Massachusetts § 90B - Policies; issuance by mutual fidelity and corporate surety companies; guaranty capital; members

§ 90B. Policies; issuance by mutual fidelity and corporate surety companies; guaranty capital; members

Section 90B. No policy shall be issued by a mutual company formed to transact business under the fourth clause of section forty-seven until it has established a fully paid up guaranty capital of not less than the combined capital and surplus provisions required under section forty-eight which shall be subject to the provisions of section seventy-nine, except as hereinafter and in section ninety-three D provided.

Any such company may, subject to all the provisions of section seventy-nine relative to the increase of the guaranty capital of a domestic mutual fire company increase said guaranty capital subject to the written approval of the commissioner. While a company is transacting business under said fourth clause, the provisions of section seventy-nine relative to the retirement of guaranty capital of a mutual fire company shall not apply, nor shall the provisions of said section relative to the reduction of guaranty capital authorize the reduction of its guaranty capital below the combined capital and surplus provisions required under section forty-eight.

Upon establishing any guaranty capital in an amount in excess of five hundred thousand dollars or increasing its guaranty capital to an amount in excess thereof, any mutual company formed to transact business under said fourth clause shall deposit with the state treasurer the sum of two hundred thousand dollars. Such deposit may be made in securities and in that event shall be subject to the limitations contained in sections sixty-three and sixty-six, or may be made in cash or such other securities as the commissioner may approve, and in any event shall be subject to section one hundred and eighty-five.

Whenever the amount of the net surplus, computed on the basis fixed by sections ten to twelve, inclusive, of any mutual company formed to transact business under said fourth clause which has a guaranty capital of more than the combined capital and surplus provisions required under section forty-eight equals twice the amount of said guaranty capital, said guaranty capital shall be reduced to the combined capital and surplus provisions required under section forty-eight by an appropriation of such net surplus for that purpose.

The principal on any bond or obligation executed by a mutual company as surety shall be deemed the member of the company under sections seventy-six, seventy-nine, eighty, eighty-one, eighty-three to eighty-five, inclusive, and ninety.