2009 New Jersey Code
TITLE 17 - CORPORATIONS AND INSTITUTIONS FOR FINANCE AND INSURANCE
Section 17:46A
17:46A-3 - Capital, surplus and contingency reserve requirements

17:46A-3.  Capital, surplus and contingency reserve requirements
    (a) An insurance company shall not transact the business of mortgage guaranty insurance unless it has paid-in capital of at least $1,000,000.00 and paid-in surplus of at least $1,000,000.00.

    (b) In addition to the paid-in capital and surplus provided in subsection (a), each mortgage guaranty insurance company shall establish a contingency reserve out of net premiums remaining (gross premiums less premiums returned to  policyholders) after establishment of the unearned premium reserve.  To the  contingency reserve the insurance company shall contribute an amount equal to  50% of such remaining premiums.  The yearly contributions to the contingency  reserve made during each calendar year shall be maintained for a period of 180  months, except that withdrawals may be made by the insurance company in any  given year in which the actual losses exceed the expected losses.  The  commissioner shall, by regulation, determine when an insurance company may make  withdrawals from its contingency reserve.

    (c) A mortgage guaranty insurance company shall not at any time have outstanding a total liability under its aggregate insurance policies exceeding 25 times its policyholders surplus, such liability to be computed on the basis of the insurance company's liability under its election as provided in subsections (c) and (d) of section 4.  In the event that any insurance company has outstanding total liability exceeding 25 times its policyholders surplus, it shall cease transacting new business until such time as its total liability no longer exceeds 25 times its policyholders surplus.

    (d) A mortgage guaranty insurance company shall not declare any dividends except from undivided profits remaining on hand over and above the aggregate of  its paid-in capital, paid-in surplus and contingency reserve.

     L.1968, c. 248, s. 3, eff. Aug. 12, 1968.