2023 New York Laws › ISC - Insurance › Article 42 - Life Insurance Companies and Accident and Health Insurance Companies and Legal Services Insurance Companies › 4209 - Mutual Life Insurance Companies, Mutual Accident and Health Insurance Companies; Assessments.

§  4209.  Mutual  life insurance companies, mutual accident and health
insurance companies;  assessments.  (a)  (1)  No  domestic  mutual  life
insurance  company shall issue any policy of life or accident and health
insurance or any annuity contract  providing  for  the  payment  of  any
assessment  by  any  policyholder  or  member in addition to the regular
premium or consideration charged therefor; nor shall  any  such  company
have power to levy or collect any such assessment.
(2)  No  foreign  or alien life insurance company shall do business in
this state if it does business anywhere on any assessment plan.
(b) (1) Except as provided in subsection (c)  hereof,  every  domestic
mutual  accident  and  health  insurance  company  shall  provide in its
policies that every  member  shall  be  liable  for  an  assessment,  in
addition  to  the  amount  of premiums paid or payable, in an amount not
exceeding the maximum named therein, which shall be not  less  than  one
annual  premium  on the policy; if the assessment liability is unlimited
the policy shall so provide.
(2) If any domestic mutual accident and health insurance company  does
not  have  admitted  assets  at  least  equal  to  the  aggregate of its
liabilities, reserves and  its  minimum  surplus  as  required  by  this
chapter, and if such impairment is not otherwise rectified, the board of
directors  of  such company may, with the approval of the superintendent
and within such time as he prescribes, order an assessment as  specified
in  its  by-laws  for  an  amount which will provide sufficient funds to
rectify such impairment, except that no member of such company shall  be
liable for an assessment exceeding the limit specified in his policy.
(3)   All   such   orders  of  assessment  shall  be  filed  with  the
superintendent and shall not take effect unless and  until  approved  by
him.  The  superintendent  may  refuse  any  such  approval  if,  in his
judgment,  such  refusal  will  best  promote  the  interests   of   the
policyholders and creditors of such company, and of the insuring public.
Such  assessment  shall  be  made  upon all members liable to assessment
therefor in proportion to their several liabilities.
(4) Every person who was a member of such company at any  time  during
two  years prior to the making of an order of assessment by the board of
directors shall pay his proportionate part of any such assessment if  he
is  notified  of  such assessment within one year after the making of an
order of assessment. A member's proportionate  part  of  any  assessment
shall  be  determined  by applying to the premium earned on the member's
policy or policies during the period to be covered by the assessment the
ratio of the total assessment to the total premiums earned  during  such
period on all policies subject to assessment.
(c)  Every mutual accident and health insurance company licensed to do
business in this state, if its charter or by-laws permit or are  amended
to  permit  the issuance of policies without contingent mutual liability
of the policyholders for assessment, may  with  the  permission  of  the
superintendent  issue  non-assessable policies in this state. Every such
company shall submit a copy of its  proposed  non-assessable  policy  or
policies for approval of the superintendent, and shall have obtained his
approval  thereof. Every policy issued by any such company shall clearly
state whether or not the holder of such policy is subject to a liability
for assessment.
(d) (1) Any foreign mutual accident and health insurance company which
complies with the requirements of subsection (c) hereof for the issuance
of non-assessable policies may do an insurance business  in  this  state
without complying with the requirements of subsection (b) hereof.
(2)  No  such  company  which does not comply with the requirements of
subsection (c) hereof shall do  an  insurance  business  in  this  state
unless  its  by-laws  and  its  policies  issued  in  this state contain

provisions for the levying and collection of assessments  upon  members,
at  least  for  the  payment  of  losses  and expenses, which conform in
substance to the requirements of subsection (b) hereof.