TITLE 41

INSURANCE

CHAPTER 34

HOSPITAL AND PROFESSIONAL SERVICE CORPORATIONS

41-3422.  Surplus fund. (1) Every service corporation shall set aside into a "surplus fund" an amount of money equal to not less than two per cent (2%) of all sums hereafter received by it on account of subscriber’s contracts, until such surplus fund amounts to not less than fifty thousand dollars ($50,000) if a professional service corporation or hospital service corporation or one hundred thousand dollars ($100,000) if a combination professional-hospital service corporation.

(2)  After such minimum surplus fund is established the service corporation may in like manner increase it to an amount not to exceed the total gross collections from subscribers during the seven (7) months next preceding.

(3)  That portion of the surplus fund referred to in subsection (1) above, may be used by the service corporation, by express appropriation therefrom by action of its board of directors, solely if necessary to pay the additional health care costs and expenses under its contracts, resulting from disease, epidemic or catastrophic occurrences in which numerous persons were injured in the same such occurrence.

(4)  If at any time depleted below the minimum amount required under subsection (1) above, the service corporation shall replenish the fund by a resumption or continuance of allocations thereto from subscribers’ payments, as provided for original accumulation of the fund under subsection (1), or by such other reasonable means as may be approved by the director.

History:

[41-3422, added 1961, ch. 330, sec. 780, p. 645; am. 1967, ch. 399, sec. 13, p. 1194; am. 1971, ch. 252, sec. 13, p. 1008.]