When the amount of any ascertained loss exceeds the cash funds of the reinsurer and also exceeds one-eighth of one per cent of the total amount of the insurance in force in the reinsurer, the president shall convene its directors. On so convening, the directors shall assess each member in proportion to the member?s reinsurance, taken in connection with the rate of premium under which such reinsurance is classified.
(Enacted by Stats. 1935, Ch. 145.)
When the amount of such loss does not exceed one-eighth of one per cent of the total amount of insurance in force in the reinsurer, the directors may, by resolution in writing signed by two-thirds of all the directors while present at a meeting, borrow in the name of the reinsurer and give its evidence of indebtedness therefor, in an amount not exceeding one-eighth of one per cent of the total amount of such insurance in force.
(Enacted by Stats. 1935, Ch. 145.)
The term of such loan shall not be longer than twelve months, and the date of maturity shall not be more than thirty days beyond the date of the next annual meeting of the reinsurer.
(Enacted by Stats. 1935, Ch. 145.)
The board of directors may at their annual meeting levy an assessment not exceeding twenty-five cents on the $100 of reinsurance. The sum so raised shall constitute a reserve fund to be used in emergency cases only. Another assessment for this purpose shall not be made while this reserve fund remains intact.
(Enacted by Stats. 1935, Ch. 145.)
Whenever an assessment is made, the secretary shall immediately notify every member by registered letter addressed to the secretary of the member at its usual post-office address, stating:
(a)The amount of such loss.
(b)The sum due from the member as its share.
(c)To whom payment is to be made.
(d)The time, not less than thirty nor more than ninety days from the date of mailing notice, when payment is to be made.
(Enacted by Stats. 1935, Ch. 145.)
An action may be brought against any member of such reinsurer that neglects or refuses to pay the liabilities due such reinsurer.
(Enacted by Stats. 1935, Ch. 145.)
The directors of any such reinsurer who wilfully refuse or neglect to perform the duties imposed upon them by law or by the by-laws of the reinsurer are liable in their individual capacity to the reinsurer sustaining loss.
(Enacted by Stats. 1935, Ch. 145.)
An action may also be brought and maintained against any such reinsurer by members thereof to recover sums owing them for losses sustained when payment is withheld after the amount of such losses is determined and is due by the terms of the policy.
(Enacted by Stats. 1935, Ch. 145.)