§ 4111. Mutual companies; assessments. (a) Except as provided in
section four thousand one hundred thirteen of this article, every
domestic mutual property/casualty insurance company shall in its by-laws
and policies prescribe the contingent mutual liability of its members
for the payment of assessments, in such a way that each member shall be
liable to pay the member's proportionate share, subject to the
limitations hereinafter specified, of the amount of any assessment or
assessments permitted for any purpose under any provisions of this
chapter or necessary to make good an impairment of the minimum surplus
of such company. The contingent liability of a member may be limited to
an amount not less than one additional annual premium on each policy
held by a member. The aggregate amount of all assessments whether levied
by the board of directors of such insurer or by the superintendent as
liquidator or rehabilitator of the insurer, or otherwise, shall be no
greater amount than that specified in the by-laws and policies. Except
as provided in section four thousand one hundred thirteen of this
article, no such insurance company shall make, issue or deliver any
policy of insurance, which does not prescribe the contingent liability
of the policyholder in clear and explicit language printed in type not
smaller than eight point.

(b) If any domestic mutual property/casualty insurance company does
not have admitted assets at least equal in amount to the aggregate of
its liabilities and its minimum surplus as required by the provisions of
this chapter, and if such impairment is not otherwise made good, the
board of directors of the company may, with the approval of the
superintendent and within such time as he prescribes, order an
assessment in the manner specified in the by-laws for an amount which
will provide sufficient funds to make good the impairment, except that
no member shall be liable for an assessment exceeding the limit
specified in his policy in accordance with subsection (a) hereof. All
orders of assessment made by the board of directors shall be filed with
the superintendent and shall not take effect unless and until approved
by him. The superintendent may refuse any such approval if, in his
judgment, refusal will best promote the interests of the policyholders
and creditors of the company, and of the insuring public. Every
assessment shall be made upon all members liable to assessment therefor
in the proportion hereinafter specified. Every person, firm or
corporation who or which was a member of such company at any time during
one year prior to the making of an order of assessment by the board of
directors shall be liable to pay and shall pay the member's
proportionate share of any assessment which may be made in accordance
with law, if the member is notified of the assessment within one year
after making of an order of assessment. A member's proportionate part of
any assessment shall be determined by applying to the premium earned on
the member's policy or policies in force during a period of one year
next preceding the order of assessment the ratio of the total assessment
to the total premiums earned during such period on all policies subject
to assessment.

(c) Unless specifically authorized by the provisions of this chapter
to issue non-assessable policies in this state, no foreign mutual
property/casualty insurance company shall be or continue to be
authorized to do business in this state unless its by-laws and policies
issued in this state contain provisions for the levying and collection
of assessments upon members, at least for the payment of losses and
expenses, which conform in substance to subsection (b) hereof.

(d) In the case of a mutual property/casualty insurance company
subject to paragraph two of subsection (a) of section four thousand one
hundred seven of this article, an assessment authorized by this section
shall be made when, in addition to the grounds set forth in this
section, if the ratio of net premium writings to surplus as regards
policyholders is four to one or greater, based upon the last annual
statement or any quarterly statement projected on an annual basis,
subject to the approval of the superintendent, and if, at any time, upon
examination, the superintendent determines that an assessment should be
made pursuant to subsection (b) hereof or this subsection the
superintendent shall make an appropriate order that the assessment be
made.