17:46B-7. Financial requirement

Financial requirement.

a. Every title insurance company shall have a minimum capital, which shall be paid in and maintained, of not less than $500,000.00 and, in addition, paid-in surplus of at least $250,000.00.

b. Every title insurance company shall, prior to the issuance of any policy of title insurance in this State, have on deposit with the Commissioner of Insurance of the state of its domicile or in segregated funds if permitted by the company's state of domicile the sum of $100,000.00 as a fund for the security and protection of its policyholders wherever situated, or beneficiaries under such policies. The amount of such deposit shall be increased by the sum of $50,000.00 for each state or territorial subdivision of the United States, other than the state of its domicile, in which it shall be or become qualified to engage in the business of title insurance, less the amount required by and deposited in such other states or territorial subdivisions. When the aggregate of amounts so deposited in this or such other states or territorial subdivisions has reached the sum of $250,000.00 no further deposit shall be required of such title insurance company as a condition of its qualification to engage in the business of title insurance in this State.

In the event any company is unable to make the deposits herein required in the state of its domicile by reason of a lack of statutory authority for such deposits, then such deposits may be made with the commissioner of this State.

c. The deposit required to be made by subsection b. of this section may be made in lawful money of the United States or in the classes of securities authorized by the provisions of R.S.17:20-1.

d. Assets deposited pursuant to subsection b. of this section may, with the approval of the commissioner, be exchanged from time to time for other assets of like value.

e. As long as the capital of the depositing title insurance company remains unimpaired, it shall receive the income, interest and dividends on any assets deposited.

f. Any title insurance company which has deposited assets pursuant to subsection b. of this section may, with the approval of the commissioner, withdraw any part of the assets so deposited; provided, however, that should said title insurance company continue to engage in the business of title insurance, it shall not be permitted to withdraw assets that would reduce the amount of its deposit below the amount required by subsection b. of this section.

g. Deposits made pursuant to subsection b. of this section shall be used solely for the security and protection of the insureds under the policies and contracts of insurance issued or reinsurance assumed by such title insurance company. In the event of insolvency or dissolution of such title insurance company, such deposits shall continue to be retained by the commissioner until such time as all outstanding liabilities created by such policies, contracts, or reinsurance agreements have been discharged by reinsurance or otherwise. Such deposits, or so much thereof as shall be necessary, may be used by or with the written approval of the commissioner in the payment of claims arising under such policies, contracts or reinsurance agreements or to purchase reinsurance thereof. Any amounts then remaining with the commissioner shall be applied first to the payment of other obligations of such title insurance company, and second shall be distributed to the stockholders of such title insurance company. The actions of the commissioner shall be subject to judicial review as provided in section 58 of P.L.1975, c.106 (C.17:46B-58).

h. If, with respect to any title insurance company as defined in subsection c. of section 1 of P.L.1975, c.106 (C.17:46B-1), this section 7 requires a greater amount of capital or surplus or deposit than required of such title insurance company immediately prior to the effective date of this act, such title insurance company shall have the period ending July 1, five years after the effective date of this act within which to comply with any such increase requirement.

L.1975, c.106, s.7; amended 1989,c.264,s.10.