2023 New York Laws › ISC - Insurance › Article 61 - Reciprocal Insurers and Lloyds Underwriters › 6109 - Subscriber's Operating Reserve.

§ 6109. Subscriber's operating reserve. (a) (1) Every subscriber of an
authorized  reciprocal  insurer  in  which  subscribers  are  subject to
contingent liability shall accumulate a minimum operating reserve, to be
credited to such subscriber on the books and records of such  reciprocal
insurer,  by  authorizing the attorney-in-fact to credit to such account
at the end of the fiscal year of such reciprocal insurer, an amount  not
less  than one quarter of such subscriber's underwriting earnings during
such period.
(2) Such accumulation shall be  made  so  long  as  such  subscriber's
operating  reserve  is  less than twice the amount of annual premiums in
force.
(3)  Notwithstanding  the  foregoing,  the  superintendent  may,  upon
application from the attorney-in-fact:
(A) approve other methods for accumulating such subscriber's operating
reserve; or
(B) permit the suspension of the accumulation of the operating reserve
for  a  fiscal  year  provided  that  those earnings are returned to the
subscriber in accordance with  subparagraph  (B)  of  paragraph  two  of
subsection (c) of this section; or
(C)  in  the  case  of  a  municipal reciprocal insurer, authorize the
return of any outstanding subscriber operating reserve balance upon  the
municipal   reciprocal  insurer's  demonstration  that  it  will  retain
sufficient surplus to support its obligations and writings.
(b) Any authorized reciprocal insurer may, pursuant to  the  terms  of
the  subscriber's  agreement and to any action of its advisory committee
authorized   thereunder,   require   its   subscribers   to   accumulate
subscriber's  operating  reserves  in excess of the minimum specified in
subsection (a) of this section and may require a longer period of notice
for the withdrawal of all or any part of such reserve than  that  herein
specified.
(c)  (1) No subscriber shall have a secured or preferred claim against
any assets of the reciprocal  insurer  arising  out  of  such  operating
reserve,  but all assets held by such insurer shall be available for the
payment of claims of policyholders  and  creditors  of  such  reciprocal
insurer  in  preference  to  any claim for withdrawal by a subscriber as
such.
(2)  Any  subscriber's  operating  reserve  accumulated  by  any  such
reciprocal insurer shall be maintained at all times, except that:
(A) a subscriber may, upon withdrawal from membership and cancellation
of  all  insurance contracts held by the subscriber in such insurer, and
after giving to the attorney-in-fact written  notice  of  withdrawal  at
least  sixty  days  in  advance, withdraw the amount of the subscriber's
operating reserve  less  such  surrender  charges  as  may  be  deducted
pursuant to the subscriber's agreement; or
(B) where the superintendent has determined that the suspension of the
accumulation   of   the  operating  reserve  would  not  be  harmful  to
policyholders or the people of this state, the attorney-in-fact may,  in
the  fiscal  year  following  the  year  for which the suspension of the
accumulation of the operating reserve was  authorized,  return  to  each
subscriber  an amount equal to the underwriting earnings that would have
otherwise been credited to the subscriber's operating reserve.
(3) No withdrawal shall be permitted after an order of liquidation of,
or the appointment of a receiver or liquidating trustee  for,  any  such
reciprocal insurer or, notwithstanding any other provision of law to the
contrary,  where  there  is  an  authorized  control  level  event  or a
mandatory control level event as defined  in  section  thirteen  hundred
twenty-four of this chapter.