20-1556. Contingency reserve
A. In addition to the paid in capital and surplus provided in section 20-1542 each
mortgage guaranty insurer shall establish a contingency reserve after establishment of
the unearned premium reserve. The mortgage guaranty insurer shall annually contribute to
the contingency reserve an amount which in the aggregate is the greater of either fifty
per cent of the net earned premium or the minimum policyholder position required by
section 20-1550 divided by ten. The annual contributions to the contingency reserve made
during each calendar year shall be maintained for a period of one hundred twenty months,
except that withdrawals may be made by the insurer in any year in which the actual
incurred losses and loss expenses exceed thirty-five per cent of the corresponding net
earned premiums, and these releases shall not be made without prior approval by the
director of insurance of the insurer's state of domicile.
B. In addition to withdrawals made pursuant to subsection A of this section, with
the prior approval of the director or commissioner of the department of insurance of the
insurer's state of domicile, the mortgage guaranty insurer may withdraw from the
contingency reserve an amount that is not more than the amount by which the policyholder
position exceeds the minimum policyholder position prescribed in section 20-1550. The
mortgage guaranty insurer shall provide or identify any information, analysis and other
necessary documentation that supports the request submitted to the director or
commissioner.
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