Chapter 431 — Chapter 431

§431:4-312 Members proxies. (a) A member of a domestic mutual insurer may vote in person or by proxy given another member on any matter coming before a corporate meeting of members. (b) No proxy shall be valid beyond the earlier of the following dates: (c) No member's vote upon a…

§431:4-313 Directors. (a) No individual shall be a director of a domestic mutual insurer by reason of the individual's holding public office (i.e. ex officio). (b) An individual is disqualified from being or acting as a director if such person:

§431:4-314 Limitation on expenses incurred in writing property and casualty. For any calendar year after its first two full calendar years of operation, no domestic mutual insurer, other than one issuing nonassessable policies, shall incur any costs or expense in the writing or a…

§431:4-315 Violation of expense limitation. (a) The officers and directors of an insurer violating section 431:4-314 shall be jointly and severally liable to the insurer for any excess of expenses incurred. (b) For failure or refusal of the insurer to exercise reasonable diligenc…

§431:4-316 Actions on officers' salaries. No action to recover, or no action on account of, any salary or other compensation due or claimed to be due any officer or director of a domestic mutual insurer, or on any note or agreement relative thereto, shall be brought against the i…

§431:4-317 Contingent liability of members. (a) Each member of a domestic mutual insurer, except as otherwise provided in this part, shall have a contingent liability, pro rata and not one for another, for the discharge of its obligations. The contingent liability shall be in suc…

§431:4-318 Accrual of liability. (a) If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum surplus, if any, required of it by this code as prerequisite for continuance of its certificate of authority, and the deficiency is not cured …

§431:4-319 Contingent liability as asset. Any contingent liability to assessment of members of a domestic mutual insurer does not constitute an asset of the insurer in any determination of its financial condition. [L 1987, c 347, pt of §2]

§431:4-320 Lien on reserves. As to life insurance, any portion of an assessment of contingent liability upon a policyholder which remains unpaid following notice of such assessment, demand for payment, and lapse of a reasonable waiting period as specified in such notice, may, if …

§431:4-321 Nonassessable policies. (a) A domestic mutual insurer, after it has established a surplus not less in amount than the minimum capital funds required of a domestic stock insurer to transact like classes of insurance, may extinguish the contingent liability of its member…

§431:4-322 Applies to all policies. The commissioner shall not authorize a domestic mutual insurer so to extinguish the contingent liability of any of its members or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its members …

§431:4-323 Revocation of authority. (a) The commissioner shall revoke the authority of a domestic mutual insurer to extinguish the contingent liability of its members if: (b) Upon revocation of such authority for any cause, the insurer shall not thereafter issue any policies with…

§431:4-324 Dividends. (a) The directors of a domestic mutual insurer may from time to time apportion and pay to its members dividends only out of that part of its surplus which is in excess of its required minimum surplus. (b) The dividends shall be paid or credited to policyhold…

§431:4-325 Nonparticipating policies. (a) If its bylaws so provide, a domestic mutual insurer may issue policies not entitled to participate in the insurer's savings and earnings, provided it is authorized to issue policies without contingent liability to assessment. (b) Such ins…

§431:4-326 Members' share of assets. (a) Upon the liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness and policy obligations shall be distributed to its members who were members within the thirty-six months prior to the last terminat…

PART IV. RECIPROCAL INSURERS §431:4-401 Application of other sections. The provisions of article 3, Insurers General Requirements, shall apply except where inconsistent with the express provisions of this article. [L 1987, c 347, pt of §2]

§431:4-402 Scope. Except where made expressly applicable to domestic reciprocal insurers, the provisions of this part shall apply to all authorized reciprocal insurers. [L 1987, c 347, pt of §2]

§431:4-403 Insuring powers of reciprocals. (a) Upon complying with the provisions of this part, a reciprocal insurer, as defined in section 431:3-108, may transact any class or classes of insurance defined by this code, other than life or accident and health or sickness insurance…

§431:4-404 Suits. A reciprocal insurer shall sue and be sued in its own name. [L 1987, c 347, pt of §2]

§431:4-405 Attorney. Attorney as used in this part refers to the attorney-in-fact of a reciprocal insurer. The attorney may be an individual, partnership, or corporation. The principal office of the attorney for a domestic reciprocal insurer shall be maintained within this State.…

§431:4-406 Power of attorney. (a) The rights and powers of the attorney of a reciprocal insurer shall be as provided in the power of attorney given it by the subscribers. (b) The power of attorney must set forth: (c) The power of attorney may: (d) The terms of any power of attorn…

§431:4-407 Modifications. Modification 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 and the subscribers' advisory committee. No modification shall be effective retroactively, nor as t…

§431:4-408 Organization of reciprocal insurers. Twenty-five or more persons domiciled in this State, may organize a domestic reciprocal insurer and, in compliance with this part, make application to the commissioner for a certificate of authority to transact insurance. [L 1987, c…

§431:4-409 Application for authority; declaration required. (a) When applying for a certificate of authority, the original subscribers and the proposed attorney shall fulfill the requirements of section 431:3-212, and execute and file with the commissioner a declaration setting f…

§431:4-410 Policies effective. Any policy applied for by an original subscriber shall become effective concurrently with the issuance of a certificate of authority to the reciprocal insurer. [L 1987, c 347, pt of §2]

§431:4-411 Attorney's bond. (a) Concurrently with the filing of the declaration provided for in section 431:4-409, the attorney of a domestic reciprocal shall file with the commissioner a bond in favor of this State. The bond shall be executed by the attorney and by an authorized…

§431:4-412 Deposit in lieu. In lieu of the bond, the attorney may maintain on deposit with the commissioner a like amount in cash or in value of securities qualified under this code as insurers' investments, and subject to the same conditions as the bond. [L 1987, c 347, pt of §2…

§431:4-413 Actions on bond. Action on the attorney's bond or to recover against any such deposit made in lieu thereof may be brought at any time by one or more subscribers suffering loss through a violation of the conditions thereof or by a receiver or liquidator of the insurer. …

§431:4-414 Subscribers. Any person may make application for, enter into agreement for and hold policies or contracts in or with, and be a subscriber of a domestic, foreign or alien reciprocal insurer. [L 1987, c 347, pt of §2]

§431:4-415 Subscribers' advisory committee. (a) The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt. (b) Not less than three-fourths of the committee shall be composed of subscriber…

§431:4-416 Subscriber's liability. (a) The liability of each subscriber subject to assessment for the obligations of the reciprocal insurer shall not be joint, but shall be individual and several. (b) Each subscriber who is subject to assessment shall have a contingent assessment…

§431:4-417 Subscriber's liability on judgments. (a) No action shall lie against any subscriber upon any obligation claimed against the insurer until a final judgment has been obtained against the insurer and remains unsatisfied for thirty days. (b) Any such judgment, or any judgm…

§431:4-418 Aggregate liability. No one policy or subscriber as to such policy shall be assessed or be 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 number of times the premi…

§431:4-419 Assessment. (a) Assessment may be levied from time to time upon the subscribers of a domestic reciprocal insurer, other than as to nonassessable policies, by the attorney upon approval in advance by the subscribers' advisory committee and the commissioner, or by the co…

§431:4-420 Time limit for assessment. Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay the subscriber's share of any assessment, as computed and limited in accordance with this part if:

§431:4-421 Nonassessable policies. (a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum paid-up capital stock and surplus required of a domestic stock insurer authorized to transact like classes of insurance, upon application of t…

§431:4-422 Contributions of surplus. The attorney or other parties may advance to the reciprocal insurer funds as it may require from time to time in its operations. Sums so advanced shall not be treated as a liability of the insurer, and shall not be withdrawn or repaid except o…

§431:4-423 Share in savings. A reciprocal insurer may from time to time return to its subscribers any savings or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but the distri…

§431:4-424 Subscriber's share of assets. Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions to its surplus made as provided in section 431:4-422, and the return of…

§431:4-425 REPEALED. L 1989, c 195, §42.

PART V. REORGANIZATION AND CONVERSION OF DOMESTIC INSURERS §431:4-501 Reorganization, merger or consolidation. (a) A domestic insurer may reorganize, merge or consolidate with another insurer subject to the provisions of this part, and subject to the following conditions: (b) Rei…

§431:4-502 Mutualization of stock insurers. (a) Any domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as are approved by the commissioner in advance of such mutualization. (b) The commissioner shall not approve any such plan, procedur…

§431:4-503 Conversion or reinsurance of mutual insurer. (a) No domestic mutual insurer shall be converted, changed, or reorganized as a stock corporation. (b) Such an insurer may be wholly reinsured in, its assets transferred to, and its liabilities assumed by another mutual or s…

§431:4-504 Merger or conversion of reciprocal insurer. (a) A domestic reciprocal insurer, upon affirmative vote of not less than two-thirds of the subscribers who vote upon such merger pursuant to such notice as may be approved by the commissioner and with approval of the commiss…

[ARTICLE 4A] CREDIT FOR REINSURANCE §431:4A-101 Credit allowed a domestic ceding insurer. (a) Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requi…

§431:4A-102 Asset or reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer. (a) An asset or reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 431:4A-101 sha…

§431:4A-104 Rules. (a) The commissioner may adopt rules pursuant to chapter 91 implementing this article. (b) The commissioner may adopt rules applicable to reinsurance arrangements as follows:

§431:4A-105 REPEALED. L 2014, c 234, §3.

§431:4F-103 Authorization of entry. (a) An alien insurer may use this State as a state of entry to transact insurance in the United States through a United States branch by: (b) Before authorizing the entry of a United States branch of any alien insurer through this State, the co…

ARTICLE 5 FINANCIAL CONDITION PART I. STANDARDS §431:5-101 Impairment of capital. (b) The insurer may cure the deficiency by assessment of stockholders, by action of its board of directors, or by other lawful means. The deficiency shall be cured: (c) Shares as to which such an as…