-34-35      Liability of subscribers several and proportionate.
58-34-36      Contingent assessment liability of subscriber.
58-34-37      Contingent liability stated in assessable policy.
58-34-38      Assessments against subscribers--Authority for levy.
58-34-39      Computation of amounts of assessments--Ratio of deficiency to premiums earned.
58-34-40      Earned premiums, computation for purpose of assessments.
58-34-41      Offset of claim for unearned premium against assessment prohibited.
58-34-42      Time limit for levy of assessment.
58-34-43      Aggregate liability of subscriber--Maximum in one year.
58-34-44      Subscriber not liable until final judgment against insurer.
58-34-45      Limited liability of subscriber on judgment.
58-34-46      Nonassessable policies--Authorization for issuance--Extinguishment of contingent liability.


58-34-47      Extinguishment of contingent liability of all subscribers required for authorization of nonassessable policies.
58-34-48      Impairment of surplus required for nonassessable policies--Revocation of extinguishment authority.
58-34-49      Savings--Distribution to subscribers.
58-34-50      Liquidation--Distribution of remaining assets to subscribers.
58-34-51      Annual statement of insurer--Filing.
58-34-52      Annual statement--Supplemental information required by director.
58-34-53      Determination of financial condition--Rules applied by director.
58-34-54      Premium deposits as assets.
58-34-55      Surplus deposits--Allowance as assets.
58-34-56      Uncollected assessments not allowed as assets.
58-34-57      Contingent liability of subscribers not allowed as asset.
58-34-58      Reserves charged as liabilities.
58-34-59      Computation of reserves.
58-34-60      Surplus deposits of subscribers not a liability.
58-34-61      Merger or conversion prohibited.
58-34-62      Impairment of surplus--Deficiency to be made up.
58-34-63      Failure to make up deficiency--Insurer deemed insolvent.
58-34-64      Liquidation of insurer ordered--Levy of assessment against subscribers.



58-34-1Reciprocal insurance defined.

"Reciprocal" insurance is that resulting from an interexchange among persons, known as "subscribers," of reciprocal agreements of indemnity, the interexchange being effectuated through an "attorney in fact" common to all such persons.

Source: SL 1966, ch 111, ch 19, § 1.



58-34-2Reciprocal insurer defined.

A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney in fact to provide reciprocal insurance among themselves.

Source: SL 1966, ch 111, ch 19, § 2.



58-34-3Attorney defined.

"Attorney," as used in this chapter, refers to the attorney in fact of a reciprocal insurer. The attorney may be an individual, firm, or corporation.

Source: SL 1966, ch 111, ch 19, § 6.



58-34-4Application of chapter to foreign reciprocal insurers.

All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals.

Source: SL 1966, ch 111, ch 19, § 3 (1).



58-34-5Compliance required of existing insurers.

Authorized reciprocal insurers existing on July 1, 1966, shall after said date comply with the provisions of this chapter, and shall make such amendments to their subscribers' agreements, power of attorney, policies, and other documents and accounts and perform such other acts as may be required for such compliance.

Source: SL 1966, ch 111, ch 19, § 3 (2).



58-34-6Organization of insurer--Number of persons required.

Twenty-five or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the director for a certificate of authority.

Source: SL 1966, ch 111, ch 19, § 7 (1).



58-34-7Application for certificate of authority--Execution and filing--Contents.

The proposed attorney shall execute and file with the director an application for a certificate of authority setting forth:

(1)    The name of the insurer;

(2)    The location of the insurer's principal office, which shall be the same as that of the attorney and shall be maintained within this state;

(3)    The kinds of insurance business proposed to be transacted;

(4)    The names and addresses of the original subscribers;

(5)    The designation and appointment of the proposed attorney and a copy of the power of attorney;

(6)    The names and addresses of the officers and directors of the attorney, if a corporation, or its members, if a firm;

(7)    The powers of the subscribers' advisory committee; and the names and terms of office of the members thereof;

(8)    That all moneys paid to the reciprocal shall, after deducting therefrom any sum payable to the attorney, be held in the name of the insurer and for the purposes specified in the subscribers' agreement;

(9)    A copy of the subscribers' agreement;

(10)    A statement that each of the original subscribers has in good faith applied for insurance of a kind proposed to be transacted, and that the insurer has received from each such subscriber the full premium or premium deposit required for the policy applied for, for a term of not less than six months at an adequate rate theretofore filed with and approved by the director;

(11)    A statement of the financial condition of the insurer, a schedule of its assets, and a statement that the surplus as required by §§ 58-34-14 to 58-34-16, inclusive, is on hand; and

(12)    A copy of each policy, endorsement and application form it then proposes to issue or use.

Such declaration shall be acknowledged by the attorney.

Source: SL 1966, ch 111, ch 19, § 7 (2).



58-34-8Bond of attorney in fact--Filing with and approval by director.

Concurrently with the filing of the application provided for in § 58-34-7, the attorney of a domestic reciprocal insurer shall file with the director a bond in favor of the State of South Dakota for the benefit of all persons damaged as a result of a breach of the conditions of his bond as set forth in § 58-34-9. The bond shall be executed by the attorney and by an authorized corporate surety, and shall be subject to the director's approval.

Source: SL 1966, ch 111, ch 19, § 12 (1).



58-34-9Amount and conditions of bond.

The bond required by § 58-34-8 shall be in the penal sum of twenty-five thousand dollars, conditioned that the attorney will faithfully account for all moneys and other property of the insurer coming into his hands, and that he will not withdraw or appropriate to his own use from the funds of the insurer, any moneys or property to which he is not entitled.

Source: SL 1966, ch 111, ch 19, § 12 (2).



58-34-10Advance notice of cancellation of bond.

The bond required by § 58-34-8 shall provide that it is not subject to cancellation unless thirty days' advance notice in writing of cancellation is given to the attorney and the director.

Source: SL 1966, ch 111, ch 19, § 12 (3).



58-34-11Deposit in lieu of bond.

In lieu of the bond required under § 58-34-8, the attorney may maintain on deposit through the office of the director, a like amount of cash or of securities eligible for deposit under §§ 58-7-8 to 58-7-10, inclusive, and subject to the same conditions as the bond.

Source: SL 1966, ch 111, ch 19, § 13.



58-34-12Action on bond or to recover against deposit.

Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of its conditions or by a receiver or liquidator of the insurer. Amounts recovered on the bond shall be deposited in and become part of the insurer's funds. The total aggregate liability of the surety shall be limited to the amount of the penalty of such bond.

Source: SL 1966, ch 111, ch 19, § 14.



58-34-13Business name of insurer--Use in suits by and against.

A reciprocal insurer shall:

(1)    Have and use a business name. The name shall include the word "reciprocal," or "interinsurer," or "interinsurance," or "exchange," or "underwriters," or "underwriting."

(2)    Sue and be sued in its own name.

Source: SL 1966, ch 111, ch 19, § 5.



58-34-14Surplus funds of domestic reciprocal insurer--Amounts required.

A domestic reciprocal insurer formed after June 30, 1966, may be authorized to transact insurance if it has otherwise complied with the applicable provisions of this title and has and thereafter maintains surplus funds as follows:

(1)    To transact property insurance, surplus of not less than two hundred thousand dollars;

(2)    To transact casualty insurance, without workers' compensation included, surplus of not less than two hundred thousand dollars; to transact casualty insurance, including workers' compensation, surplus of not less than three hundred thousand dollars.

Source: SL 1966, ch 111, ch 19, § 8 (2).



58-34-15Additional expendable surplus required of new insurer.

In addition to surplus required to be maintained under § 58-34-14, a domestic reciprocal insurer formed after June 30, 1966, shall have, when first authorized to transact insurance, expendable surplus equal to not less than one-half of the minimum amount of surplus required to be maintained.

Source: SL 1966, ch 111, ch 19, § 8 (3).



58-34-16Additional kinds of insurance transacted--Minimum amount of surplus funds.

A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this title therefor and possesses and maintains surplus funds not less in amount than the minimum capital stock required of a domestic stock insurer for authority to transact a like combination of kinds of insurance, but subject to §§ 58-6-27 and 58-6-28.

Source: SL 1966, ch 111, ch 19, § 8 (4).



58-34-17Surplus funds of existing insurers--Laws governing.

A domestic reciprocal insurer, which held a valid certificate of authority to transact business in this state immediately prior to July 1, 1966, is governed, as to surplus required to be maintained, by §§ 58-6-27 and 58-6-28.

Source: SL 1966, ch 111, ch 19, § 8 (1).



58-34-18Issuance of certificate of authority.

The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer.

Source: SL 1966, ch 111, ch 19, § 9 (1).



58-34-19Refusal, suspension, or revocation of certificate of authority--Grounds.

The director may refuse, suspend, or revoke the certificate of authority, in addition to other grounds therefor, for failure of the attorney to comply with any provision of this title.

Source: SL 1966, ch 111, ch 19, § 9 (2).



58-34-20Rights and powers of attorney provided by subscribers' agreement.

The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers.

Source: SL 1966, ch 111, ch 19, § 10 (1).



58-34-21Power of attorney--Form and contents.

The power of attorney described in § 58-34-20 must set forth:

(1)    The powers of the attorney;

(2)    That the attorney is empowered to accept service of process on behalf of the insurer and to authorize the director to receive service of process in actions against the insurer upon contracts exchanged;

(3)    The general services to be performed by the attorney;

(4)    The maximum amount to be deducted from advanced premiums or deposits to be paid to the attorney and the general items of expense in addition to losses, to be paid by the insurer; and

(5)    Except as to nonassessable policies, a provision for a contingent several liability of each subscriber in a specified amount which amount shall be not less than one nor more than ten times the premium or premium deposit stated in the policy.

Source: SL 1966, ch 111, ch 19, § 10 (2).



58-34-22Power of attorney--Terms--Approval by director.

The terms of any power of attorney or agreement collateral thereto shall be fair and equitable, and no such power or agreement shall be effective as to a domestic reciprocal insurer until approved by the director.

Source: SL 1966, ch 111, ch 19, § 10 (3).



58-34-23Service of legal process upon domestic insurer.

Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney at his principal offices or by serving the director as the insurer's process agent under § 58-6-39.

Source: SL 1966, ch 111, ch 19, § 15 (1).



58-34-24Liability of subscribers for judgment against insurer--Service of legal process.

Any judgment based upon legal process so served shall be binding upon each of the insurer's subscribers as their respective interests may appear, but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had upon each such subscriber.

Source: SL 1966, ch 111, ch 19, § 15 (2).



58-34-25Eligibility to become subscriber.

Individuals, partnerships, associations, and corporations, public or private, of this state, hereby designated as subscribers, are authorized to exchange reciprocal or interinsurance contracts with each other, or with individuals, partnerships, associations, and corporations, public or private, of other states and countries, providing indemnity among themselves for any loss which may be insured against by the reciprocal insurer to which they are subscribers; except, that public corporations of this state may so insure only in an insurer which has a surplus of three hundred thousand dollars or more and under an insurance contract as to which such an insured has no contingent liability.

Source: SL 1966, ch 111, ch 19, § 19 (1).



58-34-26Authority of corporation to exchange insurance contracts.

Any corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation have full power and authority to exchange insurance contracts of the kind and character mentioned in § 58-34-25. The right to exchange such contracts is declared to be incidental to the purposes for which such corporations are organized and as much granted as the rights and powers expressly conferred.

Source: SL 1966, ch 111, ch 19, § 19 (2).



58-34-27Representatives of subscribers not liable on contract.

Any officer, representative, trustee, receiver, or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon the contract by reason of acting in such representative capacity.

Source: SL 1966, ch 111, ch 19, § 19 (3).



58-34-28Advisory committee representing subscribers--Selection.

The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt.

Source: SL 1966, ch 111, ch 19, § 20 (1).



58-34-29Advisory committee--Qualifications of members.

Not less than two-thirds of the advisory committee of a domestic reciprocal insurer shall be subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney.

Source: SL 1966, ch 111, ch 19, § 20 (2).



58-34-30Powers of advisory committee.

The advisory committee of a domestic reciprocal insurer shall:

(1)    Supervise the finances of the insurer;

(2)    Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney;

(3)    Procure the audit of the accounts and records of the insurer and of the attorney at the expense of the insurer; and

(4)    Have such additional powers and functions as may be conferred by the subscribers' agreement.

Source: SL 1966, ch 111, ch 19, § 20 (3).



58-34-31Modification of subscribers' agreement or power of attorney.

Modifications of the terms of the subscribers' agreement or of the power of attorney of a domestic reciprocal insurer shall be made jointly by the attorney and the subscribers' advisory committee. No such modification shall be effective until approved by the director.

Source: SL 1966, ch 111, ch 19, § 11.



58-34-32Kinds of business transacted--Life or title insurance excepted.

A reciprocal insurer may, upon qualifying therefor as provided for by this title, transact any kinds of business defined by this title, other than life or title insurance.

Source: SL 1966, ch 111, ch 19, § 4 (1).



58-34-33Reinsurance authorized.

A reciprocal insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact.

Source: SL 1966, ch 111, ch 19, § 4 (2).



58-34-34Advance of funds to insurer.

The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and, except upon liquidation of the insurer, shall not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. No such withdrawal or repayment shall be made without the advance approval of the director. This section does not apply to bank loans, or to other loans made upon security.

Source: SL 1966, ch 111, ch 19, § 16.



58-34-35Liability of subscribers several and proportionate.

The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several and proportionate liability, and not joint.

Source: SL 1966, ch 111, ch 19, § 21 (1).



58-34-36Contingent assessment liability of subscriber.

Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while his policy was in force. Such contingent liability may be at the rate of not less than one nor more than ten times the premium or premium deposit stated in the policy, and the maximum aggregate thereof shall be computed in the manner set forth in § 58-34-43.

Source: SL 1966, ch 111, ch 19, § 21 (2).



58-34-37Contingent liability stated in assessable policy.

Each assessable policy issued by the insurer shall contain a statement of the contingent liability, set in type of the same prominence as the insuring clause.

Source: SL 1966, ch 111, ch 19, § 21 (3).



58-34-38Assessments against subscribers--Authority for levy.

Assessments may be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval by the subscribers' advisory committee and the director; or by the director in liquidation of the insurer.

Source: SL 1966, ch 111, ch 19, § 23 (1).



58-34-39Computation of amounts of assessments--Ratio of deficiency to premiums earned.

Each subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event his aggregate contingent liability as provided by this chapter, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to be covered by the assessment, the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment.

Source: SL 1966, ch 111, ch 19, § 23 (2).



58-34-40Earned premiums, computation for purpose of assessments.

In computing the earned premiums for the purposes of § 58-34-39, the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy.

Source: SL 1966, ch 111, ch 19, § 23 (3).



58-34-41Offset of claim for unearned premium against assessment prohibited.

No subscriber shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or losses payable.

Source: SL 1966, ch 111, ch 19, § 23 (4).



58-34-42Time limit for levy of assessment.

Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay his share of any assessment, as computed and limited in accordance with this chapter, if:

(1)    While his policy is in force or within one year after its termination, he is notified by either the attorney or the director of his intentions to levy such assessment; or

(2)    An order to show cause why a receiver, conservator, rehabilitator, or liquidator of the insurer should not be appointed is issued while his policy is in force or within one year after its termination.

Source: SL 1966, ch 111, ch 19, § 24.



58-34-43Aggregate liability of subscriber--Maximum in one year.

No one policy, or subscriber of such policy, shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by a domestic reciprocal insurer in any one calendar year, in excess of the amount provided for in the power of attorney or in the subscribers' agreement, computed solely upon premium earned on such policy during that year.

Source: SL 1966, ch 111, ch 19, § 25.



58-34-44Subscriber not liable until final judgment against insurer.

No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days.

Source: SL 1966, ch 111, ch 19, § 22 (1).



58-34-45Limited liability of subscriber on judgment.

Any such judgment shall be binding upon each subscriber only in such proportion as his interest may appear and in an amount not exceeding his contingent liability, if any.

Source: SL 1966, ch 111, ch 19, § 22 (2).



58-34-46Nonassessable policies--Authorization for issuance--Extinguishment of contingent liability.

If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the director shall issue his certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for so long as all such surplus remains unimpaired.

Source: SL 1966, ch 111, ch 19, § 26 (1).



58-34-47Extinguishment of contingent liability of all subscribers required for authorization of nonassessable policies.

The director shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for all kinds of insurance transacted by it. Except, that if required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its subscribers as may acquire such policies in such state, and need not extinguish the contingent liability applicable to policies theretofore in force in such state.

Source: SL 1966, ch 111, ch 19, § 26 (3).



58-34-48Impairment of surplus required for nonassessable policies--Revocation of extinguishment authority.

Upon impairment of the surplus required by § 58-34-46, the director shall forthwith revoke the certificate of authority to extinguish the contingent liability of subscribers. Such revocation shall not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has theretofore been paid; but after such revocation no policy shall be issued or renewed without providing for contingent assessment liability of the subscriber.

Source: SL 1966, ch 111, ch 19, § 26 (2).



58-34-49Savings--Distribution to subscribers.

A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but this shall not prevent retrospective rating, nor distribution on a retrospective plan nor distribution varying as to classes of subscribers based on the experience of such subscribers.

Source: SL 1966, ch 111, ch 19, § 27.



58-34-50Liquidation--Distribution of remaining assets to subscribers.

Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in § 58-34-34, and the return of any unused premium, savings, or credits then standing on subscribers' accounts, shall be distributed to its subscribers who were such within the twelve months prior to the last termination of its certificate of authority, according to such formula as the director may approve.

Source: SL 1966, ch 111, ch 19, § 28.



58-34-51Annual statement of insurer--Filing.

The annual statement of a reciprocal insurer shall be made and filed by its attorney.

Source: SL 1966, ch 111, ch 19, § 17 (1).



58-34-52Annual statement--Supplemental information required by director.

The annual statement of a reciprocal insurer shall be supplemented by such information as may be required by the director relative to the affairs and transactions of the attorney in so far as they relate to the reciprocal insurer.

Source: SL 1966, ch 111, ch 19, § 17 (2).



58-34-53Determination of financial condition--Rules applied by director.

In determining the financial condition of a reciprocal insurer the director shall apply the rules set forth in §§ 58-34-54 to 58-34-60, inclusive.

Source: SL 1966, ch 111, ch 19, § 18.



58-34-54Premium deposits as assets.

All premium deposits delinquent less than ninety days shall be allowed as assets.

Source: SL 1966, ch 111, ch 19, § 18 (4).



58-34-55Surplus deposits--Allowance as assets.

The surplus deposits of subscribers shall be allowed as assets, except that any premium deposits delinquent for ninety days shall first be charged against such surplus deposit.

Source: SL 1966, ch 111, ch 19, § 18 (2).



58-34-56Uncollected assessments not allowed as assets.

An assessment levied upon subscribers, and not collected, shall not be allowed as an asset.

Source: SL 1966, ch 111, ch 19, § 18 (5).



58-34-57Contingent liability of subscribers not allowed as asset.

The contingent liability of subscribers shall not be allowed as an asset.

Source: SL 1966, ch 111, ch 19, § 18 (6).



58-34-58Reserves charged as liabilities.

The director shall charge as liabilities the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis.

Source: SL 1966, ch 111, ch 19, § 18 (1).



58-34-59Computation of reserves.

The computation of reserves shall be based upon premium deposits other than membership fees and without any deduction for expenses and the compensation of the attorney.

Source: SL 1966, ch 111, ch 19, § 18 (7).



58-34-60Surplus deposits of subscribers not a liability.

The surplus deposits of subscribers shall not be charged as a liability.

Source: SL 1966, ch 111, ch 19, § 18 (3).



58-34-61Merger or conversion prohibited.

A domestic reciprocal insurer shall not merge with another reciprocal insurer or be converted to a stock or mutual insurer.

Source: SL 1966, ch 111, ch 19, § 29.



58-34-62Impairment of surplus--Deficiency to be made up.

If the assets of a reciprocal insurer are at any time insufficient to discharge its liabilities, other than any liability on account of funds contributed by the attorney or others, and to maintain the required surplus, its attorney shall forthwith make up the deficiency or levy an assessment upon the subscribers for the amount needed to make up the deficiency; but subject to the limitation set forth in the power of attorney or policy.

Source: SL 1966, ch 111, ch 19, § 30 (1).



58-34-63Failure to make up deficiency--Insurer deemed insolvent.

If the attorney fails to make up the deficiency described in § 58-34-62 or to make the assessment within thirty days after the director orders him to do so, or if the deficiency is not fully made up within sixty days after the date the assessment was made, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title.

Source: SL 1966, ch 111, ch 19, § 30 (2).



58-34-64Liquidation of insurer ordered--Levy of assessment against subscribers.

If liquidation of a reciprocal insurer is ordered, an assessment shall be levied upon the subscribers for such an amount, subject to limits as provided by this chapter, as the director determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney or other persons, but including the reasonable cost of the liquidation.

Source: SL 1966, ch 111, ch 19, § 30 (3).