(a) The amount of cash reserves recommended under § 846.153(c)(2) may not be less than the greater of:
(1) 20 percent of the total contributions in the preceding plan year; or
(2) 20 percent of the total estimated contributions for the current plan year.
(b) Cash reserves required by this section must be:
(1) computed with proper actuarial regard for:
(A) known claims, paid and outstanding;
(B) a history of incurred but not reported claims;
(C) claims handling expenses;
(D) unearned premium;
(E) an estimate for bad debts;
(F) a trend factor; and
(G) a margin for error; and
(2) maintained in cash or federally guaranteed obligations of less than five-year maturity that have a fixed or recoverable principal amount or in other investments as the commissioner may authorize by rule.