§386-207 Deficits and insolvencies.
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§386-207 Deficits and insolvencies.
(a)If the assets of a group are at any time insufficient to enable the group to discharge its legal liabilities and other obligations and to maintain the reserves required of it under this chapter, the group shall forthwith make up the deficiency or levy an assessment upon its members for the amount needed to make up the deficiency.
(b)In the event of a deficiency in any fund year, the deficiency shall be made up immediately, either from:
(1)Surplus from a fund year other than the current fund year;
(2)Administrative funds;
(3)Assessment of the membership, if ordered by the group; or
(4)An alternate method as the insurance commissioner may approve or direct.
The insurance commissioner shall be notified prior to any transfer of surplus funds from one fund year to another.
(c)If the group fails to assess its members or to otherwise make up the deficit within thirty days, the insurance commissioner shall order it to do so.
(d)If the group fails to make the required assessment of its members within thirty days after the insurance commissioner orders it to do so or if the deficiency is not fully made up within sixty days after the date on which the assessment is made or within a longer period of time as may be specified by the insurance commissioner, the group shall be deemed to be insolvent.
(e)The insurance commissioner shall proceed against an insolvent group in the same manner as the insurance commissioner would proceed against an insolvent domestic insurer in this State as prescribed in chapter 431, article 15. The insurance commissioner shall have the same powers and limitations in the proceedings as are provided under those laws, except as otherwise provided in this chapter.
(f)In the event of the liquidation of a group, the insurance commissioner shall levy an assessment upon its members for an amount as the insurance commissioner determines to be necessary to discharge all liabilities of the group, including the reasonable cost of liquidation. [L 1986, c 304, pt of §1; am L 1990, c 34, §24]