(b) If a policy of mortgage guaranty insurance insures individual loans with a percentage claim settlement option on such loans, the insurer shall maintain a policyholders surplus based on each one hundred dollars ($100) of the face amount of the mortgage, the percentage coverage or claim settlement option, and the loan-to-value category.

1. (1) If the total indebtedness is greater than 75 percent of the value of the collateral property at the date of the insurance:

   	Policyholders		Policyholders
   	Surplus per $100		Surplus per $100
   	of the Face		of the Face
   Percent	Amount of the	Percent	Amount of the
   Coverage	Mortgage	Coverage	Mortgage
   5%	$ .20	55%	$1.50
   10	.40	60	1.55
   15	.60	65	1.60
   20	.80	70	1.65
   25	1.00	75	1.75
   30	1.10	80	1.80
   35	1.20	85	1.85
   40	1.30	90	1.90
   45	1.35	95	1.95
   50	1.40	100	2.00

   If the percent coverage is between any five-point increment, then the factor for policyholders surplus per one hundred dollars ($100) of the face amount of the mortgage shall be prorated.

2. (2) If the total indebtedness is at least 50 percent and not more than 75 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 50 percent of the amount required by paragraph (1) of subdivision (b).
3. (3) If the total indebtedness is less than 50 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 25 percent of the amount required by paragraph (1) of subdivision (b).

The required amount of policyholders surplus shall be calculated in the following manner:

(c) If a policy of mortgage guaranty insurance provides coverage on a group of loans subject to an aggregate loss limit, the policyholders surplus shall be:

1. (1) If the equity is not more than 50 percent and is at least 20 percent, or equity plus prior insurance or a deductible equals 25 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be calculated as follows:

   	Policyholders		Policyholders
   	Surplus per $100		Surplus per $100
   	of the Face		of the Face
   Percent	Amount of the	Percent	Amount of the
   Coverage	Mortgage	Coverage	Mortgage
   1%	$ .30	50%	$ .825
   5	.50	60	.85
   10	.60	70	.875
   15	.65	75	.90
   20	.70	80	.925
   25	.75	90	.95
   30	.775	100	1.00
   40	.80

   If the percent coverage is between any specified increment, then the factor for policyholders surplus per one hundred dollars ($100) of the face amount of the mortgage shall be prorated.

2. (2) If the equity is less than 20 percent or the equity plus prior insurance or a deductible is less than 25 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 200 percent of the amount required by paragraph (1) of subdivision (c).
3. (3) If the equity is more than 50 percent or the equity plus prior insurance or a deductible is more than 55 percent of the value of the collateral property at the date of insurance, the required amount of policyholders surplus shall be 50 percent of the amount of policyholders surplus required by paragraph (1) of subdivision (c).

(e) If a policy of mortgage guaranty insurance provides for coverage on loans secured by second liens, the policyholders surplus shall be:

1. (1) If the policy provides coverage on individual loans, the required amount of policyholders surplus shall be calculated according to subdivision (b) after the percent of coverage and the loan-to-value ratios have been determined as follows:

   1. (A) Divide the insured portion of the second loan by the entire loan indebtedness on the collateral property to determine the percent coverage.
   2. (B) Divide the entire loan indebtedness on the property by the value of the collateral property at the date of insurance to determine loan-to-value percent.
   3. (C) The face amount of insured mortgage shall mean the entire loan indebtedness on the property.
   4. (D) Equity shall mean the complement of the loan-to-value percent.
2. (2) If the policy provides coverage on a group of loans subject to an aggregate loss limit, the policyholders surplus shall be calculated according to subdivision (c) after the percent of coverage and the loan-to-value ratios have been determined in accordance with paragraph (1).

(g)

1. (1) If a mortgage guaranty insurer will not have the amount of policyholders surplus required by this section, it shall cease transacting new business until such time that its policyholders surplus is in compliance with this section. At least 60 days prior to the time the policyholders surplus is estimated to fall below the amount required by this section, the insurer shall notify the commissioner and may request a waiver of the requirements of this subdivision. If the commissioner fails to issue an order in response to the waiver request within 60 days after the insurer requests a waiver, the insurer may continue transacting new business in California until the commissioner issues an order. The commissioner may retain consultants, including accountants, actuaries, or other experts, to assist the commissioner in the review of the information reasonably necessary to evaluate the waiver request made pursuant to this subdivision, and the insurer shall bear the commissioner’s cost of retaining those consultants. The insurer shall reimburse the commissioner for the cost of a hearing held pursuant to this subdivision unless the insurer has expressly waived the right to a hearing. Nothing in this subdivision is intended to limit the commissioner’s authority under any other provision of this code.
2. (2) An insurer who notifies the commissioner within 10 business days following the effective date of this section that its policyholders surplus is estimated to fall below the amount required by this section shall be deemed to have complied with the 60-day notice required by subdivision (1).