17:46B-15. Amount of statutory premium reserve; release thereof
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/nj/title-17/chapter-46b/17-46b-15·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
a. The statutory premium reserve of every domestic title insurance company shall consist of:
(1)The amount of the reserve held as of the effective date of this act, pursuant to or under permission granted by P.L.1938, c. 289, s. 6, as amended by P.L.1949, c. 180, s. 1 (C. 17:18-13); and
(2)The amount of all additions required to be made to such reserve by this section, less the withdrawals therefrom as required by this section.
b. After the effective date of this act, every domestic title insurance company shall add to its statutory premium reserve, in respect to each policy or reinsurance agreement issued by it, a sum of money out of the fees due or received for such title insurance made by it and deemed to be unearned portions of such fees, a sum equal to $1.50 for each such policy or contract or agreement, plus $0.12 1/2 for each $1,000.00 face amount of net retained liability, as defined in subparagraph k. of section 1, of this act, and shall separately record the aggregate amounts so set aside and reserved in respect to such policies, contracts or agreements written in each calendar year.
c. No such reserves shall be required for a policy or contract that insures a mortgage interest which is excepted in a simultaneously issued owner's policy or contract covering the same estate in land and which does not exceed the insured amount of such owner's policy or contract.
d. The amounts set aside initially to establish the statutory premium reserve as referred to in subparagraph a.
(1)of section 15 of this act, and additions to the statutory reserve as referred to in paragraph b. of section 15 of this act shall be deducted in determining net profits of any title insurance company.
e. For the purpose of determining the amounts of the statutory premium reserve that shall be withdrawn pursuant to paragraph f. of this section, and the interest of the policyholders therein under section 17 of this act, all policies, contracts of title insurance or reinsurance agreements of title insurance shall be considered as dated on July 1 of the year of issue.
f. The aggregate of the amounts set aside in statutory premium reserve in any calendar year pursuant to subparagraph b. of this section shall be released from said reserve and restored to net income in years of release pursuant to the following formula:
one-twentieth of such aggregate sum on July 1 of each of the years next succeeding the year of addition to the reserve for a period of 20 years until the entire sum shall have been so released and restored to net profits.
The reserve held at the effective date of this act referred to in subsection a.
(1)of this section shall also be released according to the foregoing formula.
g. If substantially the entire outstanding liability under all policies, contracts of title insurance or reinsurance agreements of any title insurance company shall be reinsured, the value of the consideration received by a reinsuring title insurance company authorized to transact the business of title insurance in this State, shall constitute, in its entirety, unearned portions of original premiums and be added to its statutory reserve and deemed, for recovery purposes, to have been provided for liabilities assumed during the year of such reinsurance.
The amount of such addition to the statutory premium reserve of such assuming title insurance company shall be equal to the statutory premium reserve required to be maintained by the ceding title insurance company at the time of such reinsurance.
L.1975, c. 106, s. 15, eff. May 29, 1975.