11 N.C. Admin. Code 18 .0117 - PREMIUM RESERVES
(a) Unearned
premium reserves are required for all MEWAs with respect to the period of
coverage for which premiums, other than premiums paid in advance, have been
paid beyond the date of valuation.
(b) If premiums due and unpaid are carried as
an asset, such premiums must be treated as premiums in force, subject to
unearned premium reserve determination. The value of the unpaid commissions and
the cost of collection associated with due and unpaid premiums must be carried
as an offsetting liability.
(c) The
minimum unearned premium reserve with respect to any contract is the pro rata
gross unearned modal premium that applies to the premium period beyond the
valuation date.
(d) MEWAs may
employ suitable approximations or estimates, including groupings, averages, and
aggregate estimation, in computing premium reserves. Such approximations or
estimates shall be tested periodically to determine their continuing adequacy
and reliability.
Notes
Eff. July 1, 1992;
Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. December 16, 2014.
Eff. July 1, 1992.
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