§431:20-108 - Guarantee fund.
§431:20-108 Guarantee fund. (a) A title insurer, before issuing any title insurance policy covering property located in this State, shall deposit $400,000 with the commissioner, which deposit shall be known as a guarantee fund and shall be held for the security and protection of the holders or beneficiaries under its title insurance policies.
(b) The deposit required under subsection (a) may be made in lawful money of the United States or in the securities authorized for investment by domestic incorporated insurers under article 6 of this code.
(c) Assets deposited pursuant to subsection (a), with the commissioner's approval, may be exchanged from time to time for other assets that qualify under subsection (b).
(d) The depositing title insurer shall receive the income, interests, and dividends on any assets deposited.
(e) A title insurer that has deposited assets pursuant to this section, with the approval of the commissioner, may withdraw any part of the assets so deposited. If a title insurer continues to engage in the business of title insurance, it shall not be permitted to withdraw assets that would reduce the amount of its deposits below the amount required by subsection (a).
(f) In the event of the insolvency or dissolution of a title insurer, the deposit made pursuant to this section shall be retained by the commissioner until the time all outstanding liabilities created by the title insurance policies issued or reinsurance assumed by the title insurer have been discharged by reinsurance or otherwise. As much of the deposit as shall be necessary may be used by or with the written approval of the commissioner in the payment of claims arising under the title insurance policies or reinsurance assumed or to purchase reinsurance thereon. Any amounts then remaining shall be applied first to the payment of other obligations of the title insurer, and second, shall be distributed to the stockholders of the title insurer.
(g) In lieu of a deposit maintained in this State, the commissioner shall accept the certificate in proper form of the public officer having general supervision of insurers in any other state to the effect that a deposit, in a like amount, by the insurer is being maintained for like purposes in public custody or control pursuant to the laws of that state. [L 1987, c 347, pt of §2 as superseded by c 348, §22]