A domestic mutual insurer’s directors must assess only qualifying members if the insurer’s assets fall below liabilities and required surplus, and members who are assessed are liable for the amount assessed.
20-718 - Enforcement of contingent liability 20-718 . Enforcement of contingent liability A. If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this title for authority to transact the kinds of insurance being transacted, and the deficiency is not cured from other sources, its directors shall levy an assessment only on its members who, at any time within the twelve months immediately preceding the date notice of such assessment was mailed to them, held policies providing for contingent liability, and such members shall be liable to the insurer for the amount so assessed. B. The assessment shall be for such an amount as is required to cure such deficiency and to provide a reasonable amount of working funds above such minimum amount of surplus, but such working funds so provided shall not exceed five percent of the insurer's liabilities as of the date on which the amount of such deficiency was determined. C. No one policy or member as to such policy shall be assessed or charged with an aggregate of contingent liability as to obligations incurred by the insurer in any one calendar year, in excess of the number of times the premium as stated in the policy as computed solely on premium earned on such policy during that year. D. No member shall have an offset against any assessment for which the member is liable, on account of any claim for unearned premium or loss payable. E. As to life insurance, any part of such an assessment on a member that remains unpaid following notice of assessment, demand for payment and lapse of a reasonable waiting period as specified in such notice, if approved by the director of the department of insurance and financial institutions as being in the best interests of the insurer and its members, may be secured by placing a lien on the cash surrender values and accumulated dividends held by the insurer to the credit of such member.