56-20-104 - Payment of losses or damages Borrowing or assessments General assessments.
56-20-104. Payment of losses or damages Borrowing or assessments General assessments.
(a) Should the amount of any loss or damage exceed the amount of money on hand, such of its officers as may be authorized by the bylaws to do so shall convene the directors or executive committee, who may borrow money on the credit of the corporation, sufficient to pay the loss, but no more, or make an assessment upon all the property insured pro rata according to its classification, and according to the amount insured, sufficient to pay what the cash in hand falls short of paying, or for the whole loss or damage, as the directors or executive committee may decide to be for the best interest of the corporation. If the directors or the executive committee deem it to be for the best interest of the corporation, they may, with the authority of a majority in value of the insurance held by members of the corporation, conferred by resolution, bylaw, or otherwise, previously given, make an estimate of the sums as, in their judgment, will be necessary to pay all losses, damages, and expenses for the current year, and supply any deficiency in the preceding year, and proceed to assess, levy, and collect the same of the members of the corporation at such times as, in their discretion, will be most advantageous to the corporation.
(b) The assessment shall be made pro rata upon all property at the time insured, according to its classification or according to the amount insured, sufficient to pay the amount so estimated.
(c) Not more than one (1) such general assessment shall be made in any one (1) year, nor shall any such assessment be made if more than ten percent (10%) of any previous assessment shall be in the treasury of the corporation, and not at the time required for losses actually suffered.
(d) No assessment shall be invalid because made in whole or in part for the purpose of paying any money borrowed by the directors or executive committee, which has been used in the payment of any claim for the loss or damage against the corporation.
[Acts 1895, ch. 220, § 5; Shan., § 3358; Code 1932, § 6240; T.C.A. (orig. ed.), § 56-1904.]