20-717. Contingent liability of mutual insurer members

133 words·~1 min read·/az/title-20/20-717

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A. Each member of a domestic mutual insurer shall, except as otherwise provided in this article with respect to nonassessable policies, have a contingent liability, pro rata and not one for another, for the discharge of its obligations, which contingent liability shall be in such maximum amount as it stated in the insurer's articles of incorporation.

B. Each policy issued by the insurer shall contain a statement of the contingent liability, if any, of its members.

C. Termination of the policy of any such member shall not relieve the member of contingent liability for his proportion, if any, of the obligations of the insurer which accrued while the policy was in force.

D. Unrealized contingent liability of members does not constitute an asset of the insurer in any determination of its financial condition.