§ 6111. Assets, liabilities and surplus. (a) All of the assets of any
reciprocal insurer including subscribers' operating reserves shall be
liable primarily for payment of all liabilities incurred under its
policies or other contracts.

(b) No part of the surplus funds of such reciprocal insurer shall be
subject to the claims of general creditors of any of the individual
subscribers of such insurer until all policies under which any such
subscriber is obligated have been terminated and in no event beyond the
amount of such subscriber's operating reserve.

(c) The contingent liability of subscribers for additional premiums or
assessments shall not be included as an asset in the financial statement
of a reciprocal insurer.

(d) Subscribers' operating reserves for which notice of withdrawal has
been given shall be reported as liabilities until paid.

(e) In any statement or report of the financial condition of a
reciprocal insurer filed in this state, the surplus to policyholders,
after providing for the unearned premium reserves, loss reserves and
other liabilities, as required by this chapter, shall be reported as
follows:

(1) special contingent surplus;

(2) subscribers' operating reserves, if required;

(3) all other surplus, if any.

(f) Unless the reciprocal is subject to the provisions of article
fifteen of this chapter or substantially similar legislation in its
state of domicile, all material transactions between or among the
reciprocal, its subscribers, the attorney-in-fact and any affiliate of
the attorney-in-fact shall not be entered into, unless they have been
filed with the superintendent at least thirty days prior thereto and the
superintendent has not disapproved them; provided, however, that any
such transaction involving five percent or more of the reciprocal's
admitted assets shall be subject to prior approval of the superintendent
and all transactions shall meet the following standards:

(1) The terms shall be fair and equitable;

(2) Charges or fees for services performed shall be reasonable; and

(3) Expenses incurred and payments received shall be allocated to the
reciprocal on an equitable basis in conformity with statutory insurance
accounting practices consistently applied.