KRS 304.6-090: Mortgage guaranty insurer to maintain statutory contingency reserve --

Release.

For the protection of the policyholders against loss during periods of extreme economic

contraction, each mortgage guaranty insurer shall maintain a liability referred t o as a

statutory contingency reserve. The statutory contingency reserve shall be a separate fund,

in addition to the mortgage guaranty insurer's unearned premium reserve. The insurer

shall annually contribute fifty percent (50%) of the earned premiums from mortgage

guaranty insurance contracts to this liability, which shall be maintained for ten (10) years

regardless of the coverage period for which premiums were paid. Subject to the approval

of the commissioner, the contingency reserve may be released in any year in which actual

incurred losses exceed thirty -five percent (35%) of the corresponding earned premiums.

Any reductions shall be made on a first -in, first-out basis. Changes in the reserve shall be

recorded directly to unassigned funds.