Before any mutual benefit association shall do business in this state, under this article, it shall file in the office of the Insurance Commissioner, a bond of the official custodian of its fund executed by a surety company authorized to do business in this state, to be approved by the Commissioner, in the sum of Ten Thousand Dollars ($10,000.00), to be conditioned for the prompt and full accounting and payment to the association of all of its funds entrusted to the officer and that are in his or her hands, and that he or she will faithfully comply with and perform all and singular the duties and obligations imposed upon him or her by the laws of this state. If any such association shall fail or refuse to make payment of any benefit or claim against the association, after final judgment has been obtained therefor, the Commissioner shall notify the association not to issue any new certificates or solicit new business until such indebtedness is fully paid, and no officer or agent of such association shall make, sign or issue any certificate of insurance while such notice is in force. Any such mutual benefit association hereafter organized under the laws of this state shall, before it completes its organization and receives a certificate of authority to do business in this state, produce and maintain an emergency or reserve fund of at least Ten Thousand Dollars ($10,000.00), and such reserve or emergency fund produced and maintained as herein provided shall be invested in such securities as may be approved by the Commissioner, as required by law for the investment of such funds, and they shall be deposited with the Commissioner and be held by him or her in trust as an emergency fund for the benefit and protection of, and as security for, the certificate holders of such associations, their legal representatives or beneficiaries, and they shall have a lien to the extent of any valid claim arising out of a valid certificate, after such claim has been allowed by the association or established by a final judgment of a court of competent jurisdiction. Such securities as are deposited with the Commissioner, pursuant to this article, shall be part of the admitted assets of the association depositing the same. Two or more such associations authorized to do business in this state where one or all of them have been authorized under the laws of this state, may merge, unite or consolidate, or may cause the business and property, in whole or in part of one or more of the associations to be transferred to one of such associations, or to any insurance association, company or corporation licensed to do business in this state, or to any person or persons: provided, however, before doing so, they shall submit to the Commissioner their agreement relating thereto, and, thereupon, he or she shall approve the same if he or she is satisfied that such merger, consolidation or transfer will not be prejudicial to the rights of the members and that such association can comply with the terms and conditions prescribed by law for the conduct and operation thereof.

Added by Laws 1957, p. 319, § 2406, operative July 1, 1957. Amended by Laws 2014, c. 275, § 10, eff. Nov. 1, 2014.