§ 27-5-31 - Termination of surplus and reserve fund method – Return of special reserve fund. - Rhode Island Statutes

SECTION 27-5-31

   § 27-5-31  Termination of surplus andreserve fund method – Return of special reserve fund. – Any company which has established a guaranty surplus fund and special reservefund may, at a regular meeting of its board of directors, or at a specialmeeting called for that purpose, adopt a resolution declaring its desire andintention to discontinue those funds and to cease to do business under and inpursuance of the provisions of law relating to those funds, and file acertified copy of that resolution with the insurance commissioner. Upon theadoption and filing of that resolution, all rights of the company to withhold aspecial reserve fund from its general creditors shall be terminated and thecompany shall discontinue printing upon its policies or renewals the noticeprovided for in § 27-5-29, and after this the provisions of this chapterso far as they relate to those funds shall cease to apply to the company;provided, that the special reserve fund of the company shall continue at theamount prescribed by the provisions of this chapter at the date of the makingand filing of the resolution and the guaranty surplus fund may continue at alike amount, but those funds need not be increased on account of any increasein capital of the company or otherwise after the adoption and filing of theresolution and shall be held and invested as provided in §§ 27-5-15– 27-5-31, but only for the purpose of assuring to the holders of policiesat the time the resolution is filed with the insurance commissioner any rightsand privileges as may inure to them under §§ 27-5-15 – 27-5-31.At the expiration of five (5) years after the adoption and filing of theresolution by the company, the special reserve fund shall be reduced to anamount equal to the unearned premium upon and all losses incurred and unpaidunder any remaining policies which were outstanding at the time of the adoptionand filing of the resolution. The excess of the special reserve fund above thatamount shall be returned by the insurance commissioner to the company, and whenall policies which were outstanding at the time of the adoption and filing ofthe resolution shall have terminated by expiration or by cancellation, theentire balance of the special reserve fund shall be returned to the company.