TITLE 27
Insurance

CHAPTER 27-5
Fire Insurance Policies and Reserves

SECTION 27-5-31


§ 27-5-31 Termination of surplus and reserve fund method – Return of special reserve fund.

Any company which has established a guaranty surplus fund and special reserve fund may, at a regular meeting of its board of directors, or at a special meeting called for that purpose, adopt a resolution declaring its desire and intention to discontinue those funds and to cease to do business under and in pursuance of the provisions of law relating to those funds, and file a certified copy of that resolution with the insurance commissioner. Upon the adoption and filing of that resolution, all rights of the company to withhold a special reserve fund from its general creditors shall be terminated and the company shall discontinue printing upon its policies or renewals the notice provided for in § 27-5-29, and after this the provisions of this chapter so far as they relate to those funds shall cease to apply to the company; provided, that the special reserve fund of the company shall continue at the amount prescribed by the provisions of this chapter at the date of the making and filing of the resolution and the guaranty surplus fund may continue at a like amount, but those funds need not be increased on account of any increase in capital of the company or otherwise after the adoption and filing of the resolution and shall be held and invested as provided in §§ 27-5-15 – 27-5-31, but only for the purpose of assuring to the holders of policies at the time the resolution is filed with the insurance commissioner any rights and privileges as may inure to them under §§ 27-5-15 – 27-5-31. At the expiration of five (5) years after the adoption and filing of the resolution by the company, the special reserve fund shall be reduced to an amount equal to the unearned premium upon and all losses incurred and unpaid under any remaining policies which were outstanding at the time of the adoption and filing of the resolution. The excess of the special reserve fund above that amount shall be returned by the insurance commissioner to the company, and when all policies which were outstanding at the time of the adoption and filing of the resolution shall have terminated by expiration or by cancellation, the entire balance of the special reserve fund shall be returned to the company.

History of Section.
(G.L. 1909, cn. 219, § 34; P.L. 1919, ch. 1783, § 1; G.L. 1923, ch. 255, § 34; G.L. 1938, ch. 150, § 33; impl. am. P.L. 1953, ch. 3174, § 5; G.L. 1956, § 27-5-31.)