§ 58-3-71. Unearned premium reserves.
§58‑3‑71. Unearned premium reserves.
(a) Every insurancecompany, other than a life or real estate title insurance company, shallmaintain reserves equal to the unearned portions of the gross premiums chargedon unexpired or unterminated risks and policies.
(b) No deductions maybe made from the gross premiums in force except for original premiums canceledon risks terminated or reduced before expiration, or except for premiums paidor credited for risks reinsured with other solvent assuming insurers authorizedto transact business in this State.
(c) Premiums chargedfor bulk or portfolio reinsurance assumed from other insurers shall be includedas premiums in force on the basis of the original premiums and original termsof the policies of the ceding insurer.
(d) Reinsurance cededto an authorized assuming insurer may be deducted on the basis of originalpremiums and original terms, except in the case of excess loss or catastrophereinsurance, which may be deducted only on the basis of actual reinsurance premiumsand actual reinsurance terms.
(e) The reserve forunearned premiums shall be computed on an actual basis or may be computed onthe monthly pro rata fractional basis if in the opinion of the Commissionerthis method produces an adequate reserve.
(f) With respect tomarine insurance, premiums on trip risks not terminated shall be deemedunearned; and the Commissioner may require a reserve to be carried thereonequal to one hundred percent (100%) of the premiums on trip risks writtenduring the month ended as of the statement date.
(g) The Commissionermay adopt rules for the unearned premium reserve computation for premiumscovering indefinite terms. (1993, c. 452, s. 1.)