§ 56-16-101. Short Title — Applicability
This chapter shall be known and may be cited as the “Exchange or Reciprocal Insurance Act of 1990.” This chapter shall apply to all reciprocals and reciprocal insurance as defined in § 56-16-102.
§ 56-16-102. Definitions
As used in this title, unless the context otherwise requires: “Reciprocal” means the aggregation of subscribers under a common name; and “Reciprocal insurance” means insurance resulting from the mutual exchange of insurance contracts among persons in an unincorporated association under a common name through an attorney-in-fact having authority to obligate each person both as insured […]
§ 56-16-103. Licensed Reciprocal Authorized to Write Certain Classes of Insurance
A reciprocal licensed to transact the business of insurance in this state may write the classes of insurance enumerated in § 56-2-101.
§ 56-16-104. Applicable Laws
Except as otherwise provided, all the provisions of this title relating to insurers generally, and those relating to insurers writing the same classes of insurance that reciprocals are permitted to write, are applicable to reciprocals.
§ 56-16-105. Power and Authority to Enter Into Reciprocal Insurance Contract
Persons of this state may enter into reciprocal insurance contracts with each other and with persons of other states and countries, providing indemnity among themselves from any loss that may be insured against under other laws, excepting life insurance. For any corporation now existing or hereafter organized under the laws of this state, the power […]
§ 56-16-106. Business Name — Requirements
Every reciprocal shall have and use a business name that includes the word “reciprocal,” “interinsurer,” “interinsurance,” “exchange,” “underwriters” or “underwriting.”
§ 56-16-108. Foreign Reciprocals — Licensing Requirements
No foreign reciprocal shall be licensed to transact the business of insurance in this state unless it has filed with the department a certificate of the supervising insurance official of the state in which it is organized. The certificate shall show that the foreign reciprocal is licensed to write and is writing actively in that […]
§ 56-16-109. Attorney for Foreign Reciprocal — Residence and Principal Office
Nothing in this title regarding the admission and licensing of foreign and alien insurers requires that the attorney of a foreign or alien reciprocal be a resident or domiciled in this state, or that the principal office of the attorney be maintained in this state. The office or offices of the attorney shall be determined […]
§ 56-16-110. Attorney for Foreign Reciprocal — Execution of Contracts
Reciprocal insurance contracts shall be executed by the attorney of the reciprocal.
§ 56-16-111. Agent for Reciprocal — License Required — Appointment
No person shall act in this state as an agent of a reciprocal in the solicitation or procurement of applications for insurance, subscriber’s agreements and powers of attorney, or in the collection of premiums in connection with the reciprocal insurer, without first procuring a license from the department pursuant to the requirements in chapter 6 […]
§ 56-16-112. Contingent Assessment Liability of Subscriber
Each subscriber insured under an assessable policy shall have a contingent assessment liability for payment of actual losses and expenses incurred while the subscriber’s policy was in force. This shall be in the amount provided for in the power of attorney or subscriber’s agreement. The contingent assessment liability on any one (1) policy in any […]
§ 56-16-113. Reduction or Omission of Contingent Assessment Liability — Requirements — Revocation
The department may issue a certificate authorizing the reciprocal to reduce or extinguish the contingent assessment liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent assessment liability in all policies delivered or issued for delivery in this state for as long as the two million dollar […]
§ 56-16-114. Return of Savings or Credits to Subscribers — Distribution
A reciprocal may return to its present or past subscribers, or both, any savings or credits accruing to their accounts. The distribution shall not unfairly discriminate between classes of risks or policies, or between subscribers. However, the distribution may vary for classes of subscribers based upon the experience of those classes.
§ 56-16-115. Maintenance of Reserves — Requirements
Each reciprocal shall maintain the same unearned premium and loss or claim reserves required for stock and mutual companies writing the same classes of insurance.
§ 56-16-116. Consent to Service of Process
Each attorney of a domestic reciprocal who files the declaration required by § 56-16-201, and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this state, shall file with the department a written power of attorney executed by the attorney appointing the commissioner as […]
§ 56-16-117. Action by or Against Reciprocal — Venue — Service of Process
Any reciprocal doing business in this state may sue or be sued in the name or designation under which its insurance contracts are effected. Any action or suit against a reciprocal may be brought in any county where: Its principal office is located; or The cause of action or any part of the cause of […]
§ 56-16-118. Judgment Against Reciprocal — Effect
Any judgment against a reciprocal based upon legal process duly served as provided in this chapter shall be binding upon the reciprocal and upon each of the reciprocal’s subscribers as their respective interests may appear, in an amount not exceeding their respective contingent assessment liabilities.
§ 56-16-119. Service on Board of Directors by Persons Who Perform Legal or Professional Service
Section 56-3-103 shall not bar a person who performs legal or other professional services for a reciprocal from serving as a member of the board of directors, or committee of the board, or as an officer of the reciprocal because the person receives payment for legal or other professional services rendered to the reciprocal.