MCA Chapter 33

in effect

Miss. Code Ann. § 83-33-1 Regulation of exchange.

Individuals, partnerships, corporations, limited liability companies, public hospitals, including community hospitals, and all other types of entities authorized to exist under the laws of this state, designated as subscribers, may exchange reciprocal or inter insurance contracts with each other or with individuals and all types of entities authorized to exist under the laws of other states, territories, districts and countries, providing insurance or indemnity among themselves from any loss which may be insured against under other provisions of the law except life insurance.

Miss. Code Ann. § 83-33-3 Execution of contracts.

Such contracts may be executed by an attorney, agent, or other representative, herein designated attorney, duly authorized and acting for said subscribers, and such attorney may be a corporation or limited liability company. The office or offices of such attorney may be maintained at such place or places as may be designated by the subscribers in the power of attorney.

Miss. Code Ann. § 83-33-5 Declaration under oath.

Such subscribers so contracting among themselves shall, through their attorney, file with the Commissioner of Insurance a declaration verified by the oath of such attorney or, where such attorney is a corporation, by the oath of the proper officer thereof, setting forth: The name of the reciprocal, which name shall not be so similar to any name adopted by any insurance organization authorized to write the same class of insurance in this state as to confuse or deceive. The address of the reciprocal’s principal office; The name of the attorney and address of its principal office; The kind or kinds of insurance to be effected or exchanged. A copy of the form of policy contract or agreement under or by which such insurance is to be effected or exchanged. A copy of the form of power of attorney or other authority of such attorney under which such insurance is to be effected or exchanged. The location of office or offices from which such contracts or agreements are to be issued. That applications have been made for indemnity upon at least ten (10) separate risks aggregating not less than One Million Five Hundred Thousand Dollars ($1,500,000.00), as represented by executed contracts or bona fide applications to become concurrently effective; or in case of employers’ liability or similar classes of insurance, covering a total payroll of not less than Two Million Five Hundred Thousand Dollars ($2,500,000.00). That there is in the possession of such attorney and available for the payment of losses, assets conforming to Section 83-33-11. A financial statement in form prescribed for the annual statement.

Miss. Code Ann. § 83-33-7 Commissioner as agent for service of process; reciprocal may sue or be sued in its own name; prohibition against suing subscribers.

Any reciprocal doing business in this state may sue or be sued in its name as set forth in its certificate of authority or license. Concurrently with the filing of the declaration provided by the terms of Section 83-33-5, the attorney shall file with the Commissioner of Insurance an instrument in writing, executed by him for said subscribers, conditioned that upon the issuance of certificates of authority provided in Section 83-33-17 action may be brought in the county in which the property or person insured thereunder is located, and service of process may be had upon the Commissioner of Insurance in all suits in this state arising out of such policies, contracts, or agreements, which service shall be valid and binding upon the reciprocal. Three (3) copies of each process shall be served, and the Insurance Department shall file one (1) copy, forward one (1) copy to said attorney, and return one (1) copy with his admission of service. All suits of every kind and description brought against such reciprocal must be brought against the reciprocal as such, and shall not and may not be brought against any of the subscribers thereto individually on account of their connection with or membership in such reciprocal, and must be brought in the manner and method above provided. A judgment rendered in any such case where service of process has been so had upon the Commissioner of Insurance shall be valid and binding against the reciprocal, and such judgment may only be satisfied solely out of the funds of the reciprocal.

Miss. Code Ann. § 83-33-9 Maximum risk.

There shall be filed with the insurance commissioner by such attorney, whenever the insurance commissioner shall so require, a statement under the oath of such attorney showing in the case of fire insurance the maximum amount of indemnity upon a single risk; and no subscriber shall assume on any single fire insurance risk an amount greater than ten percent (10%) of the net worth of such subscriber.

Miss. Code Ann. § 83-33-11 Assets maintained.

There shall be maintained at all times assets in cash or securities authorized by the laws of this state for the investment of funds of insurance companies doing the same kind of business, an amount equal to one hundred percent (100%) of the unearned premiums or deposits collected and credited to the accounts of subscribers, or fifty percent (50%) of the advance premiums or deposits collected and credited to the accounts of subscribers on policies having one (1) year or less to run, pro rata on those for longer periods. In addition to the foregoing sum in the case of liability insurance, there shall be maintained as a reserve assets sufficient to discharge all liabilities on all outstanding claims, both reported and incurred but not reported, arising under all policies issued, the same to be calculated on the basis of premiums or deposits as in this section defined and in accordance with the laws of the state relating to similar reserves for companies insuring similar risks. Premiums or deposits as used in this section shall be construed to mean the advance payments made by subscribers. If at any time the assets on hand are less than the foregoing requirements or less than One Hundred Thousand Dollars ($100,000.00), whichever is the greater, where the attorney is exchanging contracts covering employers’ liability or similar classes of insurance, the reciprocal shall make up the deficiency. Whenever such assets are less than the amount above required or less than Fifty Thousand Dollars ($50,000.00), whichever is the greater, if the attorney is exchanging contracts other than those covering employers’ liability or similar classes of insurance, the reciprocal shall make up the deficiency. Notwithstanding subsection (1) of this section, a reciprocal authorized to transact business under this chapter shall comply with the minimum capital, surplus and reserve requirements of a stock company writing similar lines of insurance.

Miss. Code Ann. § 83-33-13 Financial reports.

Such reciprocal shall, within the time limited for filing the annual report by insurance companies transacting the same kind of business, make a report to the Commissioner of Insurance for each calendar year showing the financial condition of affairs at the office where such contracts are issued, and shall furnish such additional information and reports as may be required to show the total premiums or deposits collected, the total losses paid, the total amounts returned to subscribers, and the amounts retained for expenses, provided, however, that such reciprocal shall not be required to furnish the names and addresses of any subscribers. The business affairs and assets of such organization shall be subject to examination by the Commissioner of Insurance at the expense of the office examined.

Miss. Code Ann. § 83-33-15 Penalty.

Any attorney who shall exchange any contracts of insurance of the kind and character specified in this chapter or any attorney or representative of such attorney who shall solicit or negotiate any application for same without the attorney first complying with the foregoing provisions shall be deemed guilty of a misdemeanor and, on conviction thereof, shall be subjected to a fine of not less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00). For the purpose of organization and upon issuance of permit by the Commissioner of Insurance, powers of attorney may be solicited without license; but no attorney, agent, or other persons shall effect any such contracts of insurance until all the provisions of this chapter shall have been complied with.

Miss. Code Ann. § 83-33-17 Certificate of authority.

Upon compliance with the foregoing requirements and the payment of the fees and taxes provided in this chapter, the Commissioner of Insurance shall issue a certificate of authority to the reciprocal. The Commissioner of Insurance may revoke or suspend any certificate of authority issued hereunder in case of breach of any of the conditions imposed by this chapter after reasonable notice has been given to the reciprocal in writing, so that the reciprocal may appear and show cause why such action should not be taken. Any reciprocal who may have procured a certificate of authority hereunder may have the same renewed annually thereafter, provided that any certificate of authority issued shall continue in force and effect until a new certificate of authority is issued or specifically refused.

Miss. Code Ann. § 83-33-19 Taxation of premium receipts.

Such reciprocal shall upon the issuance of the certificate of authority herein provided pay to the state the sum of Two Hundred Dollars ($200.00), as provided in Section 27-15-83, and with the filing of the annual report herein provided shall pay an annual tax upon the gross premiums or deposits collected from subscribers in this state during the preceding calendar year, after deducting therefrom returns for cancellations, considerations for reinsurance, and all amounts returned to subscribers or credited to their account as savings, as provided in Section 27-15-103 et seq.

Miss. Code Ann. § 83-33-21 Subscriber’s agreement and power of attorney.

Every subscriber of a domestic reciprocal may execute a subscriber’s agreement and power of attorney setting forth the rights, privileges and obligations of the subscriber as an underwriter and as a policyholder, and the powers and duties of the attorney and reciprocal. If a domestic reciprocal requires execution of a subscriber’s agreement and power of attorney by a subscriber, then the subscriber, by its execution, shall be bound by the terms and conditions of the subscriber’s agreement and power of attorney. If a domestic reciprocal does not require execution of a subscriber’s agreement and power of attorney, the reciprocal shall include on its policies a statement that the subscriber shall be bound by the terms and conditions of the then current subscriber’s agreement and power of attorney on file with and as approved by the Commissioner of Insurance, and each subscriber shall by operation of law be bound by such subscriber’s agreement and power of attorney as if individually executed by such subscriber. Without additional execution, notice or acceptance, every subscriber of a reciprocal agrees to be bound by any modification of the terms of the subscriber’s agreement and power of attorney which is jointly made by the attorney and the board of directors and amendments thereto, which shall be on file with the attorney and Commissioner of Insurance, which shall become effective upon its approval by the Commissioner of Insurance, and which shall by operation of law bind all subscribers the same as if each subscriber adopted and executed the modified subscriber’s agreement and power of attorney. No such modification shall be effective retroactively, nor shall it affect any insurance contract issued prior to the modification. The Commissioner of Insurance’s approval shall be deemed given if the subscriber’s agreement and power of attorney or any amendment is not disapproved within thirty (30) days of its filing.

Miss. Code Ann. § 83-33-23 Board of directors to control and manage reciprocal.

The board of directors for the reciprocal shall have and exercise the ultimate power over the control and management of the affairs of the reciprocal, subject to the subscriber’s agreement. The board of directors shall be selected under rules adopted by the subscribers. At least two-thirds (2/3) of the board of directors of a domestic reciprocal shall be composed of subscribers or representatives of subscribers, other than the attorney or any person employed by or having a financial interest in the attorney. An individual shall not be considered to be employed by or having a financial interest in the attorney if such individual is a subscriber or a representative of a subscriber of the reciprocal. The board of directors may also be referred to as a subscribers advisory committee, board of trustees or by such other name as the board chooses.

Miss. Code Ann. § 83-33-25 Return of savings or credits accruing to subscribers.

A reciprocal may return to its subscribers any savings or credits accruing to their accounts.

Miss. Code Ann. § 83-33-27 Certificate to issue nonassessable policies of insurance.

A domestic reciprocal insurer may apply for a certificate to issue nonassessable policies of insurance. A nonassessable policy is a policy in which a subscriber may not be assessed pursuant to Sections 83-33-29 and 83-33-31. If a domestic reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital and surplus required to be maintained by a domestic stock insurer authorized to transact like kinds of insurance, upon application by the domestic reciprocal insurer the Commissioner of Insurance shall issue a certificate of nonassessability authorizing the insurer to omit provisions imposing contingent assessment liability in all policies delivered or issued or renewed. If a domestic reciprocal insurer’s surplus of assets over all liabilities falls below the minimum capital and surplus required to be maintained by a domestic stock insurer authorized to transact like kinds of insurance, the Commissioner of Insurance may forthwith revoke the certificate of nonassessability. The revocation shall not render subject to contingent assessment liability any policy then in force.

Miss. Code Ann. § 83-33-29 Issuing nonassessable policies without obtaining certificate of nonassessability prohibited; contingent assessment liability.

Any domestic reciprocal insurer that has not been issued a certificate allowing it to issue nonassessable policies as provided in Section 83-33-27 shall issue assessable policies. An assessable policy is a policy in which the insurer charges an initial premium but may later charge an additional premium in accordance with the provisions of this section and Section 83-33-31. The contingent assessment liability on any one (1) policy in any one (1) calendar year shall equal the premiums earned on the policy for that year multiplied by not less than one (1) nor more than ten (10) as set forth in the policy. The contingent assessment liability shall not be joint, but shall be individual and several. Each assessable policy issued by the insurer shall plainly set forth a statement of the contingent assessment liability on the front of the policy in capital letters in not less than ten point type.

Miss. Code Ann. § 83-33-31 Computation and timing of assessments levied against subscribers.

Assessments may be levied against the subscribers of a domestic assessable reciprocal in accordance with Section 83-33-29. Any assessment levied against the subscribers of a domestic assessable reciprocal shall treat all subscribers equally in that each subscriber’s assessment shall be at the same multiple of the subscriber’s policies’ individual earned premium for the period covered by the assessment. However, no assessment shall exceed the aggregate contingent assessment liability computed in accordance with Section 83-33-29. For the purposes of this section, the premiums earned on the subscriber’s policies are the gross premiums charged by the reciprocal for the policies, minus any charges not recurring upon the renewal or extension of the policies. No subscriber shall have an offset against any assessment for which the subscriber is liable on account of any claim for unearned premium or losses payable. Every subscriber of a domestic reciprocal having contingent assessment liability shall be liable for and shall pay the subscriber’s share of any assessment computed in accordance with this section if, while such policy is in force, or within three (3) years after its termination, the subscriber is notified: By the reciprocal or the attorney of the reciprocal’s intention to levy an assessment; or That delinquency proceedings have been instituted against the reciprocal under this title and the department or receiver intends to levy an assessment.

Miss. Code Ann. § 83-33-33 Liability of subscribers for reciprocal’s debts or obligations.

No subscriber of a reciprocal shall be personally liable for the payment of the reciprocal’s debts or obligations. Any judgment obtained against a reciprocal shall be binding and enforceable only upon and against the reciprocal and shall not be binding or enforceable upon or against any of the reciprocal’s subscribers. No legal action shall be allowed to be brought or maintained against the subscribers or insureds of a reciprocal for the payment of the reciprocal’s debts or obligations; provided, however, nothing in this section shall diminish or eliminate a subscriber’s contingent assessment liability under an assessable policy as provided in Sections 83-33-29 and 83-33-31.

Miss. Code Ann. § 83-33-35 Applicability of licensing requirements and regulations to employees and agents of reciprocal and its attorney.

The provisions of this code regarding the appointment, licensing, qualification and regulation of insurance agents, brokers and solicitors, do not apply to the reciprocal or its attorney, nor to the salaried representatives of such reciprocal or attorney who receive no commissions, but do apply in the case of any agent, broker or solicitor of any reciprocal who receives any commission.

Miss. Code Ann. § 83-33-37 Two or more reciprocals authorized to combine assets and liabilities into one reciprocal.

Two (2) or more reciprocals may combine their assets and liabilities into one (1) reciprocal, subject to the approval of the Commissioner of Insurance.