2004 Minnesota Statutes

     66A.15 Assessments.  

    Subdivision 1.    Mutual fire insurance companies.  
 When the net assets of any mutual insurance company are 
 insufficient for the payment of incurred losses and expenses 
 above its unearned premium reserve, as provided by law, it shall 
 make an assessment for the amount required ratably upon its 
 members liable thereto.  The order for assessment shall be duly 
 entered upon its records, with a statement of its condition at 
 the date thereof, including all cash assets, deposit notes, and 
 contingent amount liable to the assessment, the amount of the 
 assessment, and the particular losses or other liabilities for 
 which it is made.  This record shall be signed by each director 
 voting for the order before any part of the assessment is 
 collected and any person liable thereto may inspect and take a 
 copy thereof.  

    The commissioner may by written order relieve the company 
 from an assessment or other proceedings to restore the assets 
 during the time fixed in the order, when the deficiency does not 
 exceed ten percent of its admitted assets.  

    When, by reason of depreciation, loss, or otherwise, the 
 net assets, after providing for other debts, are less than the 
 required premium reserve upon policies the deficiency shall be 
 restored by assessment, as provided in this subdivision, notice 
 of which shall be filed with the commissioner.  When the board 
 of directors or the commissioner shall be of the opinion that 
 the insolvency of any company is probable, the board or, upon 
 its failure so to do, the commissioner may order two assessments 
 made, the first to determine what each policyholder should 
 equitably pay or receive in case of withdrawal from the company 
 and cancellation of the policy; the second, such further sum as 
 each should pay to reinsure the unexpired term at the same rate 
 as the first insurance.  The directors shall forthwith cause 
 written notice and demand of payment to be served personally or 
 by mail upon each policyholder subject thereto.  

    After adjustment of the first assessment, every policy upon 
 which the second assessment shall not be paid shall be canceled; 
 but in no case shall there be credited upon a policy more than 
 if canceled by the board of directors under the bylaws.  If, 
 within two months after the last assessment is payable, the 
 amount of the policies whose holders have paid the same is less 
 than $500,000, all other policies shall be void and the company 
 shall continue only for the purpose of adjusting the deficiency 
 or excess of premiums and settling outstanding claims.  No 
 assessment shall be valid against a policyholder who has not 
 been duly notified thereof in writing within one year after the 
 expiration or cancellation of the policy.  

    Subd. 2.    Casualty companies.  All policies issued by 
 such companies shall provide for a premium or premium deposit 
 payable in cash and, except as herein provided, for a contingent 
 liability of the members at least equal to the premium or 
 premium deposit as adjusted by audit, if any.  If at any time 
 the admitted assets are less than the reserves and other 
 liabilities, the company shall immediately collect upon policies 
 with a contingent liability a sufficient proportionate part 
 thereof to restore such assets and the commissioner may, when 
 such deficiency does not exceed ten percent of its admitted 
 assets, by written order direct that proceedings to restore such 
 assets be deferred during the period of time fixed in such 
 order.  The contingent liabilities, if any, of the policyholders 
 shall be plainly and legibly stated in every policy in terms of 
 either dollars or premiums.  

    HIST: 1967 c 395 art 7 s 15; 1986 c 444