31.05.10.02

.02 Contingency Reserve Requirements.

A. In General.

(1) In addition to the unearned premium reserve and the liability established for unpaid losses and loss adjustment expenses, a financial guaranty insurer shall maintain a contingency reserve.

(2) The purpose of the contingency reserve is to protect policyholders against loss during periods of extreme economic contraction.

B. Amount of Contingency Reserve. The contingency reserve shall be computed in accordance with COMAR 31.04.01.04.