§ 58-10-125. (Effective until July 1, 2011) Policyholders position and capital and surplus requirements. - North Carolina Statutes

§ 58‑10‑125. (Effective until July 1, 2011) Policyholders position and capital and surplusrequirements.

(a)        For the purpose ofcomplying with G.S. 58‑7‑75, a mortgage guaranty insurer shallmaintain at all times a minimum policyholders position of not less than onetwenty‑fifth of the insurer's aggregate insured risk outstanding. Thepolicyholders position shall be net of reinsurance ceded but shall includereinsurance assumed.

(b)        Subject to theprovisions of subsections (i) through (l) of this section, if a mortgageguaranty insurer does not have the minimum amount of policyholders positionrequired by this section it shall cease transacting new business until the timethat its policyholders position is in compliance with this section.

(c)        A mortgage guarantyinsurer shall at all times maintain capital and surplus in the greater of theamount required by G.S. 58‑7‑75 or subsection (a) of this section,unless a waiver is obtained by the mortgage guaranty insurer pursuant tosubsection (i) of this section.

(d) through (h) Repealed bySession Laws 2007‑127, s. 5, effective July 1, 2007.

(i)         The Commissionermay waive the requirement found in subsection (a) of this section at thewritten request of a mortgage guaranty insurer upon a finding that the mortgageguaranty insurer's policyholders position is reasonable in relationship to themortgage guaranty insurer's aggregate insured risk and adequate to itsfinancial needs. The request must be made in writing at least 90 days inadvance of the date that the mortgage guaranty insurer expects to exceed therequirement of subsection (a) of this section and shall, at a minimum, addressthe factors specified in subsection (j) of this section.

(j)         In determiningwhether a mortgage guaranty insurer's policyholders position is reasonable inrelation to the mortgage guaranty insurer's aggregate insured risk and adequateto its financial needs, all of the following factors, among others, shall beconsidered:

(1)        The size of themortgage guaranty insurer as measured by its assets, capital and surplus,reserves, premium writings, insurance in force, and other appropriate criteria.

(2)        The extent to whichthe mortgage guaranty insurer's business is diversified across time, geography,credit quality, origination, and distribution channels.

(3)        The nature andextent of the mortgage guaranty insurer's reinsurance program.

(4)        The quality,diversification, and liquidity of the mortgage guaranty insurer's assets andits investment portfolio.

(5)        The historical andforecasted trend in the size of the mortgage guaranty insurer's policyholdersposition.

(6)        The policyholdersposition maintained by other comparable mortgage guaranty insurers in relationto the nature of their respective insured risks.

(7)        The adequacy of themortgage guaranty insurer's reserves.

(8)        The quality andliquidity of investments in affiliates. The Commissioner may treat any suchinvestment as a nonadmitted asset for purposes of determining the adequacy ofsurplus as regards policyholders.

(9)        The quality of the mortgageguaranty insurer's earnings and the extent to which the reported earnings ofthe mortgage guaranty insurer include extraordinary items.

(10)      An independentactuary's opinion as to the reasonableness and adequacy of the mortgageguaranty insurer's historical and projected policyholders position.

(11)      The capitalcontributions which have been infused or are available for future infusion intothe mortgage guaranty insurer.

(12)      The historical andprojected trends in the components of the mortgage guaranty insurer's aggregateinsured risk, including, but not limited to, the quality and type of the risksincluded in the aggregate insured risk.

(k)        The Commissionermay retain accountants, actuaries, or other experts to assist the Commissionerin the review of the mortgage guaranty insurer's request submitted pursuant tosubsection (i) of this section. The mortgage guaranty insurer shall bear theCommissioner's cost of retaining those persons.

(l)         Any waiver shallbe (i) for a specified period of time not to exceed two years and (ii) subjectto any terms and conditions that the Commissioner shall deem best suited torestoring the mortgage guaranty insurer's minimum policyholders positionrequired by subsection (a) of this section. Notwithstanding any other provisionin this section, the Commissioner shall not grant a waiver that would extendbeyond July 1, 2011.  (2001‑223, s. 11; 2007‑127, s. 5; 2009‑254, s. 1.)

§ 58‑10‑125. (Effective July 1, 2011) Policyholders position and capital and surplusrequirements.

(a)        For the purpose ofcomplying with G.S. 58‑7‑75, a mortgage guaranty insurer shallmaintain at all times a minimum policyholders position of not less than onetwenty‑fifth of the insurer's aggregate insured risk outstanding. Thepolicyholders position shall be net of reinsurance ceded but shall includereinsurance assumed.

(b)        If a mortgageguaranty insurer does not have the minimum amount of policyholders positionrequired by this section it shall cease transacting new business until the timethat its policyholders position is in compliance with this section.

(c)        A mortgage guarantyinsurer shall at all times maintain capital and surplus in the greater of theamount required by G.S. 58‑7‑75 or this section.

(d)        through (h)Repealed by Session Laws 2007‑127, s. 5, effective July 1, 2007.  (2001‑223, s. 11; 2007‑127,s. 5.)