Proceedings for Correction of Deficiency in Assets or Capital of Insurer; Institution of Delinquency Proceedings Upon Failure to Correct Deficiency

  1. Law
  2. Georgia Code
  3. Insurance
  4. Domestic Stock and Mutual Insurers
  5. General Provisions
  6. Proceedings for Correction of Deficiency in Assets or Capital of Insurer; Institution of Delinquency Proceedings Upon Failure to Correct Deficiency

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  1. If the capital of a domestic stock insurer becomes impaired or the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this chapter for authority to transact the kinds of insurance being transacted, the Commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of the notice.
  2. The deficiency may be made good in cash or in assets eligible under this title for the investment of the insurer's funds; or if a stock insurer by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only such kinds of insurance for which the insurer has on deposit sufficient surplus.
  3. If the deficiency is not made good and proof of the act filed with the Commissioner within such 60 day period, the insurer shall be deemed insolvent and the Commissioner shall institute delinquency proceedings against it as authorized by this title. If the deficiency exists because of increased loss reserves required by the Commissioner or because of disallowance by the Commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the Commissioner may in his or her discretion and upon application and good cause shown extend for not more than an additional 60 days the period within which the deficiency may be so made good and the proof thereof so filed.

(Code 1933, § 56-1531, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 2000, p. 1246, § 4.)

Cross references.

- Delinquency proceedings generally, T. 33, C. 37.

OPINIONS OF THE ATTORNEY GENERAL

The proper method of disposing of accumulated and undisbursed receivership funds held by the Insurance Commissioner in cases where creditors or claimants of defunct domestic stock and mutual insurance companies cannot be located or where checks issued to them for their pro rata portion have been for any reason returned unpaid is to turn such funds over to the Fiscal Division of the Department of Administrative Services (now Office of Treasury and Fiscal Services), which shall ultimately remit the funds to the Board of Regents of the University System of Georgia; in cases involving all other types of defunct insurance companies, the Insurance Commissioner should petition the superior court that supervised the particular insurance company's dissolution proceedings for leave to deposit the accumulated and undisbursed receivership funds in its registry to be subsequently dealt with by order of the court as it deems advisable. 1975 Op. Att'y Gen. No. 75-83.

RESEARCH REFERENCES

Am. Jur. 2d.

- 43 Am. Jur. 2d, Insurance, § 83.

C.J.S.

- 44 C.J.S., Insurance, § 144.

ALR.

- Fire insurance: insolvency of, or appointment of receiver for, insurer as affecting subsequent losses, 79 A.L.R. 1267.

Insolvency of insurers as affecting liability of one under duty by statute or contract to carry or maintain insurance for another's protection, 106 A.L.R. 248.

Insolvency of insurer at time of issuing policy as defense against action to collect assessments or premiums, 170 A.L.R. 1008.


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