§431:5-101  Impairment of capital.

  (a)(1)  A domestic stock insurer's capital stock shall be deemed to be impaired if its qualified assets at any time are less than its liabilities, including its capital stock as a liability.

     (2)  If a domestic insurer's capital stock is deemed to be impaired, the commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to cure the deficiency within ninety days after service of such notice.

     (b)  The insurer may cure the deficiency by assessment of stockholders, by action of its board of directors, or by other lawful means.  The deficiency shall be cured:

     (1)  By the provision of cash or other assets eligible under this code for the investment of the insurer's funds; or

     (2)  By reduction of the insurer's capital stock to an amount not below the minimum required by either section 431:3-205, section 431:3-207 or section 431:3-208 for the classes of insurance to be thereafter transacted.

     (c)  Shares as to which such an assessment, made pursuant to this section, is not paid within sixty days after demand, shall be forfeitable and may be cancelled by vote of the directors and new shares issued to make up the deficiency.

     (d)  If the deficiency is not cured and proof thereof filed with the commissioner within the ninety-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by article 15.

     (e)  If the deficiency is not cured, the insurer shall not issue or deliver any policy after the expiration of the ninety-day period.  Any officer or director who violates or knowingly permits the violation of this provision shall be fined not less than $500 nor more than $10,000 for each violation. [L 1987, c 347, pt of §2]