§ 27-5-14 - Reinsurance by mutual insurers – Agreements with policyholders.
SECTION 27-5-14
§ 27-5-14 Reinsurance by mutual insurers– Agreements with policyholders. – (a) Whenever any mutual company of this or any other state shall reinsure in asimilar company the whole or any portion of a risk covered by its policy orpolicies of insurance, it may do so either:
(1) By existing methods of reinsurance; or
(2) By agreement with its policyholder or policyholdersattached to and made a part of its policy or policies.
(b) This agreement shall contain a schedule giving:
(1) The name and location of each reinsuring company; and
(2) The portion of the risk reinsured in each company.
(c) This agreement shall also provide that the dividend orreturn of the premium or premium deposit to be paid or credited upontermination of the policy or policies shall be the sum of:
(1) The dividend or return of the premium or premium depositto be paid or credited upon that portion of the premium or premium depositretained by the company issuing the policy or policies; and
(2) The aggregate amount of the dividends or returns of thepremium or premium deposit paid or credited upon all portions of the premium orpremium deposit ceded to all the reinsuring companies.