2023 New York Laws › ISC - Insurance › Article 66 - Co-Operative Property/casualty Insurance Companies › 6605 - Organization of Assessment Corporations.

§  6605.  Organization  of  assessment corporations. (a) An assessment
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,  seven  and  eight  of such subsection solely in
conjunction with fire  insurance  written  under  the  same  policy  and
covering  the  same  premises  and  insurance  against loss or damage to
property caused by aircraft or vehicles in compliance with the following
prerequisites:
(1) It shall have not less than two hundred bona fide applications for
insurance of such kind or kinds on  real  property  located  within  the
territory in which it desires to be licensed as above provided, and from
not  less  than  two  hundred  separate  applicants  who shall have paid
advance payments  of  estimated  annual  assessments  of  at  least  two
thousand  dollars  for  insurance  aggregating not less than two hundred
thousand dollars in each county of such territory and each member  shall
be  subject  to  assessments,  in addition to required advance payments,
sufficient to meet incurred losses, expenses and other legal obligations
for such insurer.
(2) It shall have a cash  organization  fund  of  not  less  than  one
hundred fifty 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 one hundred thousand dollars. For an assessment corporation
licensed to do the kinds of insurance specified  in  paragraph  nine  of
subsection  (a)  of  section  one  thousand one hundred thirteen of this
chapter, except as herein provided, the  corporation  must  maintain  an
additional  surplus of fifty thousand dollars. The additional surplus is
not necessary if the whole risk  for  this  peril  is  reinsured  in  an
insurance  company  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.
(3)  Any assessment corporation licensed on the effective date of this
article which does not possess surplus of one hundred  thousand  dollars
shall  be restricted to the kinds of insurance for which it was licensed
immediately prior to the effective date of this article until such  time
as  the  required  minimum  surplus  specified in paragraph two above is
accumulated. In no event shall the  surplus  of  such  corporation  fall
below fifty thousand dollars.
(b)  (1) Any licensed assessment corporation may amend its charter and
be licensed to do the kinds of insurance specified in  paragraphs  nine,
thirteen,  fourteen and fifteen (except workers' compensation insurance)
of subsection (a) of section one thousand one hundred thirteen  of  this
chapter solely in conjunction with fire insurance written under the same
policy  and  covering the same premises, except as provided in paragraph
two of this subsection, and may be licensed to do the kinds of insurance
specified in paragraphs twelve, nineteen  (excluding  aircraft  physical
damage insurance) and twenty (inland marine only) of such subsection.
(2) An assessment corporation licensed to write the kinds of insurance
specified  in  paragraphs  thirteen  and  fourteen  of subsection (a) of
section one thousand one hundred thirteen of this chapter is  authorized
to write personal or commercial umbrella liability insurance.
(c)  An  assessment  corporation may also be organized and licensed in
the manner prescribed in section six thousand six hundred three of  this
article  to do within all the counties of the state (except the counties
of New York, Kings, Queens, Bronx and Richmond) as an assuming  insurer,

reinsurance  business  of  a  kind or kinds referred to in this section,
and, as specified in its  charter,  on  compliance  with  the  following
prerequisites:
(1)  It  shall  have  not  less  than  ten  bona fide applications for
reinsurance of such kind or kinds on real property located  within  such
counties,  and  from  not  less  than  ten  separate applying assessment
corporations of this state providing for the payment of advance payments
in the form of  estimated  annual  assessments  of  not  less  than  ten
thousand  dollars, and providing that each such ceding insurer shall, as
a member of such assuming insurer, be subject to additional  assessments
sufficient to meet incurred losses, expenses and other legal obligations
for such insurer.
(2)  It  shall  comply  with  the  financial requirements set forth in
paragraph two of subsection (a) of this section.
(3) Such a corporation shall, pursuant to such license,  do  only  the
business  of  reinsurance,  and  may not at any time qualify as a direct
writing assessment corporation.
(d) An assessment corporation licensed to write the kinds of insurance
specified in paragraphs thirteen  and  fourteen  of  subsection  (a)  of
section  one thousand one hundred thirteen of this chapter authorized to
write personal or commercial umbrella liability insurance shall maintain
an additional surplus of six hundred thousand dollars if the corporation
writes personal or commercial umbrella liability insurance.
(e) Nothing in this  section  shall  prohibit  a  licensed  assessment
corporation  from  writing coverage pursuant to subsection (a) or (b) of
this section for any leaseholder of the premises.