26-27-125. Nonassessable policies.

(a) If a reciprocal insurer has a surplus of assets over all liabilities at least equal to the minimum capital stock and surplus required to be maintained by a domestic stock insurer authorized to transact like kinds of insurance, upon application of the attorney and as approved by the subscribers' advisory committee, the commissioner shall issue his certificate authorizing the insurer to extinguish the contingent liability of subscribers under its policies then in force in this state and to omit provisions imposing contingent liability in all policies delivered or issued for delivery in this state for as long as all the surplus remains unimpaired.

(b) If the surplus is impaired, the commissioner shall immediately revoke the certificate. The revocation does not render subject to contingent liability any policy then in force and for the remainder of the period for which the premium has been paid. After revocation no policy shall be issued or renewed without providing for the subscriber's contingent assessment liability.

(c) The commissioner shall not authorize a domestic reciprocal insurer to extinguish the contingent liability of any of its subscribers or in any of its policies to be issued, unless it qualifies to and does extinguish the liability of all its subscribers and in all the policies for all kinds of insurance it transacts. If required by the laws of another state in which the insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of those of its subscribers as acquire the policies in that state, and need not extinguish the contingent liability applicable to policies previously in force in that state.