§ 20-509 — Increase of inadequate reserves

A. If the director determines that an insurer's unearned premium reserve, however computed, is inadequate, the director may require the insurer to compute the reserve or any part of the reserve according to methods prescribed in this article.

B. If the loss experience of an insurer shows that its loss reserves, however estimated, are inadequate, the director shall require the insurer to maintain loss reserves in an increased amount as needed to make the loss reserves adequate.

C. If the insurer's anticipated losses, loss adjustment expenses, commissions and other acquisition costs and maintenance costs are more than the recorded unearned premium reserve and any future installment premiums on existing policies, the insurer shall establish a premium deficiency reserve by recording an additional liability for the deficiency according to the accounting practices and procedures manual adopted by the national association of insurance commissioners.