33-3-432. Impairment of capital or assets. (1) If a stock insurer's capital, as represented by the aggregate par value of its outstanding capital stock, becomes impaired or the assets of a mutual insurer are less than its liabilities and the minimum amount of surplus required to be maintained by it under 33-3-204 for authority to transact the kinds of insurance being transacted, the commissioner shall at once determine the amount of deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of such notice.
(2) The deficiency may be made good in cash or in assets eligible under chapter 12 for the investment of the insurer's funds as follows:
(a) if a stock insurer, by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance to be transacted; or
(b) if a mutual insurer, by amendment of its certificate of authority to cover only the kind or kinds of insurance for which the insurer has sufficient surplus under this title.
(3) If the deficiency is not made good and proof is filed with the commissioner within the 60-day period, the insurer is insolvent and the commissioner shall institute delinquency proceedings against it under chapter 2, part 13; except that if the deficiency exists because of increased loss reserves required by the commissioner or because of disallowance by the commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the commissioner may, upon application and good cause shown, extend for not more than an additional 60 days the period within which the deficiency may be made good and proof of making good is filed.
History: En. Sec. 456, Ch. 286, L. 1959; R.C.M. 1947, 40-4739; amd. Sec. 12, Ch. 303, L. 1981; amd. Sec. 141, Ch. 575, L. 1981; amd. Sec. 44, Ch. 304, L. 1999.
Structure Montana Code Annotated
Title 33. Insurance and Insurance Companies
Chapter 3. Domestic Stock and Mutual Insurers
33-3-402. Vouchers for expenditures
33-3-403. through 33-3-410 reserved
33-3-411. Contingent liability of mutual members
33-3-412. Levy of contingent liability
33-3-413. Enforcement of contingent liability
33-3-414. Nonassessable policies of mutual insurers
33-3-415. Insufficient reserves -- nonassessable policies prohibited -- revocation of authority
33-3-416. through 33-3-420 reserved
33-3-421. Participating policies
33-3-422. Dividends to stockholders
33-3-423. Dividends to mutual policyholders
33-3-424. Illegal dividends -- administrative or civil penalty
33-3-425. through 33-3-430 reserved
33-3-432. Impairment of capital or assets
33-3-433. Assessment of stockholders or members
33-3-434. Directors' liability for losses during deficiency
33-3-435. Stock transfer during impairment of capital
33-3-436. Mutual member's share of assets on liquidation
33-3-437. through 33-3-440 reserved
33-3-441. Equity securities of domestic stock insurance company -- statement of ownership
33-3-443. Short sales of equity securities prohibited -- time for delivery after sale
33-3-445. Exemptions -- arbitrage transactions
33-3-446. Exemptions -- registered securities -- holding by less than 100 persons
33-3-447. Rules of commissioner -- classifications -- effect
33-3-448. and 33-3-449 reserved