Unearned premium reserve

1. Each domestic title insurer shall establish and maintain an unearned premium reserve composed of the unearned portions of premiums due or received, which shall be charged as a reserve liability of the insurer in determining its financial condition. 2. The unearned premium reserve shall be retained and held by the title insurer for the protection of holders of policies which have not expired. Except as provided in this section, assets equal in value to the unearned premium reserve are not subject to distribution among depositors or other creditors or stockholders of the insurer until all claims of policyholders or holders of other title insurance contracts have been paid in full, and all liability on the policies or other title insurance has been paid in full and discharged or lawfully reinsured. 3. Income from the unearned premium reserve need not be added to that reserve. 4. Each title insurer shall place in its unearned premium reserve: (a) The amount held in unearned premium reserve on July 1, 1977; and (b) A sum equal to 5 percent of title insurance premiums collected in each calendar year. 5. A title insurer shall release from the unearned premium reserve and restore to net profits a sum equal to 5 percent of the amount added to the reserve during a calendar year on July 1 of the year following the year in which the sum was added, and an additional 5 percent shall be released from the reserve on each succeeding July 1 until the entire amount for that year has been restored to net profits.