A. In addition to the paid in capital and surplus provided in section 20-1542 each mortgage guaranty insurer shall establish a contingency reserve after establishing the unearned premium reserve. The mortgage guaranty insurer shall annually contribute to the contingency reserve an amount that in the aggregate is the greater of either fifty percent of the net earned premium or the minimum policyholder position required by section 20-1550 divided by ten. The annual contributions to the contingency reserve made during each calendar year shall be maintained for a period of one hundred twenty months, except that the insurer may make withdrawals in any year in which the actual incurred losses and loss expenses exceed thirty-five percent of the corresponding net earned premiums, and these releases shall not be made without prior approval by the insurance director or commissioner of the insurer’s state of domicile.

B. In addition to withdrawals made pursuant to subsection A of this section, with the prior approval of the insurance director or commissioner of the insurer’s state of domicile, the mortgage guaranty insurer may withdraw from the contingency reserve an amount that is not more than the amount by which the policyholder position exceeds the minimum policyholder position prescribed in section 20-1550. The mortgage guaranty insurer shall provide or identify any information, analysis and other necessary documentation that supports the request submitted to the director or commissioner.