Illinois Administrative Code
Title 50 - INSURANCE
Part 202 - MORTGAGE GUARANTY INSURANCE
Section 202.50 - Reserves
Current through Register Vol. 48, No. 12, March 22, 2024
A mortgage guaranty insurance company shall establish and maintain the following four reserve accounts:
a) Reserve for General Expenses - A reserve in an amount sufficient to meet general expenses, including amounts due vendors for goods, supplies, equipment and amounts due for compensation, taxes and licenses:
b) Loss Reserve - A loss reserve computed upon the case basis in a manner to accurately reflect loss frequency and loss severity which shall take into consideration, among other things, claims incurred but not yet reported, including estimated losses on;
c) Unearned Premium Reserve - A reserve for unearned premiums computed and maintained on an annual or monthly pro rata basis on all unexpired coverage, except that in the case of premiums paid in advance for coverage issued for the terms of years shown in Illustration 1, the unearned premium factors specified shall be utilized in calculating the reserved amount provided, however, that on premiums paid in advance for coverage periods in excess of 15 years, the unearned portion of the premium during the first 15 years of coverage shall be the premium collected minus an amount equal to the premium that would have been earned had the applicable premium for 15 years' coverage been received and the premium remaining after 15 years shall be released from the unearned premiums reserve pro rata over the remaining term of coverage.
d) Contingency Reserve - A reserve for contingencies to protect against the effect of adverse economic cycles affecting the housing industry and to permit compliance with Section 832(e) of the Internal Revenue Code of 1954, as amended ( 26 U.S.C. 832 e ). To which shall be contributed annually the greater