44-219. Domestic mutual company; transaction of business; policies and reserve required; additional requirements.

332 words·~2 min read·/ne/chapter-44/44-219

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

(1)(a) No domestic mutual insurance company shall begin to transact the business of insurance until

(i)it has received not less than one hundred applications for insurance unless organized to write

(A)workers' compensation and employers liability insurance, in which case it shall receive applications from at least twenty employers covering in the aggregate five hundred employees, or

(B)the line or lines of insurance specified in subdivisions

(13)and

(14)of section 44-201 , in which case no application shall be required, and in addition thereto

(ii)it has received in cash one annual premium for each application for insurance.

(b)Except as provided in section 44-202.01 , no mutual insurance company shall, on and after August 25, 1989, transact any line of insurance specified in section 44-201 in this state unless it has and maintains a minimum surplus, in cash or invested as provided by law, of at least one million dollars, nor shall it, on and after such date, transact the line or lines of insurance specified in subdivisions

(1)and

(2)of section 44-201 and in addition thereto one or more lines of insurance other than those specified in subdivisions

(3)and

(4)of such section in this state unless it has and maintains a minimum surplus, in cash or invested as provided by law, of at least two million dollars.

(2)The provisions of subsection

(1)of this section shall be considered minimum requirements. Mutual insurers holding a certificate of authority to transact business in this state shall also be subject to the requirements of the Insurers and Health Organizations Risk-Based Capital Act.

Contracts, providing for distribution of a percentage of the premiums collected annually as dividends to charter members, made in an effort to secure the number of applications required by statute before business may be commenced, are ultra vires in the absence of authority therefore in the statute or charter. Durland v. Elkhorn Life & Acc. Ins. Co., 112 Neb. 105, 198 N.W. 564 (1924).