New Texas Reinsurance Rules for Reciprocal Insurers Take Effect

Locke Lord LLP
Contact

The Texas Department of Insurance (“TDI”) adopted new administrative rules for reciprocal reinsurers that took effect on January 1, 2022. According to TDI, the goal of the new reinsurance regulations is to “ensure TDI retains its authority to regulate credit for reinsurance matters associated with covered agreements, align TDI’s rules with the current approach to regulate reserve financing arrangements for certain life insurance policies, and align TDI’s rules with updates to the National Association of Insurance Commissioners’ (NAIC) accreditation requirements.”  See ‎TDI Commissioner’s Order 2021-7060 (Nov. 8, 2021).‎ The new rules can be found in Sections 7.614 – 7.16 of Title 28 of the Texas Administrative Code.

The new rules add an additional option for Texas domestic insurers to receive credit for reinsurance ceded to non-U.S. assuming reinsurers domiciled in a “reciprocal jurisdiction,” as defined by Texas Insurance Code section 493.108. The new rules also:

  • establish minimum capital and surplus, or equivalent, amounts and minimum solvency or capital ratios;
  • prescribe a form for assuming insurers to use to provide adequate assurance that they meet certain standards; and
  • require the Commissioner to prescribe and publish a list of reciprocal jurisdictions and a list of eligible assuming insurers.

In addition, Section 7.616 of the new rules establishes standards governing reserve financing arrangements for certain life insurance policies.

A copy of TDI’s order adopting the new rules can be found here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Locke Lord LLP | Attorney Advertising

Written by:

Locke Lord LLP
Contact
more
less

Locke Lord LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.