2013 Maryland Code
INSURANCE
§ 5-206 - Guaranty fund or unearned premium reserves for title insurance contracts


MD Ins Code § 5-206 (2013) What's This?

§5-206.

(a) (1) In addition to adequate reserves required by § 5-103 of this title for outstanding losses, a title insurer shall maintain a statutory reserve or unearned premium reserve of at least an amount computed as follows:

(i) 8% of the total amount of the risk premiums written in the calendar year for title insurance contracts shall be as assigned originally to the reserves; and

(ii) during each of the 20 years that follow the year in which the contract is issued, the reserves applicable to the contract shall be reduced in accordance with the following formula:

1. 35% of the aggregate sum on July 1 of the year next succeeding the year of addition;

2. 15% of the aggregate sum on July 1 of each of the succeeding 2 years;

3. 10% of the aggregate sum on July 1 of the succeeding year;

4. 3% of the aggregate sum on July 1 of each of the succeeding 3 years;

5. 2% of the aggregate sum on July 1 of each of the succeeding 3 years; and

6. 1% of the aggregate sum on July 1 of each of the succeeding 10 years.

(2) (i) The title insurer shall calculate retroactive adjusted statutory reserve or unearned premium reserve on an aggregate basis on January 1, 2010.

(ii) The adjusted aggregate reserve shall be recalculated as if paragraph (1)(ii) of this subsection had been in effect during the 20 years preceding January 1, 2010.

(3) Subject to subsection (c) of this section, the aggregate sum of any excess reserves resulting from a recalculation under this subsection shall be released over a 3-year period in equal installments of one-third each year, beginning with the 2010 calendar year.

(b) (1) Each title insurer shall file with its annual statement required under § 4-116 of this article a certification by a member in good standing of the American Academy of Actuaries as to the adequacy of its reserves required under this section and § 5-103 of this title.

(2) The actuarial certification required of a title insurer must conform to the National Association of Insurance Commissioners’ annual statement instructions for title insurers.

(c) (1) Unearned premium reserves may not be released under subsection (a) of this section to the extent that the release would result in the aggregate reserve falling below the amount required under this section and § 5-103 of this title.

(2) Any amount of unearned premium reserves that may not be released under paragraph (1) of this subsection shall be considered an unearned premium reserve and may not be considered a supplemental reserve.

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