Section 6705. Relevant criteria

(a)  In  applying  this  article,  the
  superintendent  shall  consider  the  provisions  of  paragraph  (3)  of
  subsection  (c)  of  section  501  of  the  Internal  Revenue  Code  and
  subsection (n) of section 501 of the Internal Revenue Code.
    (b)  Notwithstanding  any  other  provision  of   law,   a   nonprofit
  property/casualty insurance company shall:
    (1) be operated solely to insure risks of its members.
    (2)  directly  provide information to its members with respect to loss
  control and risk management.
    (3) obtain at least  one  million  dollars  in  startup  capital  from
  nonmember  charitable  organizations.  Such startup capital may take the
  form of subventions as authorized pursuant to section five hundred  four
  of  the  not-for-profit corporation law or advancements or borrowings as
  authorized pursuant to section one thousand three hundred seven of  this
  chapter.   Startup   capital  may  be  used  to  satisfy  the  financial
  requirements  contained  in  this  chapter  applicable  to  a  nonprofit
  property/casualty   insurance   company   only   to   the   extent   the
  superintendent determines  that  it  complies  with  such  requirements.
  Subventions  will  qualify  as  advancements  or  borrowings  authorized
  pursuant to section one thousand three hundred  seven  of  this  chapter
  only  if  they  meet  the  requirements  of  advancements  or borrowings
  authorized pursuant to such section.
    (4) be controlled by a board of directors elected by  the  members  of
  the nonprofit property/casualty insurance company.
    (5) require, in its organizational documents that:
    (A)  each member of such nonprofit property/casualty insurance company
  shall at all times be an organization  described  in  paragraph  (3)  of
  subsection  (c)  of  section 501 of the Internal Revenue Code and exempt
  from tax under subsection (a) of section 501  of  the  Internal  Revenue
  Code.
    (B)  any member which receives a final determination that it no longer
  qualifies as an organization described in paragraph  (3)  of  subsection
  (c) of section 501 of the Internal Revenue Code shall immediately notify
  the  nonprofit property/casualty insurance company of such determination
  and the effective date of such determination.
    (C) each policy of insurance issued by the nonprofit property/casualty
  insurance company shall provide that such  policy  will  not  cover  the
  insured  with  respect  to  events  occurring  after the date such final
  determination was issued to the insured.
    (c) A nonprofit property/casualty insurance company shall:
    (1) not refuse to issue, renew or cancel a  policy  of  any  insurable
  nonprofit organization based solely on geographic location,
    (2)  not  refuse  to  write coverages afforded by such insurer for any
  insurable nonprofit organization in accordance with  subsection  (d)  of
  this section,
    (3)  establish and promote a risk management program among its members
  to identify and reduce risks by implementation of loss  control,  safety
  programs and other methods of risk management,
    (4)   establish  equitable  risk  classifications  for  all  types  of
  nonprofit organizations, and
    (5) establish recordkeeping and reporting procedures.
    (d) A nonprofit property/casualty insurance company shall, subject  to
  regulatory standards, offer to provide coverage following application by
  an   eligible   nonprofit  organization,  provided  that  the  nonprofit
  organization has not:
    (1) violated applicable laws, regulations and rules;
    (2) been  involved  in  financial,  management  or  operational  acts,
  omissions  or  conditions that substantially and materially increase the

  hazards to the nonprofit insurer, its solvency, its  policyholders,  its
  creditors, or the public;
    (3) engaged in fraud or material misrepresentation;
    (4) refused to cooperate with reasonable risk management in accordance
  with  risk  management  standards,  approved  by the nonprofit insurer's
  board  of  directors,  for  the  purpose  of  protecting  the  nonprofit
  organization   itself  and  all  participating  nonprofit  organizations
  insured by the nonprofit insurer; or
    (5) violated such other standards of  insurability  as  the  nonprofit
  insurer's board of directors and the superintendent may approve.
    The  nonprofit property/casualty insurance company, in any instance of
  declination of coverage, shall inform the nonprofit organization and the
  superintendent of the reasons for such declination.