Ins 3.09(1)(1) Purpose. This section implements and interprets s. Ins 6.75 (2) (i) and (j) and ss. 601.01, 601.42, 611.19 (1), 611.24, 618.21, 620.02, 623.02, 623.03, 623.04, 623.11, 627.05 and 628.34 (12), Stats., for the purpose of establishing minimum requirements for the transaction of mortgage guaranty insurance. Ins 3.09(2)(2) Scope. This rule shall apply to the underwriting, investment, marketing, rating, accounting and reserving activities of insurers which write the type of insurance authorized by s. Ins 6.75 (2) (i) and (j). Ins 3.09(3)(a)(a) “Amount at risk” means the coverage percentage or the claim settlement option percentage multiplied by the face of amount of a mortgage or by the insured amount of a lease. Ins 3.09(3)(b)(b) “Annual statement” means the fire and casualty annual statement form specified in s. Ins 7.02, Forms 22-010 and 22-011. Ins 3.09(3)(c)(c) “Contingency reserve” means the reserve established for the protection of policyholders against the effect of losses resulting from adverse economic cycles. Ins 3.09(3)(e)(e) “Face amount” means the entire indebtedness under an insured mortgage before computing any reduction because of an insurer’s option limiting its coverage. Ins 3.09(3)(f)(f) “Loan-to-value” means the ratio of the entire indebtedness to value of the collateral property expressed as a percentage. Ins 3.09(3)(g)(g) “Mortgage guaranty account” means the portion of the Contingency Reserve which complies with 26 USC 832 (e) as amended. Ins 3.09(3)(i)2.2. Insures pursuant to s. Ins 6.75 (2) (j) against loss arising from failure of debtors to meet financial obligations to creditors under evidences of indebtedness secured by a junior lien or charge on real estate. Ins 3.09(3)(j)(j) “Mortgage guaranty insurers report of policyholders position” means the annual supplementary report required by s. Ins 7.02, Forms 22-090 and 22-091. Ins 3.09(3)(k)(k) “NAIC Ratio—Investment Yield” means net investment income earned after taxes from the annual statement divided by mean invested assets. Ins 3.09(3)(L)(L) “Person” means any individual, corporation, association, partnership or any other legal entity. Ins 3.09(3)(m)(m) “Policyholders position” includes the contingency reserve established under sub. (14), the deferred risk charge established under sub. (13) (b) and surplus as regards policyholders. “Minimum policyholders position” is calculated as described in sub. (5). Ins 3.09(3)(n)(n) “Surplus as regards policyholders” means an insurer’s net worth, the difference between its assets and liabilities, as reported in its annual statement. Ins 3.09(4)(4) Discrimination. No mortgage guaranty insurer may discriminate in the issuance or extension of mortgage guaranty insurance on the basis of the geographic location of the property or the applicant’s sex, marital status, race, color, creed or national origin. Ins 3.09(5)(a)(a) For the purpose of complying with s. 623.11, Stats., a mortgage guaranty insurer shall maintain at all times a minimum policyholders position in the amount required by this section. The policyholders position shall be net of reinsurance ceded but shall include reinsurance assumed. Ins 3.09(5)(b)(b) If a mortgage guaranty insurer does not have the minimum amount of policyholders position required by this section it shall cease transacting new business until such time that its policyholders position is in compliance with this section. Ins 3.09(5)(c)(c) If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on such loans, a mortgage guaranty insurer shall maintain a policyholders position based on: each $100 of the face amount of the mortgage; the percentage coverage; and the loan-to-value category. The minimum amount of policyholders position shall be calculated in the following manner: Ins 3.09(5)(c)1.1. If the loan-to-value is greater than 75%, the minimum policyholders position per $100 of the face amount of the mortgage for the specific percent coverage shall be as shown in the schedule below: Ins 3.09(5)(c)2.2. If the loan-to-value is at least 50% and not more than 75%, the minimum amount of the policyholders position shall be 50% of the minimum of the amount calculated under subd. 1. Ins 3.09(5)(c)3.3. If the loan-to-value is less than 50%, the minimum amount of policyholders position shall be 25% of the amount calculated under subd. 1. Ins 3.09(5)(d)(d) If a policy of mortgage guaranty insurance provides coverage on a group of loans subject to an aggregate loss limit, the policyholders position shall be: Ins 3.09(5)(d)1.1. If the equity is not more than 50% and is at least 20%, or equity plus prior insurance or a deductible is at least 25% and not more than 55%, the minimum amount of policyholders position shall be calculated as follows: