§ 1311. Impairment of a mutual or reciprocal insurer. (a) In this
section "required surplus" includes any guaranty surplus or special
contingent surplus or other specifically reserved surplus account of a
domestic mutual insurer, a domestic reciprocal insurer or any other
domestic insurer without capital stock, required by the provisions of
this chapter to be maintained for any purpose, including: (i) issuance
of non-assessable policies, (ii) payment of dividends, or (iii)
transaction of business after a license has been issued by the
superintendent.

(b) Whenever the superintendent finds from a financial statement or
report on examination that the total admitted assets of any insurer
required to maintain such required surplus are less than the aggregate
amount of its liabilities and required surplus, he shall determine the
amount of such impairment and order the insurer or its attorney-in-fact
to eliminate such impairment within such period he designates, not
exceeding ninety days from service of such order. He may also by order
prohibit such insurer, while such impairment exists, from:

(1) issuing any non-assessable policies if its required surplus for
the purpose of item (i) of subsection (a) hereof is impaired, or

(2) paying dividends if its required surplus for the purpose of item
(ii) of subsection (a) hereof is impaired, or

(3) issuing new policies if its minimum surplus for the purpose of
item (iii) of subsection (a) hereof is impaired.

(c) If the impairment so determined is such that such insurer does not
have the minimum surplus required for item (iii) of subsection (a)
hereof, and if when such designated period expires the insurer has not
satisfied the superintendent that such impairment has been eliminated,
the superintendent may proceed against such insurer pursuant to the
provisions of article seventy-four of this chapter on the ground that
its further transaction of business will be hazardous to its
policyholders, its creditors or the public.

(d) If the required minimum surplus of any authorized foreign mutual
or reciprocal insurer is found by the superintendent to be impaired, the
superintendent may order such insurer not to issue during such time as
he prescribes any new policies in this state, and may, after notice and
hearing, revoke its license to do business in this state.