SECTION 365:15-1-8. Unearned premium reserve fund

(a)   Purpose. The purpose of this section is to provide guidance for approval of corporate surety bonds or approved alternative security arrangements for return of unearned premiums.

(b)   Security requirements.

(1)   All insurance companies writing any line of insurance as defined in 36 O.S. §§703-708, shall be required to provide a corporate surety bond annually, on or before the last day of May, which surety bond shall be in an amount equal to ten percent (10%) of the direct written premium of an accumulation of all lines as defined in 36 O.S. §§703-708, written in Oklahoma during the preceding calendar year; or

(2)   An insurance company whose domiciliary state has a post- assessment property and casualty guaranty fund, may use an alternative security arrangement for the unearned premium reserve fund. Such alternative security arrangement shall comply with the following requirements:

(A)   All such deposits required for authority to transact insurance business in Oklahoma shall consist of cash, certificates of deposit issued by solvent insured banks and trust companies in Oklahoma or a combination of the foregoing and the securities described in 36 O.S. §1607, §1608 and §1620(B)

(B)   All such deposits required pursuant to the laws of another state, province, or country, or pursuant to the retaliatory provision, 36 O.S. §628, shall consist of such assets as are required or permitted by such laws, or as required pursuant to such retaliatory provision.

(c)   Penalties. Any property and casualty insurance company failing to comply with this section may be subject, after notice and hearing, to not being issued a new or renewal certificate of authority and to the penalties provided in 36 O.S. §619.