AI-assisted research summary: Certain mutual fire or casualty insurers may limit policyholder assessment liability and issue nonassessable policies only if they meet specified reserve and deposit requirements.
Any mutual fire or casualty insurance company organized under the laws of this state, which charges a full cash premium, may limit the liability of policyholders to assessment by a stipulation in the policy, which shall have the same effect as a deposit note signed by the insured; but such contingent liability of a member shall not be less than an amount equal to and in addition to the cash premium written in his policy. Any such mutual fire insurance company, from and after May 20, 1941, and any such mutual casualty insurance company, from and after January 1, 1943, may issue nonassessable policies in this state upon compliance with the following requirements: I. It shall have and at all times maintain a surplus to policyholders as determined from its latest annual statement on file, which together with 30 percent of its unearned premium reserve is at least equal to the minimum capital required for the organization of a domestic stock insurance company to do the same kind or kinds of insurance. Provided that this additional requirement shall not apply to those mutual fire or casualty companies organized under the laws of this state which are lawfully authorized to issue nonassessable policies in this state and are in fact issuing such nonassessable policies in this state on May 1, 1969. Provided further that this additional requirement of surplus to policyholders may be reduced by the commissioner to a sum not less than the amount of the deposit required under paragraph II as to any domestic mutual fire or casualty company in existence on May 1, 1969, whenever the commissioner finds that such mutual company will, under the circumstances, be safe, reliable and entitled to confidence. II. Mutual companies formed to do business under RSA 401:1, I and II, shall maintain a deposit with the insurance commissioner of $300,000 and mutual companies formed to do business under RSA 401:1, IV, V, VI or VII shall maintain a deposit with the insurance commissioner of $500,000 in cash or in securities which are legal investments for savings banks and in such other investments as may be approved by the insurance commissioner. III. A mutual fire or casualty insurance company shall issue nonassessable policies only so long as it maintains these financial requirements and if it fails to maintain these requirements it shall not thereafter issue nonassessable policies in this state for one year from the time when its surplus, unearned premium reserve and deposit again meet the financial requirements of this section. IV. Every policy issued by any such company shall clearly state whether or not the holder of such policy is subject to liability for assessment. Any policy issued by any such company which subjects the policyholder to liability for assessment shall contain a clear statement of the liability of the policyholder for the payment of his proportionate share of any deficiency or impairment as provided by law within the limit established by the policy, and shall further state that any assessment shall be for the exclusive benefit of holders of policies which provide for such contingent liability; and the holders of such policies shall not be liable to assessment in an amount greater in proportion to the total deficiency than the ratio that the deficiency attributable to the assessable business bears to the total deficiency. Source: Source. 1887, 35:1. PS 168:2. 1917, 30:1. PL 273:2. 1929, 104:1. 1941, 122:1. RL 323:2. RSA 402:2. 1969, 283:3. 1981, 431:1, eff. Aug. 22, 1981.