Sec. 32. (a) If a policyholder is assessed and fails to pay the assessment, the farm mutual insurance company may, upon providing written notice of failure to pay:

(1) suspend the farm mutual insurance company’s liability for loss under the policyholder’s insurance policy for the time during which the assessment is not paid; or

(2) cancel the policyholder’s insurance policy if the assessment is not paid less than thirty (30) days after notice of the assessment is sent to the policyholder.

The farm mutual insurance company may deduct the assessment from the policyholder’s deposit before returning the remainder of a deposit, if any, to the policyholder.

     (b) If an assessment is paid by a policyholder after a farm mutual insurance company takes an action under subsection (a), the farm mutual insurance company may reinstate the policyholder’s insurance policy effective beginning on the date on which the payment is received, but a deduction or credit may not be made to an assessment because of the suspension of the insurance policy.

     (c) A farm mutual insurance company may file an action to compel a policyholder to pay an assessment.

As added by P.L.129-2003, SEC.8.