Arizona Laws 20-1541. Definitions
In this article, unless the context otherwise requires:
Terms Used In Arizona Laws 20-1541
- Contingency reserve: means an additional premium reserve established to protect policyholders against the effect of adverse economic cycles. See Arizona Laws 20-1541
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- department: means the department of insurance and financial institutions. See Arizona Laws 20-101
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Property: includes both real and personal property. See Arizona Laws 1-215
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
1. "Authorized real estate security" means either:
(a) Any amortized note, bond or other evidence of indebtedness that is secured by both a mortgage, deed of trust or other instrument that constitutes or is equivalent to a first lien or charge on real estate and the balance on any pledged cash account or collateralized guaranty agreement that is contracted for by a parent, blood relative, employer or nonprofit corporation for the benefit of the borrower if all of the following apply:
(i) The loan amount does not exceed one hundred three per cent of the fair market value of the combined security at the time that the loan is made where any percentage greater than one hundred per cent is used to finance fees and closing costs on the indebtedness.
(ii) The pledged cash account or collateralized guaranty agreement does not exceed thirty-five per cent of the fair market value of the real estate at the time the loan is made.
(iii) The lender has a first position lien on the pledged cash account or collateralized guaranty agreement.
(iv) The loan amount does not exceed the fair market value of the real estate at the time the loan is made plus three per cent for financing fees and closing costs.
(v) The requirements of subdivision (b) of this paragraph are met.
(b) Any amortized note, bond or other evidence of indebtedness that does not exceed one hundred three per cent of the fair market value of the real estate and that is secured by any mortgage, deed of trust or other instrument that constitutes, or is equivalent to, a first lien or charge on real estate if:
(i) The real estate loan secured in such manner is one of a type which a bank, a savings and loan association or an insurance company, which is supervised and regulated by a department of this state or an agency of the federal government, is authorized to make, or would be authorized to make, disregarding any requirement applicable to such an institution that the amount of the loan not exceed a certain percentage of the value of the real estate.
(ii) The improvement on such real estate is a building or buildings designed for occupancy as specified by paragraph 4, subdivisions (a) and (b) of this section.
(iii) The lien on such real estate may be subject to and subordinate to the lien of any public bond, assessment or tax, when no installment, call or payment of or under such bond, assessment or tax is delinquent, or to any outstanding mineral, oil, water or timber rights, rights-of-way, easements or rights-of-way of support, sewer rights, building restrictions or other restrictions or covenants, conditions or regulations of use or outstanding leases upon such real property under which rents or profits are reserved to the owner of such real property.
2. "Contingency reserve" means an additional premium reserve established to protect policyholders against the effect of adverse economic cycles.
3. "Minimum policyholder position" means the amount computed pursuant to section 20-1550.
4. "Mortgage guaranty insurance" means insurance against financial loss by reason of nonpayment of:
(a) Principal, interest or other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate if the improvement on such real estate is a residential building or a condominium unit or buildings designed for occupancy by not more than four families.
(b) Principal, interest or other sums agreed to be paid under the terms of any note, bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate if the improvement on such real estate is a building or buildings designed for occupancy by five or more families or designed to be occupied for industrial or commercial purposes.
(c) Rent or other sums agreed to be paid under the terms of a written lease for the possession, use or occupancy of real estate if the improvement on such real estate is a building or buildings designed to be occupied for industrial or commercial purposes.
5. "Policyholder position" means the contingency reserve prescribed in section 20-1556 and surplus as regards policyholders.