Bill Text: TX HB3086 | 2011-2012 | 82nd Legislature | Comm Sub
Bill Title: Relating to credit to certain ceding insurers for reinsurance ceded to certain certified assuming insurers.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2011-05-03 - Committee report sent to Calendars [HB3086 Detail]
Download: Texas-2011-HB3086-Comm_Sub.html
82R23397 RWG-F | |||
By: Smithee | H.B. No. 3086 | ||
Substitute the following for H.B. No. 3086: | |||
By: Smithee | C.S.H.B. No. 3086 |
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relating to credit to certain ceding insurers for reinsurance ceded | ||
to certain certified assuming insurers. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 492.102(a), Insurance Code, is amended | ||
to read as follows: | ||
(a) A ceding insurer may be allowed credit for reinsurance | ||
ceded, as an asset or as a deduction from liability, only if the | ||
reinsurance is ceded to an assuming insurer that: | ||
(1) is authorized to engage in the business of | ||
insurance or reinsurance in this state; | ||
(2) is accredited as a reinsurer in this state, as | ||
provided by Section 492.103; [ |
||
(3) subject to Subchapter D, maintains, in a qualified | ||
United States financial institution that has been granted the | ||
authority to operate with fiduciary powers, a trust fund to pay | ||
valid claims of: | ||
(A) the assuming insurer's United States | ||
policyholders and ceding insurers; and | ||
(B) the policyholders' and ceding insurers' | ||
assigns and successors in interest; or | ||
(4) is determined by the commissioner to meet the | ||
requirements of Section 492.1035. | ||
SECTION 2. Subchapter C, Chapter 492, Insurance Code, is | ||
amended by adding Sections 492.1035, 492.1036, and 492.1037 to read | ||
as follows: | ||
Sec. 492.1035. CREDIT FOR CERTAIN CERTIFIED REINSURERS. (a) | ||
An asset or deduction from liability shall be allowed for | ||
reinsurance ceded to an assuming insurer that the commissioner | ||
certifies as a reinsurer and that secures its obligations in | ||
accordance with the requirements of this section. | ||
(b) The commissioner may certify an assuming insurer that: | ||
(1) is domiciled and licensed to transact insurance or | ||
reinsurance in a qualified jurisdiction under Subsections (e)-(g); | ||
(2) maintains minimum capital and a surplus in an | ||
amount the commissioner determines acceptable; | ||
(3) maintains a financial strength rating from two or | ||
more rating agencies the commissioner determines are acceptable; | ||
(4) submits to this state's jurisdiction; | ||
(5) designates the commissioner as an agent for | ||
service of process in any action, suit, or proceeding instituted in | ||
this state; | ||
(6) provides security for 100 percent of the assuming | ||
insurer's liabilities for reinsurance ceded by United States ceding | ||
insurers if the assuming reinsurer resists enforcement of a valid, | ||
nonappealable United States judgment; and | ||
(7) satisfies other requirements for certification | ||
the commissioner determines relevant. | ||
(c) A ceding insurer or certified reinsurer may apply to the | ||
commissioner for a waiver from the requirement of Subsection | ||
(b)(6). The commissioner may enter an order that grants a waiver | ||
from these requirements if the commissioner determines the waiver | ||
is appropriate in the interests of ensuring market stability. | ||
(d) The commissioner may certify a group of insurers, | ||
including incorporated and individual unincorporated underwriters, | ||
as a certified reinsurer if, in addition to satisfying requirements | ||
of Subsection (a): | ||
(1) the group of insurers satisfies minimum capital | ||
and surplus requirements in an amount determined by the | ||
commissioner to provide adequate protection by placing the group | ||
and its members' capital and surplus equivalents into a joint | ||
central fund that may be applied to an unsatisfied obligation of the | ||
group or its members; | ||
(2) each incorporated member of the group of insurers | ||
is not engaged as a member of the group in business other than | ||
underwriting and is subject to the same level of regulation and | ||
solvency control by the group's domiciliary regulator as the | ||
unincorporated members; and | ||
(3) the group of insurers provides to the | ||
commissioner, not later than the 90th day after the date the group's | ||
financial statements are due to be filed with the group's | ||
domiciliary regulator, the annual certification of solvency of | ||
each underwriter member by the group's domiciliary regulator, or if | ||
a certification is unavailable, financial statements prepared by | ||
independent public accountants of each underwriter member of the | ||
group. | ||
(e) The commissioner shall publish a list of qualified | ||
jurisdictions with respect to which an assuming insurer licensed | ||
and domiciled in the jurisdiction may be considered for | ||
certification by the commissioner as a certified reinsurer. | ||
(f) To determine whether a jurisdiction of an assuming | ||
insurer located outside of the United States may be eligible to be a | ||
qualified jurisdiction, the commissioner must: | ||
(1) evaluate the appropriateness and effectiveness of | ||
the reinsurance supervisory system of the jurisdiction, both | ||
initially and on an ongoing basis; and | ||
(2) consider whether that jurisdiction imposes credit | ||
for reinsurance requirements on reinsurers licensed and domiciled | ||
in the United States that are at least as favorable as those | ||
provided by this section. | ||
(g) A qualified jurisdiction must share information and | ||
cooperate with the commissioner with respect to all certified | ||
reinsurers doing business within the jurisdiction. Jurisdictions | ||
within the United States that meet the requirement for | ||
accreditation under the National Association of Insurance | ||
Commissioners' financial standards and accreditation program shall | ||
be recognized as qualified jurisdictions. A jurisdiction may not | ||
be recognized as a qualified jurisdiction if the commissioner has | ||
determined that the jurisdiction does not adequately and promptly | ||
enforce final United States judgments and arbitration awards. The | ||
commissioner may also: | ||
(1) defer to a list of qualified jurisdictions | ||
published by the National Association of Insurance Commissioners; | ||
and | ||
(2) suspend a reinsurer's certification indefinitely, | ||
if a certified reinsurer's domiciliary jurisdiction ceases to be a | ||
qualified jurisdiction. | ||
(h) The commissioner shall develop a rating system and | ||
assign a rating to each certified reinsurer. The commissioner | ||
shall publish a list of each certified reinsurer and the certified | ||
reinsurer's rating. In rating certified reinsurers, the | ||
commissioner shall consider: | ||
(1) the certified reinsurer's financial strength | ||
ratings assigned by rating agencies recognized by the commissioner; | ||
and | ||
(2) the reinsurer's reputation for promptly paying | ||
claims to United States ceding insurers, including cases in which | ||
the reinsurer has resisted the enforcement of a final United States | ||
judgment. | ||
(i) The commissioner shall determine the security a | ||
certified reinsurer must maintain on obligations assumed from | ||
ceding insurers domiciled in this state at a level consistent with | ||
its rating. | ||
(j) A domestic ceding insurer may qualify for full financial | ||
statement credit for reinsurance ceded to a certified reinsurer if | ||
the certified reinsurer maintains security: | ||
(1) in a form acceptable to the commissioner and | ||
consistent with the insurance laws of this state; or | ||
(2) in a trust in accordance with Subchapter D, except | ||
as otherwise provided. | ||
(k) If a certified reinsurer maintains a trust under | ||
Subchapter D to secure its obligations, the certified reinsurer | ||
shall maintain separate trust accounts for its obligations incurred | ||
under reinsurance agreements issued or renewed as a certified | ||
reinsurer with reduced security as permitted by this section or | ||
comparable laws of other United States jurisdictions and for its | ||
obligations subject to Subchapter D. | ||
(l) The minimum trust surplus requirements in Subchapter D | ||
are not applicable to a multibeneficiary trust maintained by a | ||
certified reinsurer for the purpose of securing obligations | ||
incurred under this section. | ||
(m) If a certified reinsurer insufficiently secures | ||
obligations incurred under this section, the commissioner: | ||
(1) shall reduce the allowable credit by an amount | ||
proportionate to the deficiency; and | ||
(2) may impose further reductions in allowable credit | ||
if the commissioner determines that there is a material risk the | ||
certified reinsurer will not pay its obligations in full when due. | ||
(n) The commissioner shall require a certified reinsurer | ||
whose certification has been terminated under this section to | ||
secure 100 percent of its obligations. This subsection does not | ||
apply to a certified reinsurer with inactive status or to a | ||
reinsurer whose certification has been suspended, even if the | ||
commissioner assigns a higher rating to that reinsurer. | ||
(o) If a jurisdiction accredited by the National | ||
Association of Insurance Commissioners certifies an applicant for | ||
certification as a reinsurer, the commissioner: | ||
(1) may defer to that jurisdiction's certification and | ||
the rating assigned by that jurisdiction; and | ||
(2) shall consider the assuming insurer a certified | ||
reinsurer. | ||
(p) A certified reinsurer that ceases to assume new business | ||
in this state may request to maintain its certification in inactive | ||
status in order to continue to qualify for a reduction in security | ||
for its in-force business. An inactive certified reinsurer shall | ||
continue to comply with all applicable requirements of this section | ||
and the commissioner shall assign an applicable rating that | ||
describes why the reinsurer is not assuming new business. | ||
Sec. 492.1036. SUSPENSION OR REVOCATION OF ACCREDITATION OR | ||
CERTIFICATION. The commissioner may suspend or revoke a | ||
reinsurer's accreditation or certification if an accredited or | ||
certified reinsurer ceases to meet the requirements for | ||
accreditation or certification. The commissioner must give the | ||
reinsurer notice and opportunity for hearing. The suspension or | ||
revocation may not take effect until after the commissioner's order | ||
on the hearing, unless: | ||
(1) the reinsurer waives its right to a hearing; | ||
(2) the suspension or revocation is based on a | ||
regulatory action in the reinsurer's domiciliary jurisdiction or | ||
United States port of entry, or on the voluntary surrender or | ||
termination of the reinsurer's eligibility to transact insurance or | ||
reinsurance business in its domiciliary jurisdiction or in its | ||
United States port of entry; or | ||
(3) the commissioner determines that an emergency | ||
requires immediate action and a court of competent jurisdiction has | ||
not stayed the commissioner's action. | ||
Sec. 492.1037. CONTINUED CREDIT FOLLOWING CHANGE OR | ||
WITHDRAWAL IN RATING, ACCREDITATION, OR CERTIFICATION. | ||
Notwithstanding the change or withdrawal of a reinsurer's rating, | ||
accreditation, or certification, on request by the ceding insurer, | ||
the commissioner may, in the interest of ensuring market stability | ||
and the solvency of the ceding insurer, authorize the ceding | ||
insurer to continue to take credit for all or part of the | ||
recoverable reinsurance that relates to the change or withdrawal | ||
for a specified period following the change or withdrawal. | ||
SECTION 3. Section 492.151, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 492.151. APPLICABILITY OF SUBCHAPTER. This subchapter | ||
applies to: | ||
(1) a trust that is used to qualify for a reinsurance | ||
credit under Section 492.102(a)(3) and as described by Sections | ||
492.1035(j) and (k); and | ||
(2) [ |
||
fund. | ||
SECTION 4. Section 492.152, Insurance Code, is amended by | ||
adding Subsection (c) to read as follows: | ||
(c) The commissioner may, after assessing the risk and | ||
determining that the new required surplus level is adequate for the | ||
protection of United States ceding insurers, policyholders, and | ||
claimants in light of reasonably foreseeable adverse loss | ||
development, authorize a reduction in the required trusteed surplus | ||
under Subsection (a)(2) if the assuming insurer has discontinued | ||
underwriting new business secured by the trust for more than three | ||
years. The risk assessment may involve an actuarial review, | ||
including an independent analysis of reserves and cash flows, and | ||
must consider all material risk factors, including, if applicable, | ||
the lines of business involved, the stability of the incurred loss | ||
estimates, and the effect of the surplus requirements on the | ||
assuming insurer's liquidity or solvency. The minimum required | ||
trusteed surplus may not be reduced to an amount less than 30 | ||
percent of the assuming insurer's liabilities attributable to | ||
reinsurance ceded by United States ceding insurers. | ||
SECTION 5. Section 492.155(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) To enable the commissioner to determine the sufficiency | ||
of the trust fund under Section 492.102(a)(3) and for purposes of | ||
Sections 492.1035(j) and (k), the assuming insurer shall report to | ||
the department not later than March 1 of each year information | ||
substantially the same as the information required to be reported | ||
by an authorized insurer on the National Association of Insurance | ||
Commissioners' Annual Statement form. | ||
SECTION 6. Section 492.156(a), Insurance Code, is amended | ||
to read as follows: | ||
(a) A ceding insurer may not be allowed credit under Section | ||
492.102(a)(3) for reinsurance ceded to an assuming insurer that is | ||
not authorized, [ |
||
business of insurance or reinsurance in this state unless the | ||
assuming insurer agrees in the reinsurance contract: | ||
(1) that, if the assuming insurer fails to perform the | ||
assuming insurer's obligations under the reinsurance contract, the | ||
assuming insurer, at the request of the ceding insurer, will: | ||
(A) submit to the jurisdiction of a court in any | ||
state of the United States; | ||
(B) comply with all requirements necessary to | ||
give the court jurisdiction; and | ||
(C) abide by the final decision of that court or, | ||
if the court's decision is appealed, of the appellate court; and | ||
(2) to designate the commissioner or an attorney as an | ||
agent for service of process in any action, suit, or proceeding | ||
instituted by or on behalf of the ceding insurer. | ||
SECTION 7. Section 493.102(a), Insurance Code, is amended | ||
to read as follows: | ||
(a) A ceding insurer may be allowed credit for reinsurance | ||
ceded, as an asset or as a deduction from liability, only if the | ||
reinsurance is ceded to an assuming insurer that: | ||
(1) is authorized to engage in the business of | ||
insurance or reinsurance in this state; | ||
(2) is accredited as a reinsurer in this state, as | ||
provided by Section 493.103; [ |
||
(3) subject to Subchapter D, maintains, in a qualified | ||
United States financial institution that has been granted the | ||
authority to operate with fiduciary powers, a trust fund to pay | ||
valid claims of: | ||
(A) the assuming insurer's United States | ||
policyholders and ceding insurers; and | ||
(B) the policyholders' and ceding insurers' | ||
assigns and successors in interest; or | ||
(4) the commissioner determines meets the | ||
requirements of Section 493.1035. | ||
SECTION 8. Subchapter C, Chapter 493, Insurance Code, is | ||
amended by adding Sections 493.1035, 493.1036, and 493.1037 to read | ||
as follows: | ||
Sec. 493.1035. CREDIT FOR CERTAIN CERTIFIED REINSURERS. | ||
(a) An asset or deduction from liability shall be allowed for | ||
reinsurance ceded to an assuming insurer that the commissioner | ||
certifies as a reinsurer and that secures its obligations in | ||
accordance with the requirements of this section. | ||
(b) The commissioner may certify an assuming insurer that: | ||
(1) is domiciled and licensed to transact insurance or | ||
reinsurance in a qualified jurisdiction under Subsections (e)-(g); | ||
(2) maintains minimum capital and a surplus in an | ||
amount the commissioner determines acceptable; | ||
(3) maintains a financial strength rating from two or | ||
more rating agencies the commissioner determines are acceptable; | ||
(4) submits to this state's jurisdiction; | ||
(5) designates the commissioner as an agent for | ||
service of process in any action, suit, or proceeding instituted in | ||
this state; | ||
(6) provides security for 100 percent of the assuming | ||
insurer's liabilities for reinsurance ceded by United States ceding | ||
insurers if the assuming reinsurer resists enforcement of a valid, | ||
nonappealable United States judgment; and | ||
(7) satisfies other requirements for certification | ||
the commissioner determines relevant. | ||
(c) A ceding insurer or certified reinsurer may apply to the | ||
commissioner for a waiver from the requirement of Subsection | ||
(b)(6). The commissioner may enter an order that grants a waiver | ||
from these requirements if the commissioner determines the waiver | ||
is appropriate in the interests of ensuring market stability. | ||
(d) The commissioner may certify a group of insurers, | ||
including incorporated and individual unincorporated underwriters, | ||
as a certified reinsurer if, in addition to satisfying requirements | ||
of Subsection (a): | ||
(1) the group of insurers satisfies minimum capital | ||
and surplus requirements in an amount determined by the | ||
commissioner to provide adequate protection by placing the group | ||
and its members' capital and surplus equivalents into a joint | ||
central fund that may be applied to an unsatisfied obligation of the | ||
group or its members; | ||
(2) each incorporated member of the group of insurers | ||
is not engaged as a member of the group in business other than | ||
underwriting and is subject to the same level of regulation and | ||
solvency control by the group's domiciliary regulator as the | ||
unincorporated members; and | ||
(3) the group of insurers provides to the | ||
commissioner, not later than the 90th day after the date the group's | ||
financial statements are due to be filed with the group's | ||
domiciliary regulator, the annual certification of solvency of | ||
each underwriter member by the group's domiciliary regulator, or if | ||
a certification is unavailable, financial statements prepared by | ||
independent public accountants of each underwriter member of the | ||
group. | ||
(e) The commissioner shall publish a list of qualified | ||
jurisdictions with respect to which an assuming insurer licensed | ||
and domiciled in the jurisdiction may be considered for | ||
certification by the commissioner as a certified reinsurer. | ||
(f) To determine whether a jurisdiction of an assuming | ||
insurer located outside of the United States may be eligible to be a | ||
qualified jurisdiction, the commissioner must: | ||
(1) evaluate the appropriateness and effectiveness of | ||
the reinsurance supervisory system of the jurisdiction, both | ||
initially and on an ongoing basis; and | ||
(2) consider whether that jurisdiction imposes credit | ||
for reinsurance requirements on reinsurers licensed and domiciled | ||
in the United States that are at least as favorable as those | ||
provided by this section. | ||
(g) A qualified jurisdiction must share information and | ||
cooperate with the commissioner with respect to all certified | ||
reinsurers doing business within the jurisdiction. Jurisdictions | ||
within the United States that meet the requirement for | ||
accreditation under the National Association of Insurance | ||
Commissioners' financial standards and accreditation program shall | ||
be recognized as qualified jurisdictions. A jurisdiction may not | ||
be recognized as a qualified jurisdiction if the commissioner has | ||
determined that the jurisdiction does not adequately and promptly | ||
enforce final United States judgments and arbitration awards. The | ||
commissioner may also: | ||
(1) defer to a list of qualified jurisdictions | ||
published by the National Association of Insurance Commissioners; | ||
and | ||
(2) suspend a reinsurer's certification indefinitely, | ||
if a certified reinsurer's domiciliary jurisdiction ceases to be a | ||
qualified jurisdiction. | ||
(h) The commissioner shall develop a rating system and | ||
assign a rating to each certified reinsurer. The commissioner | ||
shall publish a list of each certified reinsurer and the certified | ||
reinsurer's rating. In rating certified reinsurers, the | ||
commissioner shall consider: | ||
(1) the certified reinsurer's financial strength | ||
ratings assigned by rating agencies recognized by the commissioner; | ||
and | ||
(2) the reinsurer's reputation for promptly paying | ||
claims to United States ceding insurers, including cases in which | ||
the reinsurer has resisted the enforcement of a final United States | ||
judgment. | ||
(i) The commissioner shall determine the security a | ||
certified reinsurer must maintain on obligations assumed from | ||
ceding insurers domiciled in this state at a level consistent with | ||
its rating. | ||
(j) A domestic ceding insurer may qualify for full financial | ||
statement credit for reinsurance ceded to a certified reinsurer if | ||
the certified reinsurer maintains security: | ||
(1) in a form acceptable to the commissioner and | ||
consistent with the insurance laws of this state; or | ||
(2) in a trust in accordance with Subchapter D, except | ||
as otherwise provided. | ||
(k) If a certified reinsurer maintains a trust under | ||
Subchapter D to secure its obligations, the certified reinsurer | ||
shall maintain separate trust accounts for its obligations incurred | ||
under reinsurance agreements issued or renewed as a certified | ||
reinsurer with reduced security as permitted by this section or | ||
comparable laws of other United States jurisdictions and for its | ||
obligations subject to Subchapter D. | ||
(l) The minimum trust surplus requirements in Subchapter D | ||
are not applicable to a multibeneficiary trust maintained by a | ||
certified reinsurer for the purpose of securing obligations | ||
incurred under this section. | ||
(m) If a certified reinsurer insufficiently secures | ||
obligations incurred under this section, the commissioner: | ||
(1) shall reduce the allowable credit by an amount | ||
proportionate to the deficiency; and | ||
(2) may impose further reductions in allowable credit | ||
if the commissioner determines that there is a material risk the | ||
certified reinsurer will not pay its obligations in full when due. | ||
(n) The commissioner shall require a certified reinsurer | ||
whose certification has been terminated under this section to | ||
secure 100 percent of its obligations. This subsection does not | ||
apply to a certified reinsurer with inactive status or to a | ||
reinsurer whose certification has been suspended, even if the | ||
commissioner assigns a higher rating to that reinsurer. | ||
(o) If a jurisdiction accredited by the National | ||
Association of Insurance Commissioners certifies an applicant for | ||
certification as a reinsurer, the commissioner: | ||
(1) may defer to that jurisdiction's certification and | ||
the rating assigned by that jurisdiction; and | ||
(2) shall consider the assuming insurer a certified | ||
reinsurer. | ||
(p) A certified reinsurer that ceases to assume new business | ||
in this state may request to maintain its certification in inactive | ||
status in order to continue to qualify for a reduction in security | ||
for its in-force business. An inactive certified reinsurer shall | ||
continue to comply with all applicable requirements of this section | ||
and the commissioner shall assign an applicable rating that | ||
describes why the reinsurer is not assuming new business. | ||
Sec. 493.1036. SUSPENSION OR REVOCATION OF ACCREDITATION OR | ||
CERTIFICATION. The commissioner may suspend or revoke a | ||
reinsurer's accreditation or certification if an accredited or | ||
certified reinsurer ceases to meet the requirements for | ||
accreditation or certification. The commissioner must give the | ||
reinsurer notice and opportunity for hearing. The suspension or | ||
revocation may not take effect until after the commissioner's order | ||
on the hearing, unless: | ||
(1) the reinsurer waives its right to a hearing; | ||
(2) the suspension or revocation is based on a | ||
regulatory action in the reinsurer's domiciliary jurisdiction or | ||
United States port of entry, or on the voluntary surrender or | ||
termination of the reinsurer's eligibility to transact insurance or | ||
reinsurance business in its domiciliary jurisdiction or in its | ||
United States port of entry; or | ||
(3) the commissioner determines that an emergency | ||
requires immediate action and a court of competent jurisdiction has | ||
not stayed the commissioner's action. | ||
Sec. 493.1037. CONTINUED CREDIT FOLLOWING CHANGE OR | ||
WITHDRAWAL IN RATING, ACCREDITATION, OR CERTIFICATION. | ||
Notwithstanding the change or withdrawal of a reinsurer's rating, | ||
accreditation, or certification, on request by the ceding insurer, | ||
the commissioner may, in the interest of ensuring market stability | ||
and the solvency of the ceding insurer, authorize the ceding | ||
insurer to continue to take credit for all or part of the | ||
recoverable reinsurance that relates to the change or withdrawal | ||
for a specified period following the change or withdrawal. | ||
SECTION 9. Section 493.151, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 493.151. APPLICABILITY OF SUBCHAPTER. This subchapter | ||
applies to: | ||
(1) a trust that is used to qualify for a reinsurance | ||
credit under Section 493.102(a)(3) and as described by Sections | ||
493.1035(j) and (k); and | ||
(2) [ |
||
fund. | ||
SECTION 10. Section 493.152, Insurance Code, is amended by | ||
adding Subsection (d) to read as follows: | ||
(d) The commissioner may, after assessing the risk and | ||
determining that the new required surplus level is adequate for the | ||
protection of United States ceding insurers, policyholders, and | ||
claimants in light of reasonably foreseeable adverse loss | ||
development, authorize a reduction in the required trusteed surplus | ||
under Subsection (a)(2) if the assuming insurer has discontinued | ||
underwriting new business secured by the trust for more than three | ||
years. The risk assessment may involve an actuarial review, | ||
including an independent analysis of reserves and cash flows, and | ||
must consider all material risk factors, including, if applicable, | ||
the lines of business involved, the stability of the incurred loss | ||
estimates, and the effect of the surplus requirements on the | ||
assuming insurer's liquidity or solvency. The minimum required | ||
trusteed surplus may not be reduced to an amount less than 30 | ||
percent of the assuming insurer's liabilities attributable to | ||
reinsurance ceded by United States ceding insurers. | ||
SECTION 11. Section 493.155(b), Insurance Code, is amended | ||
to read as follows: | ||
(b) To enable the commissioner to determine the sufficiency | ||
of the trust fund under Section 493.102(a)(3) and for purposes of | ||
Sections 493.1035(j) and (k), the assuming insurer shall report to | ||
the department not later than March 1 of each year information | ||
substantially the same as the information required to be reported | ||
by an authorized insurer on the National Association of Insurance | ||
Commissioners' Annual Statement form. | ||
SECTION 12. Section 493.156(a), Insurance Code, is amended | ||
to read as follows: | ||
(a) A ceding insurer may not be allowed credit under Section | ||
493.102(a)(3) for reinsurance ceded to an assuming insurer that is | ||
not authorized, [ |
||
business of insurance or reinsurance in this state unless the | ||
assuming insurer agrees in the reinsurance contract: | ||
(1) that, if the assuming insurer fails to perform the | ||
assuming insurer's obligations under the reinsurance contract, the | ||
assuming insurer, at the request of the ceding insurer, will: | ||
(A) submit to the jurisdiction of a court in any | ||
state of the United States; | ||
(B) comply with all requirements necessary to | ||
give the court jurisdiction; and | ||
(C) abide by the final decision of that court or, | ||
if the court's decision is appealed, of the appellate court; and | ||
(2) to designate the commissioner or an attorney as an | ||
agent for service of process in any action, suit, or proceeding | ||
instituted by or on behalf of the ceding insurer. | ||
SECTION 13. This Act applies only to a reinsurance contract | ||
that is entered into or renewed on or after January 1, 2012. A | ||
reinsurance contract that is entered into or renewed before January | ||
1, 2012, is governed by the law as it existed immediately before the | ||
effective date of this Act, and that law is continued in effect for | ||
that purpose. | ||
SECTION 14. This Act takes effect September 1, 2011. |