Title 58, INSURANCE

A reciprocal insurer shall: (1) Have and use a business name. The name shall include the word "reciprocal," or "interinsurer," or "interinsurance," or "exchange," or "underwriters," or "underwriting." (2) Sue and be sued in its own name. Source: SL 1966, ch 111 , ch 19, § 5.

A domestic reciprocal insurer formed after June 30, 1966, may be authorized to transact insurance if it has otherwise complied with the applicable provisions of this title and has and thereafter maintains surplus funds as follows: (1) To transact property insurance, surplus of no…

In addition to surplus required to be maintained under § 58-34-14 , a domestic reciprocal insurer formed after June 30, 1966, shall have, when first authorized to transact insurance, expendable surplus equal to not less than one - half of the minimum amount of surplus required to…

A domestic reciprocal insurer may be authorized to transact additional kinds of insurance if it has otherwise complied with the provisions of this title therefor and possesses and maintains surplus funds not less in amount than the minimum capital stock required of a domestic sto…

A domestic reciprocal insurer, which held a valid certificate of authority to transact business in this state immediately prior to July 1, 1966, is governed, as to surplus required to be maintained, by §§ 58-6-27 and 58-6-28 . Source: SL 1966, ch 111 , ch 19, § 8 (1).

The certificate of authority of a reciprocal insurer shall be issued to its attorney in the name of the insurer. Source: SL 1966, ch 111 , ch 19, § 9 (1).

The director may refuse, suspend, or revoke the certificate of authority, in addition to other grounds therefor, for failure of the attorney to comply with any provision of this title. Source: SL 1966, ch 111 , ch 19, § 9 (2).

A "reciprocal insurer" means an unincorporated aggregation of subscribers operating individually and collectively through an attorney in fact to provide reciprocal insurance among themselves. Source: SL 1966, ch 111 , ch 19, § 2.

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. Source: SL 1966, ch 111 , ch 19, § 10 (1).

The power of attorney described in § 58-34-20 must set forth: (1) The powers of the attorney; (2) That the attorney is empowered to accept service of process on behalf of the insurer and to authorize the director to receive service of process in actions against the insurer upon c…

The terms of any power of attorney or agreement collateral thereto shall be fair and equitable, and no such power or agreement shall be effective as to a domestic reciprocal insurer until approved by the director. Source: SL 1966, ch 111 , ch 19, § 10 (3).

Legal process shall be served upon a domestic reciprocal insurer by serving the insurer's attorney at his principal offices or by serving the director as the insurer's process agent under § 58-6-39 . Source: SL 1966, ch 111 , ch 19, § 15 (1).

Any judgment based upon legal process so served shall be binding upon each of the insurer's subscribers as their respective interests may appear, but in an amount not exceeding their respective contingent liabilities, if any, the same as though personal service of process was had…

Individuals, partnerships, associations, and corporations, public or private, of this state, hereby designated as subscribers, are authorized to exchange reciprocal or interinsurance contracts with each other, or with individuals, partnerships, associations, and corporations, pub…

Any corporation now or hereafter organized under the laws of this state shall, in addition to the rights, powers, and franchises specified in its articles of incorporation have full power and authority to exchange insurance contracts of the kind and character mentioned in § 58-34…

Any officer, representative, trustee, receiver, or legal representative of any such subscriber shall be recognized as acting for or on its behalf for the purpose of such contract but shall not be personally liable upon the contract by reason of acting in such representative capac…

The advisory committee of a domestic reciprocal insurer exercising the subscribers' rights shall be selected under such rules as the subscribers adopt. Source: SL 1966, ch 111 , ch 19, § 20 (1).

Not less than two - thirds of the advisory committee of a domestic reciprocal insurer shall be subscribers other than the attorney, or any person employed by, representing, or having a financial interest in the attorney. Source: SL 1966, ch 111 , ch 19, § 20 (2).

"Attorney," as used in this chapter, refers to the attorney in fact of a reciprocal insurer. The attorney may be an individual, firm, or corporation. Source: SL 1966, ch 111 , ch 19, § 6.

The advisory committee of a domestic reciprocal insurer shall: (1) Supervise the finances of the insurer; (2) Supervise the insurer's operations to such extent as to assure conformity with the subscribers' agreement and power of attorney; (3) Procure the audit of the accounts and…

Modifications 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 such modification shall be effective until approved by the director. Source: SL …

A reciprocal insurer may, upon qualifying therefor as provided for by this title, transact any kinds of business defined by this title, other than life or title insurance. Source: SL 1966, ch 111 , ch 19, § 4 (1).

A reciprocal insurer may purchase reinsurance, and may grant reinsurance as to any kind of insurance it is authorized to transact. Source: SL 1966, ch 111 , ch 19, § 4 (2).

The attorney or other parties may advance to a domestic reciprocal insurer upon reasonable terms such 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, except upon liquidation of the insurer, sha…

The liability of each subscriber, other than as to a nonassessable policy, for the obligations of the reciprocal insurer shall be an individual, several and proportionate liability, and not joint. Source: SL 1966, ch 111 , ch 19, § 21 (1).

Except as to a nonassessable policy, each subscriber shall have a contingent assessment liability, in the amount provided for in the power of attorney or in the subscribers' agreement, for payment of actual losses and expenses incurred while his policy was in force. Such continge…

Each assessable policy issued by the insurer shall contain a statement of the contingent liability, set in type of the same prominence as the insuring clause. Source: SL 1966, ch 111 , ch 19, § 21 (3).

Assessments may be levied upon subscribers of a domestic reciprocal insurer liable therefor under the terms of their policies by the attorney upon approval by the subscribers' advisory committee and the director; or by the director in liquidation of the insurer. Source: SL 1966, …

Each subscriber's share of a deficiency for which an assessment is made, but not exceeding in any event his aggregate contingent liability as provided by this chapter, shall be computed by applying to the premium earned on the subscriber's policy or policies during the period to …

All authorized reciprocal insurers shall be governed by those sections of this chapter not expressly made applicable to domestic reciprocals. Source: SL 1966, ch 111 , ch 19, § 3 (1).

In computing the earned premiums for the purposes of § 58-34-39 , the gross premium received by the insurer for the policy shall be used as a base, deducting therefrom solely charges not recurring upon the renewal or extension of the policy. Source: SL 1966, ch 111 , ch 19, § 23 …

No subscriber shall have an offset against any assessment for which he is liable, on account of any claim for unearned premium or losses payable. Source: SL 1966, ch 111 , ch 19, § 23 (4).

Every subscriber of a domestic reciprocal insurer having contingent liability shall be liable for, and shall pay his share of any assessment, as computed and limited in accordance with this chapter, if: (1) While his policy is in force or within one year after its termination, he…

No one policy, or subscriber of such policy, shall be assessed or 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 amount provided for in the power of attorney or in the subscr…

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. Source: SL 1966, ch 111 , ch 19, § 22 (1).

Any such judgment shall be binding upon each subscriber only in such proportion as his interest may appear and in an amount not exceeding his contingent liability, if any. Source: SL 1966, ch 111 , ch 19, § 22 (2).

If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock required of a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory comm…

The director shall not authorize a domestic reciprocal insurer so to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its subscribers and in all such policies for…

Upon impairment of the surplus required by § 58-34-46 , the director shall forthwith revoke the certificate of authority to extinguish the contingent liability of subscribers. Such revocation shall not render subject to contingent liability any policy then in force and for the re…

A reciprocal insurer may from time to time return to its subscribers any unused premiums, savings, or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks, or policies, or between subscribers, but this shall not preven…

Authorized reciprocal insurers existing on July 1, 1966, shall after said date comply with the provisions of this chapter, and shall make such amendments to their subscribers' agreements, power of attorney, policies, and other documents and accounts and perform such other acts as…

Upon the liquidation of a domestic reciprocal insurer, its assets remaining after discharge of its indebtedness and policy obligations, the return of any contributions of the attorney or other persons to its surplus made as provided in § 58-34-34 , and the return of any unused pr…

The annual statement of a reciprocal insurer shall be made and filed by its attorney. Source: SL 1966, ch 111 , ch 19, § 17 (1).

The annual statement of a reciprocal insurer shall be supplemented by such information as may be required by the director relative to the affairs and transactions of the attorney in so far as they relate to the reciprocal insurer. Source: SL 1966, ch 111 , ch 19, § 17 (2).

In determining the financial condition of a reciprocal insurer the director shall apply the rules set forth in §§ 58-34-54 to 58-34-60 , inclusive. Source: SL 1966, ch 111 , ch 19, § 18.

All premium deposits delinquent less than ninety days shall be allowed as assets. Source: SL 1966, ch 111 , ch 19, § 18 (4).