89. An authorized insurer must be a member, for the classes for which it is authorized to carry on an activity, of a compensation body recognized by the Authority for that class.
The first paragraph does not apply to the activities carried on by a mutual company that is a member of a federation for which the federation stands surety. Neither does that paragraph apply to reinsurer activities.
For the purposes of this Act, a compensation body is a body whose members are insurers and whose purpose is to protect the holders of insurance contracts underwritten by one of those insurers from excessive financial loss in the event of that insurer’s insolvency.