Impairment of capital

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  • (a) If the capital stock of a domestic stock insurer becomes impaired, the Commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to require its stockholders to make good the deficiency within 90 days after service of such notice.

  • (b) The deficiency shall be made good in cash, or in assets eligible under this title for the investment of the insurer's funds, or by reduction of the insurer's capital stock to an amount not below the minimum required for the kinds of insurance to be thereafter transacted.

  • (c) If the deficiency is not made good and proof thereof filed with the Commissioner within such 90-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title.

  • (d) After service of notice as provided in subsection (a) of this section the insurer shall not issue or deliver any policy until after the deficiency shall have been corrected and proof thereof filed with the Commissioner and approved by him. Any officer or director who violates or knowingly permits the violation of this provision shall be subject to a fine of from $50 to $1,000 for each violation.


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