§ 58-65-95. Investments and reserves. - North Carolina Statutes

§ 58‑65‑95. Investments and reserves.

(a)        Corporationssubject to this Article shall invest in or hold only those assets permitted byArticle 7 of this Chapter for life and health insurance companies.

(b)        Every suchcorporation shall accumulate and maintain, in addition to proper reserves forcurrent administrative liabilities and whatever reserves are deemed to beadequate and proper by the Commissioner for unpaid hospital, medical, or dentalbills, and unearned membership dues, a special contingent surplus or reserve atthe following rates annually of its gross annual collections from membershipdues, exclusive of receipts from cost plus plans, until the reserve equals anamount that is three times its average monthly expenditures for claims andadministrative and selling expenses:

(1)        First $200,000                                                    4%

(2)        Next $200,000                                                   2%

(3)        All above $400,000                                            1%

(c)        Any suchcorporation may accumulate and maintain a contingent reserve in excess of thereserve required in subsection (b) of this section, not to exceed an amountequal to six times the average monthly expenditures for claims andadministrative and selling expenses.

(d)        If the Commissionerfinds that special conditions exist warranting an increase or decrease in thereserves or schedule of reserves in subsection (b) of this section, theCommissioner may modify them accordingly. Provided, however, when specialconditions exist warranting an increase in the schedule of reserves, theschedule shall not be increased by the Commissioner until a reasonable lengthof time has elapsed after the Commissioner gives notice of the increase. (1941, c. 338, s. 8; 1943, c.537, s. 5; 1947, c. 820, s. 5; 1961, c. 1149; 1991, c. 720, s. 79; 1999‑244,s. 6; 2003‑212, s. 18.)