§ 4109. Mutual companies; special contingent surplus. (a) A domestic
mutual property/casualty insurance company licensed to write any of the
kinds of insurance defined respectively in the following paragraphs of
subsection (a) of section one thousand one hundred thirteen of this
chapter: accident and health (item (i) of (3)), non-cancellable
disability (item (ii) of (3)), burglary and theft (7), glass (8), boiler
and machinery (9), elevator (10), animal (11), personal injury liability
(13), property damage liability (14), workers' compensation and
employers' liability (15), fidelity and surety (16) or credit (17),
shall establish on its general ledger a special contingent surplus and
shall thereafter maintain the same unimpaired so long as it is licensed
to write one or more of the foregoing kinds of insurance. An impairment
exists in the surplus of any such company at any time when the aggregate
value of its admitted assets is less than the amount of all of its
liabilities and the special contingent surplus which it is required to
maintain at such time.

(b) During each full calendar year except the first two full calendar
years next following the calendar year in which such company was
licensed to write any kind of insurance specified in subsection (a)
hereof, the amount of such contingent surplus shall exceed the required
amount thereof at last year-end, by an amount at least equal to one and
one-half percent of the net premium income received for the kinds of
insurance referred to in subsection (a) hereof during such whole
calendar year, until the amount of such contingent surplus shall be at
least equal to the amount of surplus to policyholders required under
section four thousand one hundred three of this article to be maintained
by a similar domestic stock property/casualty insurance company licensed
to do any one or more of the kinds of insurance specified in subsection
(a) hereof. Such special contingent surplus, by whatever name called,
shall be inclusive of the minimum surplus required by the provisions of
this chapter and shall be exclusive of any divisible surplus available
for the payment of dividends.

(c) No domestic mutual property/casualty insurance company shall
declare or pay any dividend to policyholders if, after the payment of
such dividend, its special contingent surplus as herein required will be
impaired. The declaration and payment of dividends by any such company
shall be subject to the provisions of section one thousand two hundred
eleven of this chapter.

(d) Any domestic mutual property/casualty insurance company shall be
authorized in any year to further increase its special contingent
surplus by an amount in excess of the annual accumulation required by
this section, and any such excess shall be credited upon the amount
which otherwise it would have been required to accumulate by the
provisions of this section in any subsequent year or years.

(e) The superintendent may refuse to issue a license or renewal
license to do an insurance business in this state to any foreign or
alien mutual property/casualty insurance company which does not comply
in substance with this section applicable to a similar domestic mutual
property/casualty insurance company licensed to write the same kind or
kinds of insurance.