§ 58-10-130. Unearned premium reserve. - North Carolina Statutes

§ 58‑10‑130. Unearned premium reserve.

(a)        The unearnedpremium reserve shall be computed as follows:

(1)        The unearned premiumreserve for premiums paid in advance annually shall be calculated on themonthly pro rata fractional basis.

(2)        Premiums paid inadvance for 10‑year coverage shall be placed in the unearned premiumreserve and shall be released from this reserve as follows:

a.         1st month – 1/132;

b.         2nd through 12thmonth – 2/132 each month;

c.         13th month – 3/264;

d.         14th through 120thmonth – 1/132 per month;

e.         121st month – 1/264

(3)        Premiums paid inadvance for periods in excess of 10 years. During the first 10 years ofcoverage the unearned portion of the premium shall be the premium collectedminus an amount equal to the premium that would have been earned had theapplicable premium for 10 years of coverage been received. The premiumremaining after 10 years shall be released from the unearned premium reservemonthly pro rata over the remaining term of coverage.

(b)        Repealed by SessionLaws 2001‑334, s. 16.1.

(c)        The case basismethod shall be used to determine the loss reserve which shall include areserve for claims reported and unpaid and a reserve for claims incurred butnot reported. (2001‑223,s. 11; 2001‑334, s. 16.1.)