1. No company formed upon the mutual plan for the purpose of doing the fire and marine business designated in the first of the three classes of insurance named in section 379.010 shall commence or continue to do business until it has a surplus or guaranty fund of one million six hundred thousand dollars and agreements have been entered into for insurance with at least two hundred applicants, the premiums on which shall amount to not less than one hundred thousand dollars which shall have been paid in cash. Annual cash premiums shall not exceed five hundred dollars each, and no policy shall be issued for a longer term than five years.

2. Except that any mutual company formed upon the mutual plan for the purpose of doing the fire and marine business designated in the first of the three classes of insurance named in section 379.010 and licensed to do business in this state on July 1, 1987, which did not maintain an aggregate amount of at least one million six hundred thousand dollars as a guaranty fund or policyholders’ surplus on December 31, 1986, may renew its license for business specified therein if it annually maintains agreements with two hundred applicants, the premiums from which amount to not less than one hundred thousand dollars, and if it maintains an aggregate amount of not less than eight hundred thousand dollars as a guaranty fund or policyholders’ surplus, if all other conditions have been met, until December 31, 1989, at which time the provisions of subsection 1 of this section shall be met.

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3. Violation of any of the provisions of this section by an insurer is grounds for the revocation of its certificate of authority by the director.