40-1018. Reserve fund.
40-1018
40-1018. Reserve fund.A reserve fund equal to not less than ten percentum nor more thantwenty-five percentum, as the board of directors may determine, of thepremiums received on insurance shall be set apart and maintained out of thecash receipts of the company until such reserve fund shall amount to atleast four thousand dollars per million dollars of insurance in force,after which the percent of the cash receipts that shall be added to thisreserve may be reduced at the discretion of the board of directors. Andwhenever the cash in the hands of the treasurer of any such company, notincluded in the reserve fund, is insufficient to pay any loss that mayaccrue, then such deficiency shall be taken from the reserve fund, but suchreserve fund shall not be reduced below one half until an assessment shallbe made upon the deposit notes held by the company sufficient to fullyreimburse the reserve fund. Any such diminution of the reserve fund shallbe held to be a liability to be provided for by assessments on the depositnotes. Such part of the reserve fund of the company as is not needed forimmediate use of the company shall be invested by the directors in suchsecurities as are authorized by this code. Any other reserves that havebeen accumulated by the company may be made a part of this reserve fund.
History: L. 1927, ch. 231, 40-1018; June 1.