CHAPTER 491. GENERAL REINSURANCE REQUIREMENTS - Texas Statutes

INSURANCE CODE

TITLE 4. REGULATION OF SOLVENCY

SUBTITLE F. REINSURANCE

CHAPTER 491. GENERAL REINSURANCE REQUIREMENTS

SUBCHAPTER A. REINSURANCE

Sec. 491.001. INAPPLICABILITY OF SUBCHAPTER. This subchapter

does not apply to:

(1) life insurance;

(2) health insurance;

(3) annuity contracts;

(4) title insurance;

(5) workers' compensation insurance;

(6) employers' liability insurance coverage; or

(7) any policy or kind of coverage for which the maximum

possible loss to the insurer is not readily ascertainable on the

policy's issuance.

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

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

Sec. 491.002. REINSURANCE PERMITTED. An insurer or reinsurer

authorized to engage in the business of insurance or reinsurance

in this state may reinsure all or part of a single risk in

another solvent insurer.

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

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

Sec. 491.003. RISK LIMITATION FOR DOMESTIC OR FOREIGN INSURER.

An insurer incorporated under the laws of this state, another

state, or the United States and authorized to engage in business

in this state may not expose itself to a loss or hazard on a

single risk in an amount that exceeds 10 percent of the insurer's

surplus for policyholders unless the insurer reinsures the excess

in another solvent insurer.

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

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

Sec. 491.004. RISK LIMITATION FOR ALIEN INSURER. An insurer

incorporated under the laws of a jurisdiction other than this

state, another state, or the United States and authorized to

engage in business in this state may not, unless the insurer

reinsures the excess in another solvent insurer, expose itself to

a loss or hazard on a single risk in an amount that exceeds the

sum of:

(1) 10 percent of the insurer's deposit with the statutory

officer in the state through which the insurer is authorized to

engage in business in the United States; and

(2) 10 percent of the other surplus for policyholders of the

insurer's United States branch.

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

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

Sec. 491.005. COMPLIANCE WITH OTHER LAW. Reinsurance that is

required or permitted by this subchapter must comply with Chapter

493.

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

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

SUBCHAPTER B. COMPUTATION OF REINSURANCE RESERVE

Sec. 491.051. COMPUTATION OF RESERVE FOR INSURER WITH NO BASIS

PRESCRIBED BY LAW. For an insurer engaged in the business of a

kind of insurance in this state, for which no basis is prescribed

by law, the department shall compute the reinsurance reserve on

the basis prescribed by Section 862.102 for an insurer writing

fire insurance.

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

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

Sec. 491.052. COMPUTATION OF REINSURANCE RESERVES FOR CERTAIN

INSURERS. (a) On December 31 of each year, or as soon as

practicable after that date, the department shall, in accordance

with Section 491.051, compute the reinsurance reserve for all

unexpired risks of each insurer organized under the laws of this

state or engaged in the business of insurance in this state.

(b) This section does not apply to:

(1) life insurance;

(2) fire insurance;

(3) marine insurance;

(4) inland marine insurance;

(5) lightning insurance; or

(6) tornado insurance.

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

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