20-1568. Unearned premium reserve
A. Every title insurer shall, in addition to other reserves, establish and maintain
a reserve to be known as the "unearned premium reserve" for title insurance on real
estate, which shall, at all times and for all purposes, be deemed and shall constitute
the unearned portions of premiums due or received on account of such insurance and shall
be charged as a reserve liability of such title insurer in determining its financial
condition. A foreign title insurer doing business in this state may establish an
unearned premium reserve for title insurance on real estate in accordance with the laws
of its domiciliary state, provided an unearned premium reserve is mandatory under the law
of its domiciliary state and such law is substantially equivalent to the requirements of
this title.
B. The unearned premium reserve for title insurance on real estate shall be
retained and held by such title insurer for the protection of the policyholders' interest
in policies on real estate which have not expired. Except as provided in section 20-1571,
assets equal to the amount of such reserve shall not be subject to distribution among
other creditors or stockholders of such title insurer until all claims of policyholders
or holders of title insurance contracts or agreements of such title insurer have been
paid in full and all liability on the policies or title insurance contracts or
agreements, whether contingent or actual, has been discharged or lawfully
reinsured. Income from the investment of the amount of such reserve shall be the
unrestricted property of the title insurer.
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