Okla. Stat. tit. 36, § 36-5007

A. Statutory Premium Reserve Required.

1. Each domestic title insurer doing title insurance business

under this chapter shall establish and maintain a statutory premium

reserve during the period and for the uses and purposes provided by

this article, which shall at all times and for all purposes be

deemed and shall constitute unearned portions of the original

premium, and shall be charged as a reserve liability of that insurer

in determining its financial condition.

2. The reserve required under this section shall be cumulative.

The reserve shall be established and shall consist of the amounts

required under this article.

B. Annual Additions to Reserves for Calendar Year 2014 and

Thereafter.

1. For companies with annual gross premiums of Twenty Million

Dollars ($20,000,000.00) or more, beginning with premiums received

on January 1, 2015, the statutory premium reserve shall consist of

an amount not less than five percent (5%) of the sum of the

following, as set forth in the title insurer's annual statement:

a. the direct premium written by the title insurer, and

b. premium for reinsurance assumed less premium for

reinsurance ceded during the year.

Oklahoma Statutes - Title 36. Insurance Page 1020

2. Companies with annual gross premiums of less than Twenty

Million Dollars ($20,000,000.00) may, at their election, establish

premium reserves as set forth in paragraph 1 of subsection B of this

section, or alternatively, in an amount not less than the title

insurer's reserve for incurred but not reported claims (IBNR) plus

the reserve for unallocated loss adjustment expense (ULAE). For

companies electing the latter option, the remainder of subsections B

and C of this section do not apply.

3. The statutory premium reserve calculations in subsection B

of this section are minimum amounts. A title insurance underwriter

may set aside amounts in excess of the minimum reserve requirement.

4. Additions to the statutory premium reserve set aside for

title insurance policies written or assumed under paragraph 1 of

subsection B of this section shall be reduced over a 20-year period

beginning in the year after the year in which the policies are

written or assumed, as provided by paragraph 5 of this subsection,

no faster than:

a. thirty-five percent (35%) of the additions in the

first year succeeding the year of addition,

b. fifteen percent (15%) of the additions in each of the

succeeding two years,

c. ten percent (10%) of the additions in the next

succeeding year,

d. three percent (3%) of the additions in the next three

succeeding years,

e. two percent (2%) of the additions in the next three

succeeding years, and

f. one percent (1%) of the additions in the next ten

succeeding years.

5. The annual reductions under paragraph 4 of subsection B of

this section shall be made in increments of one-fourth (1/4) of the

appropriate percentage of the additions on March 31, June 30,

September 30, and December 31 of each year.

C. Establishment of Reserves for the Periods After 2014.

1. In addition to the requirements imposed under this section,

each domestic title insurer shall compute a total statutory premium

reserve balance for all policy years combined as of December 31,

2013.

2. The balance shall be computed as if this section were in

effect during the twenty-year period ending December 31, 2013. For

purposes of this calculation, the balance of the reserve as of

December 31, 1993, is considered to be zero.

a. If the total minimum statutory premium reserve so

calculated exceeds the aggregate amount set aside for

statutory premiums in the insurer's most recent annual

statement filed with the Insurance Commissioner, the

insurer shall, out of total charges for policies of

Oklahoma Statutes - Title 36. Insurance Page 1021

title insurance, increase its statutory premium

reserve by an amount equal to one-sixth (1/6) of that

deficit in each of the succeeding six (6) years,
e aggregate amount set aside for

statutory premiums in the insurer's most recent annual

statement filed with the Insurance Commissioner, the

insurer shall, out of total charges for policies of

Oklahoma Statutes - Title 36. Insurance Page 1021

title insurance, increase its statutory premium

reserve by an amount equal to one-sixth (1/6) of that

deficit in each of the succeeding six (6) years,

beginning with calendar year 2014, until the entire

deficit has been added. These added amounts (the

excess reserve) shall be released in accordance with

paragraph 3 of this subsection.

b. If the total minimum statutory premium reserve so

calculated is less than the aggregate amount set aside

for statutory premiums in the insurer's most recent

annual statement filed with the commissioner, the

insurer shall release the excess amount previously set

aside by an amount equal to one-sixth (1/6) of that

excess in each of the succeeding six (6) years,

beginning with calendar year 2014, until the entire

excess has been released. The balance of the reserve

(equal to the calculated minimum statutory premium

reserve) shall be released in accordance with each

title insurer's previous method of amortizing its

statutory premium reserve.

3. The aggregate of the amounts set aside, if any, in excess of

the statutory premium reserve pursuant to subparagraph a of

paragraph 2 of this subsection in any calendar year as adjustments

to the insurer's statutory premium reserve shall be released from

the reserve and restored to net profits, or equity directly, over a

period not exceeding ten (10) years pursuant to the following table:

Year of addition Release

Year 1 Equally over ten (10) years

Year 2 Equally over nine (9) years

Year 3 Equally over eight (8) years

Year 4 Equally over seven (7) years

Year 5 Equally over six (6) years

Year 6 Equally over five (5) years

D. Companies Transitioning to five percent (5%) Statutory

Premium Reserve After Calendar Year 2015.

1. Companies with annual gross premiums of less than Twenty

Million Dollars ($20,000,000.00) as of January 1, 2014, which elect

to set aside reserves in an amount not less than the title insurer's

IBNR reserve plus the ULAE reserve as set forth in paragraph 2 of

subsection B of this section, may voluntarily transition to the five

percent (5%) statutory premium reserve described elsewhere in

subsection B of this section beginning in any calendar year

subsequent to 2014.

2. Companies with annual gross premiums of less than Twenty

Million Dollars ($20,000,000.00) as of January 1, 2015, which have

not voluntarily transitioned as set forth in subsection C of this

section, but which later earn annual gross premiums of Twenty

Oklahoma Statutes - Title 36. Insurance Page 1022

Million Dollars ($20,000,000.00) or more, shall transition to the

five percent (5%) statutory premium reserve standard beginning

January 1 of the year after they earn annual gross premiums of

Twenty Million Dollars ($20,000,000.00) or more.

3. Companies transitioning to the five percent (5%) statutory

premium reserve, as set forth in subsections B and C of this

section, may, but need not, establish reserves for years prior to

the transitional year in accordance with subsection C of this

section. Alternatively, such companies may continue to use the

previously established reserves for prior years until such reserves

are fully amortized. Reserves established on a go-forward basis

beginning with the year of transition, shall be amortized in

accordance with paragraphs 4 and 5 of subsection B of this section.

E. Maintenance of Fund.

The statutory premium reserve and supplemental reserve fund

shall be held in cash or invested in first mortgage notes or other

securities admissible for investment by Section 5002 this title.

F. Effect of Insolvency or Dissolution.

In the event of the insolvency or dissolution of a title
amortized in

accordance with paragraphs 4 and 5 of subsection B of this section.

E. Maintenance of Fund.

The statutory premium reserve and supplemental reserve fund

shall be held in cash or invested in first mortgage notes or other

securities admissible for investment by Section 5002 this title.

F. Effect of Insolvency or Dissolution.

In the event of the insolvency or dissolution of a title

insurer, the statutory premium reserve and supplemental reserve fund

shall be used to protect title insurance contract holders, even if

there are no accrued title insurance claims and even if there are

unpaid obligations of other types.