Subdivision 1. Determination.
When any loss shall be ascertained which exceeds in amount
the cash funds of the company, the secretary, or, in the secretary's absence, the president, shall
convene the directors, who shall levy an assessment upon each policyholder for the proportionate
amount to be paid to cover this excess; or the company may borrow not to exceed two mills on
each dollar of insurance written by it and then in force, and from this fund pay these losses, and
afterwards levy assessments to pay the loans.
If the fund for the payment of expenses is insufficient, the amount of the deficiency may be
added to any assessment.
Subd. 1a. Advance premiums or assessments.
The directors of a company may collect an
advance premium or an assessment for the purpose of maintaining surplus funds in its treasury
to be used in payment of losses or expenses.
Subd. 2. Secretary's duties.
It shall be the duty of the secretary or chosen manager, after the
assessment is completed, to immediately notify every person composing the company, by letter
sent to the person's usual post office address, of the amount of the loss, and the sum due as the
person's share thereof, and of the time when and to whom the payment is to be made, but this time
shall not be less than 60, nor more than 90, days from the date of the notice, and every person
designated to receive this money may demand and receive two percent in addition to the amount
due on the assessment, as aforesaid, for fees in receiving and paying over the same.
Subd. 3. Member subject to suit and directors' liability.
Suits at law may be brought
against any member of the company who refuses or neglects to pay any assessment. The articles
may eliminate or limit a director's personal liability to the company or its members for monetary
damages for breach of fiduciary duty as a director. The articles shall not eliminate or limit the
liability of a director:
(1) for breach of loyalty to the company or its members;
(2) for acts or omissions made in bad faith or with intentional misconduct or knowing
violation of law;
(3) for transactions from which the director derived an improper personal benefit; or
(4) for acts or omissions occurring before the date that the provisions in the articles
eliminating or limiting liability become effective.
History: 1967 c 395 art 8 s 17; 1975 c 15 s 14; 1986 c 444; 1989 c 130 s 5,6