17:46B-17. Use of the statutory premium reserve on liquidation, dissolution or insolvency
291 words·~1 min read·
/nj/title-17/chapter-46b/17-46b-17·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
a. If a title insurance company becomes insolvent, or is in the process of liquidation or dissolution, or in the possession of the commissioner:
(1)Such amount of the assets of such title insurance company equal to the statutory premium reserve then remaining as is necessary may be used by or with the written approval of the commissioner, to pay for reinsurance of the liability of such title insurance company upon all outstanding policies or contracts or reinsurance agreements of title insurance, as to which claims for losses by the holders are not then pending, the balance, if any, of assets equal to the statutory premium reserve fund then remaining, then to be transferred to the general assets of the title insurance company;
(2)The assets other than the statutory premium reserve shall be available to pay claims for losses sustained by holders of policies then pending or arising up to the time reinsurance is effected. In the event that claims for losses are in excess of such other assets of the title insurance company, such claims, when established, shall be paid pro rata out of the surplus assets attributable to the statutory premium reserve, to the extent of such surplus, if any.
b. In the event that reinsurance is not obtained, the statutory premium reserve and assets constituting minimum capital, or so much as remains thereof after outstanding claims have been paid, shall constitute a trust fund to be held by the commissioner for 20 years, out of which claims of policyholders shall be paid as they arise. The balance, if any, of such fund shall, at expiration of 20 years, revert to the general assets of the title insurance company.
L.1975, c. 106, s. 17, eff. May 29, 1975.