Michigan Administrative Code
Department - Insurance and Financial Services
Insurance
Property And Casualty Insurance Company Reserves
Section R. 500.1233 - Mortgage and land contract guaranty insurers; contingency loss reserves

Universal Citation: MI Admin Code R. 500.1233

Current through Vol. 24-04, March 15, 2024

Rule 3.

(1) Mortgage and land contract guaranty insurers shall establish and maintain a contingency loss reserve for the purpose of protecting insureds against the effect of adverse economic cycles and to permit mortgage guaranty insurers to comply with section 832(e) of the internal revenue code of 1954, as amended.

(2) The annual contribution to the contingency reserve shall be 50% of the earned premium reported in the fire and casualty annual statement.

(3) The contingency reserve shall be maintained for 120 months. That portion of the contingency reserve established and maintained for more than 120 months shall be released and shall no longer constitute part of the contingency reserve.

(4) The total contingency reserve shall be reported as a liability in the financial statement. The change in contingency reserve for the year shall be reported in the financial statement as a deduction from underwriting income. Appropriate entries shall be made in the underwriting and investment exhibit--statement of income of the financial statement of the insurer.

Disclaimer: These regulations may not be the most recent version. Michigan may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.