§ 26-23-309 — Reinsurance reserve

(a) A domestic title insurer shall establish and maintain
a reinsurance reserve computed in accordance with this section,
and all sums attributed to that reserve are considered and
constitute unearned portions of the original premiums. This
reserve shall be reported as a liability of the title insurer in
its financial statements.
(b) The reinsurance reserve shall be maintained by the
title insurer for the protection of holders of title insurance
policies. Except as provided in this section, assets equal in
value to the reinsurance reserve are not subject to distribution
among creditors or stockholders of the title insurer until all
claims of policyholders or claims under reinsurance contracts
have been paid in full, and all liability on the policies or
reinsurance contracts has been paid in full and discharged or
lawfully reinsured.
(c) A foreign or alien title insurance company licensed to
transact title insurance business in this state shall maintain
at least the same reserves on title insurance policies issued on
properties located in this state as are required of domestic
title insurance companies, unless the laws of the jurisdiction
of domicile of the foreign or alien title insurance company
require a higher amount.
(d) The reinsurance reserve shall consist of:
(i) The amount of the reinsurance reserve on May 27,
1983; and
(ii) A sum equal to twenty cents ($.20) for each one
thousand dollars ($1,000.00) of net retained liability under
each title insurance policy on a single risk written on
properties located in this state written after May 27, 1983.
(e) Amounts placed in the reinsurance reserve in any year
in accordance with paragraph (d)(ii) of this section shall be
deducted in determining the net profit of the title insurer for
that year.
(f) A title insurer shall release from the reinsurance
reserve a sum equal to the appropriate amount as set forth in
the most recent National Association of Insurance Commissioners'
accounting practices and procedures manual. The amount of the
reinsurance reserve or similar unearned premium reserve
maintained before July 1, 2001, shall be released in accordance
with the law in effect at the time such reserves became
effective.