Nevada Revised Statutes 681B.100 – Contingency reserves for insurance of repayment of debt secured by mortgage
1. Casualty or surety insurers insuring real property mortgage lenders against loss by reason of nonpayment of the mortgage indebtedness by the borrower shall maintain a contingency reserve for the protection of policyholders against the effects of adverse economic cycles.
Terms Used In Nevada Revised Statutes 681B.100
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- mortgage: includes a deed of trust. See Nevada Revised Statutes 0.037
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
2. The insurer shall contribute to such contingency reserve 50 percent of net premiums (gross premiums less premiums returned to policyholders) written on such insurance remaining after establishment of the unearned premium reserve.
3. Subject to the Commissioner’s approval, the contingency reserve shall be available for payment of losses only when the insurer’s incurred losses in any 1 calendar year exceed the rate formula expected losses by 10 percent of the related earned premiums.