(a) Twenty (20) or more farmers, all of whom shall be residents of this state, may make mutual pledges and give valid obligations to each other for their insurance against loss or damage by fire, tornado, lightning, cyclone, windstorm, hail, explosion with or without fire ensuing, smoke, or direct loss or damage to insured property caused by moving vehicles and airplanes, riot, riot attending a strike, and civil commotion.

(b) These associations shall not insure any property not owned by one (1) of its members.

(c) Directors of public school districts of any kind and trustees of churches may become members of such an association in their representative capacities, for the purpose of insuring schoolhouses and churches.

(d) These associations may write coverage, at their election, for collapse of buildings from the weight of ice and snow.

(e) An association shall file all forms, including policy forms, application forms, rider or endorsement forms, or forms of renewal certificate for the coverages contained in subsections (a) and (d) of this section with the Insurance Commissioner. These filings shall be for informational purposes only.

(f) The associations may also write burglary and theft, glass, leakage, and fire extinguisher equipment, livestock, miscellaneous coverage, and liability, provided those coverages are written as a supplement, or package commonly referred to as a homeowner or farmowner policy, to a fire insurance policy, if the commissioner approves the reinsurance agreement as to the liability portions or obligations under these policies.

(g) (1) Before an association may write coverages:

(A) The policy form shall have prior approval of the commissioner, in accordance with § 23-79-109; and

(B) An association that writes any of the coverages listed in subsection (f) of this section shall maintain a minimum of fifty thousand dollars ($50,000) to be deposited with the commissioner in the form of securities eligible for deposit under § 23-63-903.

(2)

(A) Each association shall maintain an unimpaired minimum surplus of five hundred thousand dollars ($500,000).

(B)

(i) If compliance with this section would cause the association to become impaired or insolvent, the commissioner may allow the association to augment incrementally its unimpaired minimum surplus in order for the association to achieve compliance no later than December 31, 2010.

(ii) For good cause shown in writing by an association, the commissioner may grant not more than two (2) extensions for not more than two (2) years per extension of the deadline set for compliance in subdivision (g)(2)(B)(i) of this section.

(3) However, if the association reinsures its obligations under the coverages listed in this section to the extent of one hundred percent (100%), the commissioner, in his or her discretion, may waive the deposit requirement under this section.

(4) The deposit is subject to:

(A) The payment of creditors and the prompt payment of all claims arising and accruing to any person in this state; and

(B) The conditions specified in § 23-63-909.

(h) Premiums received on policies sold containing the coverages listed in subsection (f) of this section shall be subject to the provisions of § 26-57-601 et seq. relating to premium taxes.