(a) The statutory premium reserve of every domestic title insurance company shall consist of the aggregate of:
(1) The amount of the unearned premium reserve held as of December 31, 1998.
(2) The amount of all additions required to be made to such reserve by this section, less the reduction of the aggregate amount required by this section.
(b) A domestic title insurance company on and after January 1, 1999, shall reserve initially as a statutory premium reserve a sum equal to ten percent (10%) of the following items set forth in the title insurer’s most recent annual statement on file with the Commissioner:
(1) Direct premiums written.
(2) Premiums for reinsurance assumed less premiums for reinsurance ceded during the year.
(c) The aggregate of the amounts set aside in statutory premium reserves in any calendar year, under subsection (b) of this section, shall be reduced annually at the end of each calendar year following the year in which the policy is issued, over a period of 20 years, pursuant to the following: twenty percent (20%) the first year; ten percent (10%) for years two and three; five percent (5%) for years four through 10; three percent (3%) for years 11 through 15; and two percent (2%) for years 16 through 20.
(d) The entire amount of the unearned premium reserve held as of December 31, 1998, shall be accorded a fresh start and shall be released from said reserve and restored to net profits in accordance with the percentages set forth in subsection (c) of this section.
(e) A supplemental reserve shall be established in accordance with the instructions of the annual statement required by G.S. 58-2-165 and G.S. 58-26-10 consisting of the reserves necessary, when taken in combination with the reserves required by subsections (a) through (d) of this section to cover the company’s liabilities with respect to all losses, claims, and loss adjustment expenses.
(f) Each title insurer subject to the provisions of this Article shall file with its annual statement required by G.S. 58-2-165 and G.S. 58-26-10 a certification of a member in good standing of the American Academy of Actuaries. The actuarial certification required of a title insurer must conform to the annual statement instructions for title insurers of the National Association of Insurance Commissioners. (1969, c. 897; 1973, c. 1035, ss. 2-4; 1999-383, s. 1; 2002-187, ss. 7.4, 7.5, 7.6.)