380.131. Loss or judgment against company, business basis to determine procedure--failure to pay assessment, effect.
Loss or judgment against company, business basis to determineprocedure--failure to pay assessment, effect.
380.131. 1. After receiving notice of any loss or damage to a member'sproperty or after the rendition of any judgment against a company, thedirectors of a company operating solely on an assessment basis shall verifysuch loss, damage or judgment and shall assess each member an amount inproportion to the amount of risk such member has with the company. Failure topay the assessment within thirty days of notification shall justify thecompany in canceling a member's policy and returning a member's deposit afterdeducting the amount of the assessment owed.
2. If a company has chosen to operate on a premium plus assessmentbasis, it shall pay all losses and judgments from premiums received or amountscollected on promissory notes. The amount deducted from each member'spremiums paid or demanded from each member's promissory note shall bear suchrelationship to the total loss as that member's total premium bears to thetotal premiums collected in the calendar year that the loss is incurred. Ifsuch funds are insufficient to cover the loss or judgment, the directors mayassess each member in the same manner; but, there shall not be more than oneassessment for losses in any calendar year. The directors may borrowsufficient funds to pay losses until such time as they may collect theassessment. Failure to pay any assessment within thirty days of notificationshall justify the company in canceling a member's policy.
(L. 1984 H.B. 1498)Effective 1-1-85