Every person who effects insurance in any company organized under the provisions of
this article, and also such person's heirs, executors, administrators and assigns,
continuing to be so insured, shall thereby become members of the company during the
period of insurance and shall be bound to pay losses and such necessary expenses as
accrue in and to the company in proportion to the original amount of such person's
deposit note or notes or cash deposit as made for one annual rate. The directors shall annually at or before the annual meeting, levy a sufficient assessment
on all deposit notes to liquidate all liabilities of the company existing at the time
of the assessment, and they shall make such assessments oftener when necessary. They may also, at or before the annual meeting of each year, estimate the rate of
assessment on the deposit notes which the experience of the company indicates will
be necessary to provide for the losses and expenses for the ensuing year and make
and collect assessments in advance on all deposit notes of the company deemed by the
board sufficient to pay such losses and expenses.
In determining the rate of assessments to be made the directors shall not include
either the guarantee fund, the reserve fund, or the unused portion of the cash premiums
on hand, as funds available for the payment of accrued liabilities, but shall levy
such assessments on the notes as may be necessary in order to require the makers thereof
to pay their ratable shares of all losses and expenses already accrued and estimated
to accrue within the ensuing year. The notices of assessment may be given in such number of different lists throughout
the year as the board deems advisable, having regard to the dates of the policies.
The sums to be paid on any assessment by each member shall always be in proportion
to the original amount of such member's deposit note or notes for one annual rate
and shall be paid to the company within thirty (30) days next after notice of such
assessment is given in the manner provided in the bylaws. The company shall not be liable to the insured for any loss that may occur during
the period from the day on which an assessment on such insured's deposit note is due
and the date of the payment thereof. No such company shall borrow money or create a debt, unless for the purpose of necessary
office buildings, to continue beyond the period when such assessment may be collected
and applied to the payment thereof, and no member shall be assessed for liabilities
prior to such member's membership.
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