District Of Columbia § 31-1373.02 - Reserve requirements.
Full text of District Of Columbia D.C. Code § 31-1373.02 — Reserve requirements., with citation guidance and answers to common questions.
§ 31-1373.02. Reserve requirements.
31-1373.02Subject to all other limitations and requirements of this chapter, a fire, casualty, and marine insurer shall maintain an amount at least equal to 100% of adjusted loss reserves and loss adjustment expense reserves, 100% of adjusted unearned premium reserves, and 100% of statutorily required policy and contract reserves in:
Cash and cash equivalents;
High and medium grade investments that qualify under or ;
Equity interests that qualify under and that are traded on a qualified exchange;
Investments of the type set forth in if the investments are rated in the highest generic rating category by a nationally recognized statistical rating organization recognized by the SVO for rating foreign jurisdictions and if any foreign currency exposure is effectively hedged through the maturity date of the investments;
Qualifying investments of the type set forth in subparagraphs (B), (C), or (D) of this paragraph that are acquired under ;
Interest and dividends receivable on qualifying investments of the type set forth in subparagraphs (A) through (E) of this paragraph; or
Reinsurance recoverable on paid losses.
For purposes of determining the amount of assets to be maintained under this subsection, the calculation of adjusted loss reserves, loss adjustment expense reserves, adjusted unearned premium reserves, and statutorily required policy and contract reserves shall be based on the amounts reported to the Commissioner on its most recent annual or quarterly statement.
Adjusted loss reserves and loss adjustment expense reserves shall be calculated as follows:
The losses and loss adjustment expenses reported by the insurer as unpaid for each accident year for each individual line of business (“unpaid losses”); multiplied by
The discount factor that is applicable to the line of business and accident year published by the Internal Revenue Service under 26 U.S.C. § 846, for the calendar year that corresponds to the most recent annual statement of the insurer; less
Accrued retrospective premiums discounted by an average discount factor, which shall be calculated by dividing the unpaid losses, discounted (as provided under sub-sub-subparagraph (II) of this sub-subparagraph), by the unpaid losses.
For purposes of these calculations, the unpaid losses shall be net of anticipated salvage and subrogation and gross of any discount for the time value of money or tabular discount.
Adjusted unearned premium reserves shall be equal to:
The amount reported by the insurer as unearned premium reserves; less
The admitted asset amounts reported by the insurer as:
Premiums, and agents’ balances, in the course of collection, accident and health premiums due and unpaid, and uncollected premiums for accident and health premiums;
Premiums, agents’ balances, and installments booked but deferred and not yet due; and
Bills receivable taken for premium.
Statutorily required policy and contract reserves shall include the amounts required by .
A fire, casualty, and marine insurer shall supplement its annual statement with a reconciliation and summary of its assets and reserve requirements as required under subsection (a) of this section. A reconciliation and summary showing that an insurer’s assets as required under subsection (a) of this section are at least equal to its undiscounted reserves required under subsection (a) of this section shall be sufficient to satisfy this requirement. Upon prior notification, the Commissioner may require an insurer to submit the reconciliation and summary with any quarterly statement filed during the calendar year.
If a fire, casualty, and marine insurer’s assets and reserves is not in compliance with subsection (a) of this section, the insurer shall notify the Commissioner immediately of the amount by which the reserve requirements exceed the annual statement value of the qualifying assets, explain why the deficiency exists, and, within 30 days of the date of the notice, propose a plan of action to remedy the deficiency.
If the Commissioner determines that an insurer is not in compliance with subsection (a) of this section, the Commissioner shall require the insurer to eliminate the condition causing the noncompliance within a specified time from the date that the notice of the Commissioner’s requirement is mailed or delivered to the insurer.
If an insurer fails to comply with the Commissioner’s requirement under paragraph (1) of this subsection, the insurer shall be deemed to be in hazardous financial condition and the Commissioner shall take one or more of the actions authorized by law as to insurers in hazardous financial condition.
Annotations
Source: official District Of Columbia text · Last verified 2026-08-27
Frequently Asked Questions About District Of Columbia § 31-1373.02
What does D.C. Code § 31-1373.02 cover?
Section 31-1373.02 ("Reserve requirements.") is part of the D.C. Code, the codified statutory law of District Of Columbia. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite District Of Columbia § 31-1373.02?
A common citation format is "D.C. Code § 31-1373.02" (District Of Columbia). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of District Of Columbia law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the District Of Columbia official source linked on this page or consult a licensed District Of Columbia attorney.
How does District Of Columbia § 31-1373.02 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in District Of Columbia can advise on how this section applies to you. Contact your state or local bar association for a referral.
Sources & Verification
Not legal advice. Verify against the official source and consult a licensed attorney in District Of Columbia.