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2023 Alaska Statutes › Title 21. Insurance › Chapter 72. Benevolent Associations › Sec. 21.72.110. Assessment for death benefit.

(a) Within 30 days after a benevolent association receives a completed proof of claim for death of a member, it must mail to each of its members in good standing an assessment notice stating
(1) the name, date, and place of death of the deceased member;
(2) the number of the proof of death claim assigned by the association;
(3) the amount of the assessment and the expiration date of the assessment payment;
(4) the number of members in good standing to whom notices are being sent, as computed from the last completed assessment.
(b) At the time of mailing the assessment notice required by (a) of this section, the association shall send a duplicate copy to the director for filing, together with information as to the mailing of the notice to members.
2023 Alaska Statutes › Title 21. Insurance › Chapter 72. Benevolent Associations › Sec. 21.72.120. Annual statement.

(a) In addition to compliance with AS 21.09.200, the annual statement of a benevolent association must exhibit the following items and facts:
(1) the name and business address of the association;
(2) the names and addresses of the officers of the association;
(3) the number of membership contracts in force at the commencement of the year and the number of memberships in good standing at the close of the year for which the statement is made; this provision is also applicable to each subgroup or class, if any, of the association;
(4) the number of death losses claimed; the number and total amount of death losses paid; the number of death claims compromised, denied, or resisted and reasons therefor;
(5) the number of assessments in the association and in each subgroup or class, if any; the amount collected in each assessment; income to the benevolent association from all other sources; and all other fees, assessments, donations, of any kind or nature, except new membership fees from new members;
(6) the expenses actually incurred during the year; debts unpaid at the commencement of the year; debts and obligations of any kind, not including death losses actually paid, incurred during the year; debts unpaid at the close of the year; a breakdown of expenses to show the amount paid in salaries or commissions, office expense, and other expenses, in those cases where members of the benevolent association are assessed for operating expenses of the association;
(7) whether the association has complied with the provisions of AS 21.72.090 and 21.72.100;
(8) the information required by AS 21.72.090.
(b) Two officers of the association shall attest under oath to the truth of the facts contained in the annual statement. At least one of the officers must have charge of making up the statement.
(c) A copy of the annual statement certified by the director must be filed on or before the first day of March each year by the association in the office of the magistrate in the judicial district in which the business office of the association is located.
2023 Alaska Statutes › Title 21. Insurance › Chapter 72. Benevolent Associations › Sec. 21.72.130. Benevolent association defined.

(a) A corporation, association, or society, or by whatever name called, that issues a certificate, policy, membership agreement, or makes a promise or agreement with its members, whereby, upon the death of a member, money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the corporation, association, or society to the legal representatives of the member, or to the beneficiary designated by the member, which money, benefit, charity, aid, or relief is derived from voluntary donations, or from admission fees, dues, or assessments, or any of them collected or to be collected from the members, or members of a class therein, or interest or accretions, or accumulations; and if the money or other benefit, charity, aid, or relief, so realized, is applied to or accumulated for the uses and purposes herein specified, the uses of the corporation, association, or society, or the expenses of management and prosecution of its business, is considered to be a benevolent association for the purposes of this chapter.
(b) The definition of benevolent association in (a) of this section does not apply to
(1) burial or death benefits, annuities, endowments, or any other benefit payments of a legal reserve life or health insurer, or of a labor union, railroad brotherhood, or lodge having as a primary business the improvement of working conditions;
(2) a ladies auxiliary to a labor union, railroad brotherhood, or lodge referred to in (1) of this subsection; or
(3) the benevolent plans within fraternal orders if limited to members and if the plan is not the principal object for the formation or continuance of the fraternal order.
2023 Alaska Statutes › Title 21. Insurance › Chapter 72. Benevolent Associations › Sec. 21.72.150. Membership contract.

(a) A “membership contract” is a certificate, policy, membership agreement, by whatever name called, or a promise or agreement, of a benevolent association with any or all of its members, whereby money or other benefit, charity, aid, or relief is to be paid, provided, or rendered by the association upon the decease of a member to the legal representatives of the member, or to the beneficiary or beneficiaries designated by the member.
(b) There shall be one contributing member for each membership contract, but a membership contract may cover more than one individual.
2023 Alaska Statutes › Title 21. Insurance › Chapter 72. Benevolent Associations › Sec. 21.72.170. Other provisions applicable.

In addition to the provisions contained in the chapter, other chapters and provisions of this title shall apply to benevolent associations, to the extent applicable, as follows:
(1) AS 21.03;
(2) AS 21.06;
(3) AS 21.09.010, 21.09.050, 21.09.100, and 21.09.130 - 21.09.190;
(4) AS 21.09.247;
(5) AS 21.18.010 and 21.18.030;
(6) AS 21.36;
(7) AS 21.42;
(8) AS 21.69.370, 21.69.390, 21.69.400, 21.69.630, and 21.69.640;
(9) AS 21.78.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.010. Applicability.

(a) All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals.
(b) Existing authorized reciprocal insurers shall, after July 1, 1966, comply with the provisions of this chapter, and shall make amendments to their subscribers' agreement, power of attorney, policies, and other documents and accounts and perform other acts that may be required for compliance.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.020. Insuring powers of reciprocals.

(a) Except as provided in (c) of this section, a reciprocal insurer may, upon qualifying as provided for by this title, transact any kind or kinds of insurance defined by this title, other than life or title insurances.
(b) The insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact.
(c) The director shall establish by regulation the type of marine insurance that a reciprocal insurer may provide.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.030. Name, suits.

(a) A reciprocal insurer shall
(1) have and use a business name; the name must include the word “reciprocal” or “interinsurer” or “exchange” or “underwriters” or “underwriting” or “association”;
(2) sue and be sued in its own name.
(b) In addition to the requirements of (a) of this section, a cooperative insurer organized under AS 21.75.300 - 21.75.330 shall include the word “cooperative” in its name.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.040. Attorney-in-fact.

(a) [Repealed, § 223 ch 67 SLA 1992.]
(b) The attorney-in-fact of a foreign or alien reciprocal insurer, that is authorized to transact insurance in this state, may not, by virtue of discharge of its duties as the attorney-in-fact with respect to the insurer's transactions in this state, be considered to be doing business in this state within the meaning of a law of this state applying to foreign firms or corporations.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.050. Surplus funds required.

(a) A domestic reciprocal insurer formed in accordance with the provisions of this chapter shall have and maintain a surplus no less than an amount equal to the total of the capital and one-half of the surplus that would be required of a domestic stock insurer writing the same lines for which the reciprocal insurer seeks to be authorized.
(b) A foreign reciprocal insurer shall have and maintain a surplus no less than an amount equal to the total capital and surplus that would be required of a domestic stock insurer writing the same lines for which the reciprocal seeks to be authorized.
(c) A domestic reciprocal insurer formed under this chapter by and insuring only 10 or more municipalities shall
(1) comply with (a) of this section or post a bond for an amount equal to the capital that would be required of a domestic stock insurer writing the same lines of insurance for which the reciprocal insurer seeks to be authorized; and
(2) maintain a surplus of $250,000 in admitted assets or a surplus sufficient to operate the reciprocal insurer for one year, whichever is greater.
(d) Notwithstanding (a) and (c) of this section, or AS 21.09.080, domestic reciprocal insurers duly licensed and capitalized on December 31, 1984, shall have and maintain the capital and surplus required at the date of their original license.
(e) Notwithstanding (a) - (c) of this section, the director shall establish by regulation the level of surplus to be maintained by a reciprocal insurer providing marine insurance.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.055. Surplus funds for cooperative insurers.

A cooperative insurer organized under AS 21.75.300 - 21.75.330, if it has otherwise complied with the applicable provisions of this chapter, may be authorized to transact insurance if it has and maintains surplus funds equal to one-half of the capital required for a domestic reciprocal insurer under AS 21.75.050(a) and such additional surplus as the director considers sufficient.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.060. Organization of reciprocal insurer.

(a) Ten or more persons domiciled in this state may organize a domestic reciprocal insurer and make application to the director for a certificate of authority to transact insurance.
(b) The proposed attorney-in-fact shall fulfill the requirements of and shall execute and file with the director when applying for a certificate of authority, a declaration setting out
(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-in-fact and shall be maintained in this state, and the mailing address, electronic mailing address, and telephone numbers;
(3) the kinds of insurance proposed to be transacted;
(4) the names and addresses of the original subscribers;
(5) the designation and appointment of the proposed attorney-in-fact and a copy of the power of attorney;
(6) the names and addresses of the officers and directors of the attorney-in-fact, 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;
(8) that all money paid to the reciprocal insurer shall, after deducting any sum payable to the attorney-in-fact, 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 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 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 AS 21.75.050 is on hand;
(12) a copy of each policy, endorsement, and application form it then proposes to issue or use.
(c) The declaration shall be acknowledged by the attorney-in-fact in the manner required for the acknowledgment of deeds.
(d) The director may provide financial and technical assistance to persons who wish to establish a reciprocal insurer to provide marine insurance under this chapter.
(e) The areas the director may assist the person with under (d) of this section include
(1) preparing the documentation necessary to form the reciprocal insurer;
(2) obtaining reinsurers for the reciprocal insurer;
(3) preparing subscriber rules and management procedures for the reciprocal insurer;
(4) financing the formation expenses of the reciprocal insurer;
(5) managing the reciprocal insurer.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.070. Certificate of authority.

(a) The certificate of authority of a reciprocal insurer shall be issued to its attorney-in-fact in the name of the insurer.
(b) The director may refuse, suspend, or revoke the certificate of authority, in addition to other grounds, for failure of the attorney-in-fact to comply with a provision of this title.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.090. Modifications.

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-in-fact and the subscribers' advisory committee. A modification may not be effective retroactively, or apply to an insurance contract issued before the modification.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.100. Attorney-in-fact's bond.

(a) Concurrently with the filing of the declaration provided in AS 21.75.060, the attorney-in-fact of a domestic reciprocal insurer shall file with the director a bond in favor of this state for the benefit of all persons damaged as a result of a breach by the attorney-in-fact of the conditions of the bond as set out in (b) of this section. The bond shall be executed by the attorney-in-fact and by an authorized corporate surety, shall meet the requirements established under AS 21.27.190, and shall be subject to the director's approval.
(b) The bond shall be in the sum of $100,000, aggregate in form, conditioned that the attorney-in-fact will faithfully account for all money and other property of the insurer coming into the hands of the attorney-in-fact and that the attorney-in-fact will not withdraw or appropriate to personal use from the funds of the insurer, money or property to which the attorney-in-fact is not entitled under the subscriber's agreement.
(c) [Repealed, § 223 ch 67 SLA 1992.]
(d) The director may require the attorney-in-fact, unless wholly owned by the reciprocal insurer, to maintain an errors and omissions policy issued by an admitted insurer acceptable to the director providing coverage in an amount and issued by an insurer approved by the director. This requirement is satisfied if the attorney-in-fact maintains an errors and omissions policy to satisfy the laws of another state in an amount approved by the director.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.110. Action on bond.

Action on the attorney-in-fact's bond or to recover against a deposit made in lieu of the bond 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 the bond.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.115. Examination of an attorney-in-fact.

An attorney-in-fact of a reciprocal insurer is subject to examination by order of the director under AS 21.06.120 and 21.06.140 - 21.06.160 for the purpose of determining compliance with this title relating to the operations of the reciprocal insurer or its attorney-in-fact that the director determines cannot be obtained by examination of the reciprocal insurer. The cost of the examination shall be paid by the attorney-in-fact.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.120. Service of process.

(a) Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney-in-fact at the principal offices of the attorney-in-fact or by serving the director as the insurer's process agent under AS 21.09.180 and 21.09.190.
(b) A 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 subscriber.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.130. Annual statement.

(a) The annual statement of a reciprocal insurer shall be made by its attorney-in-fact and filed with the director, as provided in AS 21.09.200.
(b) The statement shall be supplemented by information that may be required by the director relative to the affairs and transactions of the attorney-in-fact insofar as they relate to the reciprocal insurer.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.135. Quarterly statements.

(a) The director may require a reciprocal insurer's attorney-in-fact to file a quarterly financial statement as provided in AS 21.09.205.
(b) A statement required under (a) of this section shall be supplemented by information that may be required by the director relative to the affairs and transactions of the attorney-in-fact that relate to the reciprocal insurer.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.140. Contributions to insurer.

The attorney-in-fact or other parties may advance to a domestic reciprocal insurer upon reasonable terms the funds it may require from time to time in its operations. Sums advanced may not be treated as a liability of the insurer, and, except upon liquidation of the insurer, may not be withdrawn or repaid except out of the insurer's realized earned surplus in excess of its minimum required surplus. A withdrawal or repayment may not be made without the advance approval of the director. This section does not apply to bank loans or to loans for which security is given.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.150. Determination of financial condition.

In determining the financial condition of a reciprocal insurer the director shall apply the following rules:
(1) the same reserves as are required of incorporated insurers issuing nonassessable policies on a reserve basis shall be charged as liabilities;
(2) the surplus deposits of subscribers shall be allowed as assets, except the premium deposits delinquent for 90 days shall first be charged against the surplus deposit;
(3) the surplus deposits of subscribers may not be charged as a liability;
(4) all premium deposits delinquent less than 90 days shall be allowed as assets;
(5) an assessment levied upon subscribers, and not collected, may not be allowed as an asset;
(6) the contingent liability of subscribers may not be allowed as an asset;
(7) the computation of reserves shall be based upon premium deposits other than membership fees and without deductions for expenses and the compensation of the attorney-in-fact.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.160. Who may be subscribers.

Individuals, partnerships, and corporations of this state may make application, enter into agreement for, and hold policies or contracts in or with and be a subscriber of a domestic, foreign, or alien reciprocal insurer. A 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 as a subscriber to exchange insurance contracts through the reciprocal insurer. The right to exchange the contracts is incidental to the purposes for which the corporations are organized and to be as fully granted as the rights and powers expressly conferred upon the corporations. Government or governmental agencies, state or political subdivisions, boards, associations, estates, trustees, or fiduciaries are authorized to exchange nonassessable reciprocal interinsurance contracts with each other and with individuals, partnerships, and corporations to the same extent that individuals, partnerships, and corporations are authorized to exchange reciprocal interinsurance contracts. An officer, representative, trustee, receiver, or legal representative of a subscriber shall be recognized as acting for or on its behalf for the purpose of the contract but shall be personally liable upon the contract by reason of acting in the representative capacity.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.170. Subscriber's advisory committee.

(a) The subscriber's advisory committee shall meet at least annually and shall consist of not less than nine individuals elected by the subscribers, at least two-thirds of whom are subscribers or officers or directors of subscriber corporations and, except for a reciprocal insurer that wholly owns its attorney-in-fact, not more than one-third of whom may be
(1) the attorney-in-fact or an employee, officer, director, affiliate, or a person having a financial interest in the attorney-in-fact; or
(2) a person representing the attorney-in-fact or an employee, officer, director, affiliate, or other person having a financial interest in the attorney-in-fact; a person shall be treated as having a financial interest in the attorney-in-fact if the person
(A) owns, directly or indirectly, more than one percent of the outstanding stock in the attorney-in-fact;
(B) has an outstanding loan from the attorney-in-fact; or
(C) earns a commission or other compensation as a producer for the reciprocal insurer.
(b) A member of the subscriber's advisory committee may be elected to a term of office of not less than one year nor more than four years. A member may be reelected for an unlimited number of terms. Terms of office may be staggered to provide for continuity.
(c) The chair of the committee shall be elected by the members of the committee and the committee shall adopt rules consistent with the purposes of the committee.
(d) The attorney-in-fact shall appoint a secretary.
(e) Special meetings of the committee may be called by the attorney-in-fact, the chair of the committee, three members of the committee, or a signed petition of at least one percent of the subscribers or three individual subscribers, whichever is greater, as of the most recent annual report of the reciprocal insurer.
(f) The committee shall
(1) supervise the finances of the reciprocal insurer;
(2) supervise the reciprocal insurer's operations to assure conformity with the subscriber's agreement;
(3) procure the audit of the accounts and records of the reciprocal insurer and of the attorney-in-fact at the expense of the reciprocal insurer; and
(4) have additional powers and functions that may be conferred by the subscriber's agreement.
(g) Notwithstanding (a) of this section, a domestic reciprocal insurer transacting all of its insurance activities on a subject resident, located, or to be performed in this state may, with the prior written approval of the director, have a subscriber's advisory committee that consists of not less than five individuals who are elected by the subscribers, and who otherwise meet the requirements of (a) of this section.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.180. Subscribers' liability.

(a) 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.
(b) 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 the subscriber's policy was in force. The contingent liability may be at the rate of not less than one or more than ten times the premium deposit stated in the policy, and the maximum aggregate shall be computed in the manner set out in AS 21.75.190.
(c) Each assessable policy issued by the insurer must contain a statement of the contingent liability.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.190. Subscribers' liability on judgment.

(a) An action may not lie against a subscriber upon an obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for 30 days.
(b) The judgment shall be binding upon each subscriber only in the proportion which the subscriber's interest may appear and in an amount not exceeding the contingent liability of the subscriber, if any.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.200. Assessments.

(a) Assessments may from time to time be levied upon subscribers of a domestic reciprocal insurer liable under the terms of their policies by the attorney-in-fact upon approval in advance by the subscribers' advisory committee and the director; or by the director in liquidation of the insurer.
(b) Each subscriber's share of a deficiency for which an assessment is made, but not exceeding the aggregate contingent liability of the subscriber as stated in accordance with AS 21.75.180, 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 the period upon all policies subject to the assessment.
(c) In computing the earned premiums for the purposes of this section, the gross premium received by the insurer for the policy shall be used as a base, deducting only charges not recurring upon the renewal or extension of the policy.
(d) A subscriber may not have an offset against an assessment for which the subscriber is liable, on account of a claim for unearned premium or losses payable.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.210. Time limit for assessments.

A subscriber of a domestic reciprocal insurer having contingent liability is liable for and shall pay the subscriber's share of any assessment, as computed and limited under this chapter, if
(1) while the subscriber's policy is in force or within one year after its termination, the subscriber is notified by either the attorney-in-fact or the director of an intention to levy the 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 the subscriber's policy is in force or within one year after its termination.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.220. Aggregate liability.

A single policy or subscriber as to the policy may not 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 the policy during that year.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.230. Nonassessable policies.

(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital and surplus required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney-in-fact and as approved by the subscribers' advisory committee, the director shall issue a 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 as long as all the surplus remains unimpaired.
(b) Upon impairment of the surplus, the director shall immediately revoke the certificate. The revocation shall not render subject to contingent liability a policy then in force and for the remainder of the period for which the premium has theretofore been paid; but after the revocation a policy may not be issued or renewed without providing for contingent assessment liability of the subscriber.
(c) The director may not authorize a domestic reciprocal insurer 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 the liability of all its subscribers and in all the 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 those subscribers which may acquire the policies in that state, and need not extinguish the contingent liability applicable to policies theretofore in force in that state.
(d) Notwithstanding (a) - (c) of this section, a reciprocal insurer that provides marine insurance may issue policies that are nonassessable.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.240. Distribution of savings.

A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. The distribution may not unfairly discriminate between classes of risks, or policies, or between subscribers, but this does not prevent retrospective rating, or distribution on a retrospective plan, or distribution varying as to classes of subscribers based on the experience of the subscribers.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.250. Subscribers' share in assets.

Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of contributions of the attorney-in-fact or other persons to its surplus made as provided in AS 21.75.140, and the return of an unused premium, savings, or credits then standing on subscribers' account, shall be distributed to its subscribers who were subscribers within the 12 months before the last termination of its certificate of authority, according to a reasonable formula that the director may approve.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.260. Merger or conversion.

(a) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of its subscribers who vote on the merger after due notice and the approval of the director of the terms therefor, may merge with another reciprocal insurer or be converted to a stock or mutual insurer.
(b) The stock or mutual insurer is subject to the same capital or surplus requirements and has the same rights as a like domestic insurer transacting like kinds of insurance.
(c) The director may not approve a plan for a merger or conversion which is inequitable to subscribers, or which, if for conversion to a stock insurer, does not give each subscriber preferential right to acquire stock of the proposed insurer proportionate to the subscriber's interest in the reciprocal insurer as determined in accordance with AS 21.75.250 and a reasonable length of time within which to exercise the right.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 1. Reciprocal Insurers. › Sec. 21.75.270. Financial impairment; determination of insolvency.

(a) If the assets of a reciprocal insurer are at any time insufficient to discharge its liabilities, other than a liability on account of funds contributed by the attorney-in-fact or others, and to maintain the required surplus, its attorney-in-fact shall immediately 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 out in the subscriber's agreement.
(b) If the attorney-in-fact fails to make up the deficiency or to make the assessment within 30 days after the director orders the attorney-in-fact to do so, or if the deficiency is not fully made up within 60 days after the date the assessment was made, the insurer shall be considered insolvent and shall be proceeded against as authorized by this title.
(c) If liquidation of an insurer is ordered, an assessment shall be levied upon the subscriber for an amount, subject to limits as provided by this chapter, that the director determines to be necessary to discharge all liabilities of the insurer, exclusive of any funds contributed by the attorney-in-fact or other persons, but including the reasonable cost of the liquidation.
(d) If liquidation of a domestic reciprocal insurer is ordered, the receiver appointed under the order has a right to recover on behalf of the reciprocal insurer a payment in the form of a bonus, termination settlement, or extraordinary lump-sum compensation adjustment made by the reciprocal insurer or its subscribers to the attorney-in-fact if the distribution or payment is made during the 12 months preceding the order of liquidation, unless it can be shown that the payment was lawful and reasonable and that the reciprocal insurer did not know and, using due diligence, could not have known that the distribution might adversely affect the ability of the reciprocal insurer to fulfill its subscriber's contractual obligation.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 2. Cooperative Insurance Coverage. › Sec. 21.75.300. Cooperative insurance.

(a) The director shall, by regulation, provide a general plan for the implementation of cooperative insurance coverage limited to the risks defined in AS 21.75.330.
(b) The regulations adopted under (a) of this section must include
(1) procedures whereby not less than the number of persons required by AS 21.75.060(a) to organize a domestic reciprocal insurer may petition the director to initiate formation of a cooperative insurer;
(2) provision whereby the director may obtain information required to be provided by AS 21.75.060(b) to implement organization of a domestic reciprocal insurer;
(3) provision under which the petitioners shall describe the territory within which the plan of cooperative insurance shall operate;
(4) provision by which the director may obtain any additional information that the director considers reasonably necessary to determine whether the total amount initially at risk and its distribution permit a sound cooperative insurance operation;
(5) provision whereby the director, after indicating an intention to issue a certificate of authority to a cooperative insurer under AS 21.75.300 - 21.75.330, shall provide public notice for a period of not less than 30 days to provide nonsubscribing residents within the territory or adjacent geographical area an opportunity to subscribe to the plan of insurance; and
(6) provision by which, after the issuance of a certificate of authority, the cooperative insurer may receive applications from nonsubscribing residents of the territory or adjacent geographical area for inclusion within the insurer unless the application of the nonsubscribing resident is rejected by a majority vote of the members of the subscribers' advisory committee of the cooperative insurer.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 2. Cooperative Insurance Coverage. › Sec. 21.75.310. Certificate of authority of cooperative insurer.

If the director is satisfied that the plan of insurance and other information provided by petitioners under AS 21.75.300 permits a sound insurance operation and complies with all other applicable requirements for a certificate of authority, the director shall issue a certificate of authority to the insurer.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 2. Cooperative Insurance Coverage. › Sec. 21.75.320. Applicable provisions of law.

Except as otherwise specifically provided, the provisions of AS 21.75.010 - 21.75.270 and 21.75.900(2) and (3) are applicable to cooperative insurers.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 2. Cooperative Insurance Coverage. › Sec. 21.75.330. Coverage.

(a) A cooperative insurer organized under AS 21.75.300 is authorized to transact only property insurance, limited to physical damage of
(1) licensed private passenger motor vehicles;
(2) single-family residences, and related structures;
(3) multiple dwellings of not more than four-family units if at least one unit is owner-occupied, and related structures;
(4) mobile homes;
(5) commercial structures of not more than $100,000 value.
(b) Cooperative insurance coverage is limited to risks located or principally garaged within a geographic radius determined by the director to be within the ability of the insureds to control and have an influence over the level of loss.
2023 Alaska Statutes › Title 21. Insurance › Chapter 75. Reciprocal and Cooperative Insurers › Article 3. General Provisions. › Sec. 21.75.900. Definition.

In this chapter,
(1) “material transaction” means a transaction, other than a claim payment, involving more than one-half of one percent of the reciprocal insurer's admitted assets as of December 31 of the prior year;
(2) “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;
(3) “reciprocal insurer” means an unincorporated aggregation of subscribers operating individually and collectively through an attorney-in-fact to provide reciprocal insurance among themselves.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.010. Authority to establish joint insurance arrangements.

(a) Municipalities and their public corporations, city and borough school districts, and regional educational attendance areas may enter into cooperative agreements with each other for the purpose of establishing, operating, or participating in joint insurance arrangements through which the participating members agree to pool contributions in order to either assume risks from losses to the participants on a group basis or purchase coverage for the participants on a group basis.
(b) A joint insurance arrangement may be for any kind of insurance defined by this title except for health insurance, life insurance, and title insurance.
(c) A joint insurance arrangement shall be considered an alternative or supplement to any other policy or contract of insurance authorized or required by law, including insurance under AS 21.75.
(d) For purposes of AS 23.30.075, a joint insurance arrangement is considered to be an association duly authorized to transact workers' compensation insurance in the state.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.020. Regulation by division of insurance and annual report.

(a) A joint insurance arrangement may not be considered insurance for the purpose of any other law of the state and is not subject to regulations adopted by the director.
(b) By October 1 of each year, the administrator of a joint insurance arrangement shall prepare and deliver to the Legislative Budget and Audit Committee and the director a report showing the true and correct financial condition of the joint insurance arrangement. The report must
(1) be attested to by the administrator and the board of directors;
(2) include an analysis, certified by a member of the American Academy of Actuaries, of the sufficiency of the loss reserves; and
(3) be certified by a certified public accountant.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.030. General provisions of cooperative agreements.

A cooperative agreement must provide for the proper operation of the joint insurance arrangement and include provisions for
(1) administration of the arrangement by a board of directors, specifying the number of members of the board and other requirements necessary for the proper functioning of the board;
(2) appointment of an administrator and other persons as necessary for the proper functioning of the arrangement;
(3) organization of the arrangement, including a roster of participating members and the names of the members of the board of directors;
(4) procedures to establish and promote an aggressive risk management and program among the members of the arrangement, including procedures for identifying and reducing the risks that can be reduced through implementing better safety technologies and improved work techniques and procedures;
(5) enforcing the collection of contributions or payments in default from members of the arrangement;
(6) the addition of new members to the arrangement or the withdrawal of members from the arrangement;
(7) the method of apportioning costs and disposition of excess contributions;
(8) transmission of financial statements and audit reports of the arrangement to participating members;
(9) terminating the arrangement and disposing of its assets; and
(10) establishing and administering a joint insurance fund.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.040. Financial provisions of agreements.

(a) A cooperative agreement must include a provision requiring an annual determination by a casualty actuary who is a member of the American Academy of Actuaries that procedures for establishing reserves for losses of the joint insurance arrangement are actuarially sound.
(b) A joint insurance arrangement shall be subject to an annual independent audit. The audit shall be conducted in accordance with generally accepted auditing standards and must include a review of the actuarial assumptions used for establishing the reserves under (a) of this section. The audit report must include certification from a casualty actuary who is a member of the American Academy of Actuaries that the actuarial assumptions continue to be sound and the level of the reserves are adequate.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.070. Excess insurance.

A cooperative agreement may authorize the board of directors to purchase excess or catastrophic insurance on behalf of the joint insurance arrangement. The cost of the insurance shall be apportioned in the manner specified in the joint insurance agreement. The board may purchase insurance under this section only from an insurer authorized to do business in the state, except that an arrangement formed by municipalities or school districts may purchase insurance under this section from a risk-sharing pool established by a national association of similar entities if the risk-sharing pool meets the qualifications for an unauthorized insurer under AS 21.34.040(b) and (d) and 21.34.220 and has capital and policyholders surplus in an amount at least as great as would be required if the association were a domestic multiple line insurer. An arrangement may purchase insurance under this section for property and liability risks from unauthorized insurers allowed for use by licensed Alaska surplus lines brokers.
2023 Alaska Statutes › Title 21. Insurance › Chapter 76. Joint Insurance Arrangements › Sec. 21.76.080. Joint insurance fund.

(a) A joint insurance arrangement shall establish a joint insurance fund. The fund consists of money
(1) contributed by members of the joint insurance arrangement through budgetary appropriations or transfers from a self-insurance reserve;
(2) contributed by officers and employees of members of the joint insurance arrangement under an employee benefit plan; and
(3) collected by the joint insurance arrangement through subrogation of a claim paid from the fund to a member of the arrangement.
(b) An expenditure may be made from a joint insurance fund only to
(1) pay claims, losses, or benefits, including interest on them, and the administrative and adjustment expenses incurred in connection with them, involving the types of protection for which the fund provides coverage as specified in the joint insurance agreement;
(2) pay contractual obligations of a joint insurance fund established by a municipal joint insurance arrangement to the Alaska Municipal Bond Bank Authority or other lender; and
(3) purchase insurance coverage for members of a municipal joint insurance arrangement on a group basis.
(c) The administrator shall keep the fund separate from other funds of a member of a joint insurance arrangement.
(d) For each type of protection offered by the joint insurance arrangement, the method of accounting must show the order, source, date, and amount of each payment from the fund.
(e) Within 150 days of the end of the fiscal year, the administrator shall furnish a detailed report of the operation and condition of the fund to the board of directors and the director of the division of insurance.
(f) Money held by a fund as reserves and money not needed for daily operations may be invested by the board of directors.
(g) A fund may not be terminated unless the administrator certifies that an amount of money sufficient to pay accrued and contingent expenditures has been placed in a fully collateralized escrow account.