§ 27-5-27 - Making up of impairments of capital. - Rhode Island Statutes

SECTION 27-5-27

   § 27-5-27  Making up of impairments ofcapital. – If, at any time after a special reserve fund has been accumulated by anycompany, the directors of the company shall present evidence satisfactory tothe insurance commissioner that the capital of the company has become impaired,the commissioner shall order the directors to call upon the stockholders tomake up that impairment, and the board of directors may then require thenecessary payment by the stockholders to make good the whole of thatimpairment, or they may apply for that purpose the whole or any part of thespecial reserve fund and require of the stockholders payment of any amount asmay be necessary to make up the balance of that impairment not made up out ofthe special reserve fund. The stock of every stockholder shall be pledged andliable for the amount assessed upon the stockholder to make up that impairmenteither in whole or in part, and in case any stockholder refuses to pay thatassessment the stock standing in his or her name may be sold at public auctionafter thirty (30) days' notice in any manner as the directors may provide. Ifthe board of directors elects to make good that impairment or any part of theimpairment out of the special reserve fund, the insurance commissioner shall,upon request of the board, transfer to the company so much of the specialreserve fund as is necessary for the purpose.