Insurance Code section 12381

Every domestic title insurer shall, in addition to other reserves, establish and maintain a reserve to be known as the “unearned premium reserve” for title insurance, which shall, at all times for all purposes, be deemed and shall constitute the unearned portion of premiums due or received on all of its business wherever transacted and shall be charged as a reserve liability of such title insurer in determining its financial condition. The unearned premium reserve shall be retained and held by such title insurer for the protection of the policyholders’ interest in policies which have not expired. Except as provided in Section 12385, assets equal to the amount of such reserve shall not be subject to distribution among depositors or other creditors or stockholders of such title insurer until all claims of holders of policies and contracts of title insurance of such title insurer have been paid in full and all liability on the policies or other contracts of title insurance, whether contingent or actual, has been discharged or lawfully reinsured. Income from the investment of all or any part of such reserve shall be the unrestricted property of the title insurer.
Every admitted foreign insurer shall maintain a like reserve under like conditions in respect to its California business.

Source: Section 12381, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=INS§ionNum=12381.­ (updated Jan. 1, 1965; accessed Jun. 16, 2025).

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§ 12381’s source at ca​.gov