Session Laws

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 94A of chapter 175 of the General Laws, as appearing in the 1984 Official Edition, is hereby amended by inserting after the definition of "Domestic exchange" the following definition:-

"Fishing vessel", any vessel, boat, ship or other craft which is used for, equipped to be used for, or a type which is normally used for fishing, or aiding or assisting one or more vessels at sea in the performance of any activity relating to fishing, including, but not limited to, preparation, supply, storage, refrigeration, transportation or processing.

SECTION 2. Section 94B of said chapter 175, as so appearing, is hereby amended by striking out, in line 2, the word "designated" and inserting in place thereof the words:- , including any association of same holding legal title of ownership to a fishing vessel or vessels, designated.

SECTION 3. Section 94D of said chapter 175, as so appearing, is hereby amended by inserting before the first paragraph the following three paragraphs:-

Organizers of a domestic exchange, having obtained a preliminary certificate to solicit subscribers, under section ninety-four C, may obtain a provisional certificate of authority to transact business, upon compliance with the requirements hereinafter provided. Said certificate shall be valid for a period of one hundred and eighty days from the date of issuance. Upon the expiration of said period, the exchange shall petition the commissioner for a permanent certificate of authority to transact business as hereinafter described.

A domestic exchange, in order to obtain a provisional certificate of authority to transact business, shall file with the commissioner an application therefore, accompanied by a declaration signed and sworn to by its attorney in fact setting forth the information required by paragraphs (a) to (k), inclusive. For the purposes of said provisional certifying period, the minimum number of contracts or bona fide applications for insurance shall be at least twenty-five separate risks, aggregating not less than one million two hundred and fifty thousand dollars.

For the purpose of said provisional certifying period, the surplus fund described in paragraph (g), shall be at least one hundred thousand dollars. Any increase in the minimum number of insurance contracts described in subsection (h), during the provisional certifying period, shall be accompanied by a pro rata increase of said surplus fund.

SECTION 4. Section 94D of said chapter 175, as so appearing, is hereby amended by striking out, in line 40, the words "one hundred" and inserting in place thereof the following word:- fifty.

SECTION 5. Said section 94D of said chapter 175, as so appearing, is hereby further amended by adding the following paragraph:-

(k) Any reinsurance contracts entered into by such exchanges must be obtained in accordance with the laws of the commonwealth and in amounts adequate to satisfy the commissioner.

SECTION 6. Section 94F of said chapter 175, as so appearing, is hereby amended by inserting after the word "five", in line 8, the words:- ; provided, however, that no license for a reciprocal insurance exchange consisting of subscribers who are commercial fishing boat owners shall be issued until the applicant has submitted to the commissioner the standards of risk management to be used in evaluating admissions and policy renewals, and until such standards have been certified by the commissioner as being reasonably calculated to provide a risk low enough to permit the reciprocal insurance exchange to remain solvent.

SECTION 7. Section 94H of said chapter 175, as so appearing, is hereby amended by inserting after the word "business", in line 6, the words:- , except that during the provisional certifying period specified in section ninety-four D, said premium reserve shall be prorated to an amount commensurate with the number of contracts held and claims outstanding.

SECTION 8. Said chapter 175 is hereby further amended by striking out section 94I, as so appearing, and inserting in place thereof the following section:-

Section 94I. A reciprocal insurance exchange shall not be required to make any annual report, except as provided in this section.

Every reciprocal insurance exchange shall file annually, on or before March first, or sixty days from such date authorized by the commissioner, with the commissioner a report of its financial condition, verified by oath of its attorney in fact, or in the instance that said attorney in fact is a corporation then by a duly authorized executive officer. Such annual statement shall be made on a blank furnished by the commissioner under section fifteen or on an alternate form acceptable to him. Such alternate form may be an applicable form of annual statement approved by generally accepted accounting principles appropriate for a reciprocal insurance exchange.

At least once in three years, and at other times when the commissioner determines it to be prudent, said commissioner or his designee shall visit each reciprocal insurance exchange, and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations and whether it has complied with the provisions of this chapter. The commissioner, upon application and in his discretion, may enlarge the aforesaid three year period to five years; provided, however, that said reciprocal insurance exchange is subject to a comprehensive annual audit during such period of a scope satisfactory to the commissioner conducted by independent auditors approved by him. The expenses and charges of the examination shall be paid to the commonwealth by the company or companies examined, and the commissioner or his designee shall issue a certificate demanding payment for the proper charges incurred in all examinations.

SECTION 9. Section 94K of said chapter 175, as so appearing, is hereby amended by adding the following sentence:- Notwithstanding the provisions of any general or special law to the contrary, no member of the advisory committee shall not be subject to an action for libel or slander arising out of the conduct of such member in the reasonable performance of his duties.