TITLE XXXVII
INSURANCE

Chapter 403
GUARANTY FUND OF MUTUAL INSURANCE COMPANIES

Section 403:1

403:1 Guaranty Fund Established Out of Surplus. – Any mutual insurance company organized under the laws of this state may establish a guaranty fund in any amount not exceeding $500,000 or not to exceed 1/2 its net policyholders' surplus, whichever is smaller, by appropriation from its net assets. Such guaranty fund shall be considered as paid up capital and be available to meet the obligations of the company, but not to pay dividends or to be otherwise distributed except to meet the obligations of the company when all other assets of the company shall become exhausted.

Source. 1947, 149:1 par. 11, eff. May 15, 1947.

Section 403:2

403:2 Guaranty Fund Established by Subscription. – Any mutual insurance company organized under the laws of this state may create not more than one guaranty fund by borrowing a sum of money not exceeding $500,000, by the issue of certificates of indebtedness upon such terms as the policyholders shall determine provided that such certificates shall not be divided into classes in any way and that the holders of such certificates shall not be entitled to vote in the direction of the affairs of the company and shall not receive a greater return on their investment than 10 percent per annum. The commissioner, upon notice to the company and after hearing its objections, if any, may require any guaranty fund established under this section to be retired when he shall find it is no longer needed for protection of the policyholders.

Source. 1947, 149:1 par. 12. RSA 403:2. 1969, 293:2, eff. June 30, 1969.

Section 403:3

403:3 Retirement of Guaranty Funds. – Any mutual insurance company which shall create a guaranty fund under either of the 2 preceding sections may, with the approval of the insurance commissioner, reduce or retire such fund in whole or in part, but it may not be otherwise distributed except to pay the obligations of the company.

Source. 1947, 149:1 par. 13, eff. May 15, 1947.

Section 403:4

403:4 Loans to Companies. – Any director, officer, or member of any mutual insurance company, other than a mutual life company, or any other person, may advance to such company any sum or sums of money necessary for the purpose of its business or to enable it to comply with any of the requirements of the law. Such moneys, and such interest thereon as may have been agreed upon, not exceeding 10 per centum per annum, shall not be a liability or claim against the company or any of its assets, and shall be repaid only out of the surplus of such company. No commission or promotion expenses shall be paid in connection with the advance of any such money to the company, and the amount of such advance shall be reported in each annual statement. Such company shall prior to making such advances provide the insurance commissioner with such evidence as he may by regulation prescribe concerning the making of any such advance or the making of any payments, whether of principal or interest, on account thereof.

Source. 1969, 293:3, eff. June 30, 1969.

Section 403:5

403:5 Rules. – The insurance commissioner is hereby granted authority to issue such rules, regulations and orders as may be necessary to properly administer this chapter.