Illinois § 11

§ 11.

Statutory premium reserve. (a) A domestic title insurance company shall establish and maintain a statutory premium reserve computed in accordance with this Section. The reserve shall be reported as a liability of the title insurance company in its financial statements. The statutory premium reserve shall be maintained by the title insurance company for the protection of holders of title insurance policies. Except as provided in this Section, assets equal in value to the statutory premium reserve are not subject to distribution among creditors or stockholders of the title insurance company until all claims of policyholders or claims under reinsurance contracts have been paid in full and discharged, lawfully reinsured, or otherwise assumed by another title insurance company authorized to do business under this Act. (b) A foreign or alien title insurance company authorized to do business under this Act shall maintain at least the same reserves on title insurance policies issued on properties located in this State as are required of domestic title insurance companies. (c) The statutory premium reserve shall consist of: (1) the amount of the statutory premium reserve on January 1, 1990; and (2) a sum equal to 12 1/2 cents for each $1,000 of net retained liability under each title insurance policy on a single risk written on properties located in this State after January 1, 1990. (d) Amounts placed in the statutory premium reserve in any year in accordance with this Section shall be deducted in determining the net profit of the title insurance company for that year. (e) A title insurance company shall release from the statutory premium reserve a sum equal to 10% of the amount added to the reserve during a calendar year on July 1 of each of the 5 years following the year in which the sum was added, and shall release from the statutory premium reserve a sum equal to 3 1/3% of the amount added to the reserve during that year on each succeeding July 1 until the entire amount for that year has been released. The amount of the statutory premium reserve or similar premium reserve maintained before January 1, 1990, shall be released in accordance with the law in effect before January 1, 1990. (f) This reserve is independent of the deposit requirements of Section 4 of this Act. (Source: P.A. 94-893, eff. 6-20-06.)