§ 6903. Contingency, loss and unearned premium reserves. (a)\nContingency reserves. (1) A corporation shall establish and maintain\ncontingency reserves for the protection of insureds and claimants\nagainst the effects of excessive losses occurring during adverse\neconomic cycles.\n (2) With respect to all financial guaranties written prior to and in\nforce as of the first day of the next calendar quarter commencing after\nthe date that the act enacting this article shall become law:\n (A) the insurer shall establish and maintain a contingency reserve\nconsistent with the requirements applicable for municipal bond\nguaranties in effect prior to the effective date of this article equal\nto fifty percent of earned premiums on such policies; and\n (B) to the extent that the insurer's contingency reserves maintained\nas of the first day of the next calendar quarter commencing after the\ndate that the act enacting this article shall become law are less than\nthose required for municipal bond guaranties, the insurer shall have\nthree years from such date to bring its contingency reserves into\ncompliance.\n (3) With respect to financial guaranties of municipal obligation\nbonds, special revenue bonds, industrial development bonds and utility\nfirst mortgage obligations written on and after the first day of the\nnext calendar quarter commencing after the date that the act enacting\nthis article shall become law:\n (A) the insurer shall establish and maintain a contingency reserve for\nall such insured issues in each calendar year for each category listed\nin subparagraph (B) of this paragraph;\n (B) the total contingency reserve required shall be the greater of\nfifty percent of premiums written for each such category or the\nfollowing amount prescribed for each such category:\n (i) municipal obligation bonds, 0.55 percent of principal guarantied;\n (ii) special revenue bonds, and obligations demonstrated to the\nsatisfaction of the superintendent to be the functional equivalent\nthereof, 0.85 percent of principal guarantied;\n (iii) investment grade industrial development bonds, secured by\ncollateral or having a term of seven years or less, and utility first\nmortgage obligations, 1.0 percent of principal guarantied;\n (iv) other investment grade industrial development bonds, 1.5 percent\nof principal guarantied; and\n (v) all other industrial development bonds, 2.5 percent of principal\nguarantied; and\n (C) Contributions to the contingency reserve required by this\nparagraph, equal to one-eightieth of the total reserve required, shall\nbe made each quarter for twenty years, provided, however, that\ncontributions may be discontinued so long as the total reserve for all\ncategories listed in items (i) through (v) of subparagraph (B) of this\nparagraph exceeds the percentages contained in such items (i) through\n(v) when applied against unpaid principal.\n (4) With respect to all other financial guaranties written on or after\nthe first day of the next calendar quarter commencing after the date\nthat the act enacting this article shall become law:\n (A) the insurer shall establish and maintain a contingency reserve for\nall such insured issues in each calendar year for each such category\nlisted in subparagraph (B) of this paragraph;\n (B) the total contingency reserve required shall be the greater of\nfifty percent of premiums written for each such category or the\nfollowing amount prescribed for each such category:\n (i) investment grade obligations, secured by collateral or having a\nterm of seven years or less, 1.0 percent of principal guarantied;\n (ii) other investment grade obligations, 1.5 percent of principal\nguarantied;\n (iii) non-investment grade consumer debt obligations, 2.0 percent of\nprincipal guarantied;\n (iv) non-investment grade asset-backed securities, 2.0 percent of\nprincipal guarantied;\n (v) other non-investment grade obligations, 2.5 percent of principal\nguarantied; and\n (C) Contrib
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