New Mexico Statutes 59A-8-12. Mortgage guaranty contingency reserve
A. Casualty or surety insurers insuring real property mortgage or deed of trust lenders against loss by nonpayment of the indebtedness shall maintain a contingency reserve for protection of policyholders against the effects of adverse economic cycles.
Terms Used In New Mexico Statutes 59A-8-12
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
B. The insurer shall contribute to such contingency reserve fifty percent of net premiums (gross premiums less premiums returned to policyholders) written on such insurance remaining after establishment of the unearned premium reserve.
C. Subject to the superintendent’s approval, the contingency reserve shall be available for payment of losses only when the insurer’s incurred losses in any one (1) calendar year exceed the rate formula expected losses by ten percent of the related earned premiums.