Section 612.54. Assessments.
Latest version.
- (1) Conditions for levying assessments.(a) Mandatory assessments. The board of a town mutual shall levy an assessment whenever the amount of any loss or expense that is due exceeds the assets or whenever any required surplus is impaired.(b) Optional assessments. The board may at any time levy assessments as provided in the articles, for the purpose of paying losses or expenses, repaying borrowed money or creating a reasonable surplus.(2) Limitations on assessability. The commissioner may by order authorize a town mutual to limit assessability of policies to a multiple of the advance premium if the town mutual's surplus and business practices satisfy the commissioner of its solidity even with the limited assessability.(3) Classification. Assessments may be levied at the same rate on all members or according to a classification plan approved under s. 612.34 (2) . Assessments not exceeding the annual premium of the terminated policy may also be levied on persons whose membership has terminated within 4 months before the assessment, to pay losses incurred before the end of the month of termination of membership, to repay money borrowed to pay those losses and to pay other expenses.(4) Notice. Notice of any assessment shall be sent by mail to each person subject to it, at least 30 days prior to the date it is payable. The notice shall state:(a) The rate of the assessment and the class of business or coverage to which it applies;(b) The reason for the assessment;(c) The amount to be paid by the individual person;(d) The date on which the assessment is due;(e) The person to whom payment is to be made; and(f) The consequences of failure to pay, as provided in sub. (5) .(5) Consequences of default.(a) Penalty. Every person who fails to pay his or her assessment within the time specified in the notice under sub. (4) shall pay to the town mutual a penalty of 2 percent of the assessment for each week or part thereof during which the assessment remains unpaid, until the accumulated penalty equals 100 percent of the assessment. Thereafter the amount of the assessment and accumulated penalty shall bear interest at the legal rate.(b) Termination of coverage. If, at the time of a loss, any assessment any part of which is to cover losses or expenses already incurred under the same policy or under a previous policy covering the same property and the same insureds has remained unpaid in any part for 30 days after it is due, the loss shall not be paid except to a mortgagee under a mortgagee clause that provides for payment despite policy defenses. The policy shall also terminate after the loss. This paragraph shall apply only to any assessment some part of which is to cover incurred losses or expenses.(c) Enforcement. An assessment shall constitute a personal obligation of each member and payment may be enforced by appropriate action.(6) Notice to mortgagee. If losses under any policy are payable to a mortgagee despite default on an assessment and the assessment on the policy is not paid within the time specified in the notice to the member, the secretary shall, within 30 days after the expiration of such time, give like notice to the mortgagee. If the mortgagee pays the assessment within 20 days from the date of notice, the policy shall continue in force, as to the mortgagee's interest only, until the expiration of its regular term, subject to subsequent assessments of which the mortgagee is notified, and to cancellation by either party.