CHAPTER 421. RESERVES IN GENERAL - Texas Statutes

INSURANCE CODE

TITLE 4. REGULATION OF SOLVENCY

SUBTITLE B. RESERVES AND INVESTMENTS

CHAPTER 421. RESERVES IN GENERAL

Sec. 421.001. RESERVES REQUIRED. (a) An insurer shall maintain

reserves in an amount estimated in the aggregate to provide for

the payment of all losses or claims for which the insurer may be

liable and that are:

(1) incurred on or before the date of statement, whether

reported or unreported; and

(2) unpaid as of the date of statement.

(b) In addition to the reserves required by Subsection (a), an

insurer shall maintain reserves in an amount estimated to provide

for the expenses of adjustment or settlement of the losses or

claims described by that subsection.

(c) The commissioner shall adopt each current formula

recommended by the National Association of Insurance

Commissioners for establishing reserves for each line of

insurance. Each insurer writing a line of insurance to which a

formula adopted under this subsection applies shall establish

reserves in compliance with that formula.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.

Sec. 421.002. CERTIFICATES FROM OTHER STATES. In computing the

reserve liability of an insurer, the commissioner may accept the

certificate of the officer of another state charged with the duty

of supervising the insurer if:

(1) the insurer is organized under the laws of the other state;

and

(2) the certificate shows that the reserve liability has been

computed in accordance with Section 421.001.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 1, eff. April 1, 2007.