(c) In addition to the contingency reserve required under Section 12640.04, the case basis method shall be used to determine the loss reserve, which shall include a reserve for claims reported and unpaid and claims incurred but not reported, including:

1. (i) Estimated losses on insured loans which have resulted in the conveyance of property which remains unsold.
2. (ii) Insured loans in the process of foreclosure.
3. (iii) Insured loans in default for four or more months.