(a) If the capital of a domestic stock insurer becomes impaired or the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it by this chapter for authority to transact the kinds of insurance being transacted, the Commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to make good the deficiency within 60 days after service of the notice.

(b) The deficiency may be made good in cash or in assets eligible under this title for the investment of the insurer's funds; or if a stock insurer by reduction of the insurer's capital to an amount not below the minimum required for the kinds of insurance thereafter to be transacted; or if a mutual insurer, by amendment of its certificate of authority to cover only such kinds of insurance for which the insurer has on deposit sufficient surplus.

(c) If the deficiency is not made good and proof of the act filed with the Commissioner within such 60 day period, the insurer shall be deemed insolvent and the Commissioner shall institute delinquency proceedings against it as authorized by this title. If the deficiency exists because of increased loss reserves required by the Commissioner or because of disallowance by the Commissioner of certain assets or reduction of the value at which carried in the insurer's accounts, the Commissioner may in his or her discretion and upon application and good cause shown extend for not more than an additional 60 days the period within which the deficiency may be so made good and the proof thereof so filed.