§ 3927 - Assessment cooperative insurance corporations - Vermont Statutes

§ 3927. Assessment cooperative insurance corporations

The following provisions shall affect such corporations doing business on the assessment plan:

(1) Such corporation may issue policies of insurance as enumerated in section 3916 of this title.

(2) Such corporation may classify risks covered under these types of insurance at the time of the issuance of the policy, or at subsequent times and issue policies under different rates, and it may collect regular assessments on such risks either on an annual basis or for whatever length of time the policy may be issued. The amounts of such regular assessments shall be sufficient to pay for the period assessed, each member's pro rata share, based on the risk classification and amount of insurance, of the estimated amount necessary to cover losses, expenses, repayment of debt and contribution to surplus as may be permitted by the bylaws.

(3) Such corporation may borrow, on the credit of the corporation, such funds as are required to pay for extraordinary losses or expenses subject to the approval of the board of directors or as may be provided in the bylaws of such corporation, subject to the maximum limit stated in subdivision (4) of this section. If deemed for the best interest of the corporation, it may estimate the amount necessary to pay all losses and expenses and contributions to surplus for the current year and to supply any deficiency in the preceding year, subject to the maximum limit stated in subdivision (4) of this section, and assess and collect the same from the members. Each assessment shall be made upon all policyholders in proportion to each policyholder's regular annual assessment. The expense of collecting assessments may be regulated by the bylaws.

(4) Such corporation may levy a special assessment to pay for such member's pro rata share of unexpected losses, expenses and contributions to surplus, based upon the risk classification and amount of insurance at the time of the assessment, as may be permitted by the bylaws, however, in no case shall the sum total of all special assessments during any one year exceed 50 percent of the equivalent of one annual regular assessment. The expense of collecting assessments may be regulated by the bylaws. (Amended 1981, No. 6, § 9.)