California Insurance Code 12640.16 – (a) The provisions of Article 10 (commencing with Section 900), …
(a) The provisions of Article 10 (commencing with Section 900), Chapter 1, Part 2, Division 1, relating to financial statements, shall apply to mortgage guaranty insurers.
(b) The unearned premium reserve shall be computed in accordance with the other applicable sections of this code, except that on all policies covering a risk period of more than one year the unearned premium reserve shall be computed in accordance with standards promulgated by the commissioner after appropriate hearings.
Terms Used In California Insurance Code 12640.16
- Commissioner: means the Insurance Commissioner of this State. See California Insurance Code 20
- Contingency reserve: means an additional premium reserve established for the protection of policyholders against the effect of adverse economic cycles. See California Insurance Code 12640.02
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
(c) In addition to the contingency reserve required under Section 12640.04, the case basis method shall be used to determine the loss reserve, which shall include a reserve for claims reported and unpaid and claims incurred but not reported, including:
(i) Estimated losses on insured loans which have resulted in the conveyance of property which remains unsold.
(ii) Insured loans in the process of foreclosure.
(iii) Insured loans in default for four or more months.
(Added by Stats. 1961, Ch. 719.)