The policy liability of any company or association, transacting business under the provisions of this chapter, and the amount such company or association shall hold as a reserve for unearned premiums, shall be computed in the following manner:
1. On all policies written or renewed prior to January 1, 1922, there shall be held as such unearned premium reserve an amount equal to forty percent of the aggregate gross premiums written in all policies in force, less deductions for reinsurance as provided for in section 515.49.
2. On all policies written or renewed on and after January 1, 1922, and running one year or less from date of policy or last renewal thereof, shall be held as such unearned premium reserve an amount equal to fifty percent of the aggregate gross premiums written in all policies in force, less deductions for reinsurance as provided for in section 515.49.
3. On all policies written or renewed on and after January 1, 1922, and running for more than one year, and not exceeding five years, from date of policy or last renewal thereof there shall be held as such unearned premium reserve an amount of the aggregate gross premiums written in all policies in force, less deductions for reinsurance as provided for in section 515.49, computed in accordance with the following table:
Term for Which Reserve for
Policy Was Written Unearned Premium
Two years 1st year 3-4 2nd year 1-4
Three years 1st year 5-6 2nd year 1-2 3rd year 1-6
Four years 1st year 7-8 2nd year 5-8 3rd year 3-8 4th year 1-8
Five years 1st year 9-10 2nd year 7-10 3rd year 1-2 4th year 3-10 5th year 1-10
4. On all policies written or renewed on and after January 1, 1922, and running for more than five years from date of policy or last renewal thereof, there shall be held as such unearned premium reserve an amount of the aggregate gross premiums, less deductions for reinsurance as provided in section 515.49 equal to the pro rata unearned premium on all policies in force. The term "pro rata" used herein shall be such proportion of the gross premiums on policies in force as the number of months unexpired bears to the total number of months for which the policy was written.
5. On all policies written or renewed and for which any premium has been received which would continue a policy in force for a period beyond the term for which it was written, or term covered by last renewal thereof, there shall be held as such unearned premium reserve an amount equal to one hundred percent of such premium on all policies in force.
6. Mutual companies or associations, organized, or doing business under this chapter, shall hold as a reserve for unearned premiums an amount equal to at least forty percent of the aggregate gross premiums written in all policies in force less deductions for reinsurance as provided for in section 515.49.
[C73, § 1136; C97, § 1702; C24, 27, 31, 35, 39, § 8939; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, § 515.47]
Referred to in § 515.45, 515.71, 515C.3
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