Okla. Stat. tit. 15, § 15-141.6

ratios.

A. An association licensed pursuant to the Service Warranty Act

shall maintain a funded, unearned reserve account, consisting of

unencumbered assets, equal to a minimum of twenty-five percent (25%)

of the gross written provider fees received on all warranty

contracts in force, wherever written. In the case of multiyear

contracts which are offered by associations having net assets of

less than Five Hundred Thousand Dollars ($500,000.00) for which

provider fees are collected in advance for coverage in a subsequent

year, one hundred percent (100%) of the provider fees for such

subsequent years shall be placed in the funded, unearned reserve

account. Additionally, an association establishing such reserve

account shall also place in trust with the Insurance Commissioner a

surety bond issued by an authorized surety having a value of not

less than five percent (5%) of the gross provider fee received, less

claims paid, on the sale of the service warranties for all service

warranties issued and in force in this state, but in no event shall

the bond be less than Twenty-five Thousand Dollars ($25,000.00).

B. An association shall not be required to establish an

unearned reserve or demonstrate the minimum writing ratio required

by subsection D of this section if it has purchased one or more

insurance policies that collectively cover one hundred percent

(100%) of its claim exposure is covered by such policy and that the

policy satisfies the requirements of this section. The insurance

shall be obtained from one or more insurers that are licensed,

registered, or otherwise authorized to do business in this state,

that is rated B++ or better by A.M. Best Company, Inc., and that

meets the requirements of subsection C of this section. For the

Oklahoma Statutes - Title 15. Contracts Page 40

purposes of this subsection, the insurance policy shall contain the

following provisions:

1. In the event that the service warranty association is unable

to fulfill its obligation under contracts issued in this state for

any reason including insolvency, bankruptcy, or dissolution, the

insurer will pay losses and unearned provider fees under such plans

directly to the person making a claim under the contract;

2. The insurer issuing the insurance policy shall assume full

responsibility for the administration of claims in the event of the

inability of the association to do so; and

3. The policy may not be canceled or not renewed by either the

insurer or the association unless sixty (60) days' written notice

thereof has been given to the Commissioner by the insurer before the

date of such cancellation or nonrenewal.

C. Each insurer providing the insurance policy used to satisfy

the financial responsibility requirements of subsection B of this

section must meet one of the following standards:

1. The insurer shall, at the time the policy is filed with the

Commissioner, and continuously thereafter:

a. maintain surplus as to policyholders and paid-in

capital of at least Fifteen Million Dollars

($15,000,000.00), and

b. annually file copies of the audited financial

statements of the insurer, its NAIC Annual Statement,

and the actuarial certification required by and filed

in the state of domicile of the insurer; or

2. The insurer shall, at the time the policy is filed with the

Commissioner, and continuously thereafter:

a. maintain surplus as to policyholders and paid-in

capital of less than Fifteen Million Dollars

($15,000,000.00) but at least equal to Ten Million

Dollars ($10,000,000.00),

b. demonstrate to the satisfaction of the Commissioner

that the company maintains a ratio of net written

premiums, wherever written, to surplus as to

policyholders and paid-in capital of not greater than

three to one, and

c. annually file copies of the audited financial

statements of the insurer, its NAIC Annual Statement,

and the actuarial certification required by and filed
,000,000.00),

b. demonstrate to the satisfaction of the Commissioner

that the company maintains a ratio of net written

premiums, wherever written, to surplus as to

policyholders and paid-in capital of not greater than

three to one, and

c. annually file copies of the audited financial

statements of the insurer, its NAIC Annual Statement,

and the actuarial certification required by and filed

in the state of domicile of the insurer.

D. No warrantor or warranty seller shall allow its gross

written provider fees to exceed seven to one ratio to net assets.

E. If the gross written provider fees of a warrantor or a

warranty seller exceed the required net asset ratios, the

Commissioner may require, in addition to other measures as the

Commissioner deems necessary, any one or more of the following:

Oklahoma Statutes - Title 15. Contracts Page 41

1. A complete review of financial condition;

2. An increase in deposit;

3. A suspension of any new writings; or

4. Capital infusion into the business.