2023 New York Laws › ISC - Insurance › Article 74 - Rehabilitation, Liquidation, Conservation and Dissolution of Insurers › 7430 - Levy of Assessments; Determination of Liability of Members.

§  7430.  Levy  of assessments; determination of liability of members.
(a) Within three years from the date of an order  of  rehabilitation  or
liquidation  of  a  domestic  mutual  insurer filed in the office of the
clerk of the county in which the insurer had its principal  office,  the
superintendent may make a report to the court setting forth:
(1) the reasonable value of the insurer's assets;
(2) its probable liabilities; and
(3)  the  probable  necessary  assessment, if any, to pay all possible
claims and expenses in full, including expenses of administration.
(b) (1) Upon the basis of such report, including any  amendments,  the
court, ex parte, may levy one or more assessments against all members of
such  insurer  who, as shown by the records of the company, were members
at any time within one year prior to the date of  the  issuance  of  the
order  to show cause under section seven thousand four hundred seventeen
of this article.
(2) The assessments shall cover the excess of the  insurer's  probable
liabilities  over  the  reasonable value of its assets and the estimated
cost of collection and percentage of uncollectibility thereof.
(3) The total assessments against  any  member  with  respect  to  any
policy,  whether  levied  by the board of directors of such insurer, the
superintendent in liquidation or  rehabilitation  of  such  insurer,  or
otherwise,  and  whether  levied  to make good an impairment of required
minimum surplus or for any other purpose under this  chapter,  shall  be
for no greater amount than that specified in the by-laws and policies of
that  member  and  may  be  limited  as  prescribed in subsection (a) of
section four thousand one hundred eleven of this  chapter.  However,  if
the  court  finds that such policy was issued at a rate of premium below
the minimum rate lawfully permitted for the risk insured, the court  may
determine  the  upper  limit  of  such  assessment  upon the basis of an
adequate rate for such insurance.
(4) No such assessment shall be levied against any member with respect
to any non-assessable policy issued in accordance with the laws of  this
state.
(c)  Thereafter,  upon  the filing of a further detailed report by the
superintendent, the court shall issue an order directing each member  of
such  insurer if he shall not pay the amount assessed against him to the
superintendent on or before a day to be specified in said order, to show
cause why he should not be held liable to pay such  assessment  together
with   costs  as  set  forth  in  subsection  (e)  hereof  and  why  the
superintendent should not have judgment therefor.
(d) The superintendent shall at least twenty days  before  the  return
day  of  the  order  cause  a notice of such order setting forth a brief
summary of the contents of such order to be published in such manner  as
shall  be  directed  by  the court and mailed to each member at his last
known address appearing on the records of the insurer, or  at  his  last
known address, if no address so appears.
(e)  On  the  return  day  of such order to show cause, if such member
shall not appear and serve verified objections upon the  superintendent,
the  court  shall make an order adjudging that such member is liable for
the amount of such  assessment  together  with  ten  dollars  costs  and
directing  that  the  superintendent  may have judgment therefor. If the
member  shall  appear   and   serve   verified   objections   upon   the
superintendent  there  shall  be  a  full  hearing before the court or a
referee to hear and determine, who, after such hearing,  shall  make  an
order  either  negativing  the  liability  of  such  member  to  pay the
assessment or directing that the superintendent may  have  judgment  for
the  whole  or some part of the assessment and twenty-five dollars costs
and necessary disbursements incurred at such hearing.
(f) A judgment upon any such order, whether  granted  by  a  court  or
referee,  shall  have  the same force and effect, and may be entered and
docketed, and may be appealed from as  if  it  were  a  judgment  in  an
original action brought in the court in which the proceeding is pending.