Arizona Revised Statutes Title 20. Insurance § 20-1572. Reserve for unpaid losses and loss expense

A. Each title insurer shall at all times establish and maintain, in addition to other reserves, a reserve against unpaid losses, and against loss expense, and shall calculate the reserves by making a careful estimate in each case of the loss and loss expense likely to be incurred, by reason of every claim presented, pursuant to notice from or on behalf of the insured, of a title defect in or lien or adverse claim against the title insured, that may result in a loss or cause expense to be incurred for the proper disposition of the claim. The sums of the items estimated pursuant to this section shall be the total amounts of the reserves against unpaid losses and loss expenses of the title insurer.

B. In combination with the reserves prescribed in § 20-1569 and subsection A of this section, each title insurer shall establish a supplemental reserve that consists of all other reserves that are necessary to cover the insurer's liabilities for all losses, claims and loss adjustment expenses.

C. The amounts estimated pursuant to this section may be revised from time to time as circumstances warrant, but shall be redetermined at least once each year.

D. The amounts set aside in the reserves in any year shall be deducted in determining the net profits of any title insurer for that year.