A captive insurance company may provide reinsurance in specified circumstances, but must notify the commissioner within 30 days after entering or ending a reinsurance agreement.
Sec. 964.052. REINSURANCE. (a) A captive insurance company may provide reinsurance to an insurer covering the operational risks of the captive insurance company's affiliates, or risks of a controlled unaffiliated business, that the captive insurance company may insure directly under Section 964.051 and: (1) employee benefit plans offered by affiliates; (2) liability insurance an affiliate must maintain as a prerequisite for obtaining a license or permit if the law requires maintenance of the liability insurance; (3) credit life insurance and credit disability insurance offered as a part of, or directly relating to, the operational risks of an affiliate; and (4) workers' compensation insurance and employer liability policies issued to affiliates if the insurer that directly issues workers' compensation insurance and employer's liability policies or its licensed, if required by law, administrator or adjuster: (A) services all claims incurred during the policy period; and (B) complies with all requirements for an insurer under this code, including Chapter 462, and under Title 5, Labor Code. (b) A captive insurance company shall provide notice to the commissioner of a reinsurance agreement that the company becomes a party to not later than the 30th day after the date of the execution of the agreement. (c) A captive insurance company shall provide notice of a termination of a previously filed reinsurance agreement to the commissioner not later than the 30th day after the date of termination. (d) A captive insurance company may take credit for reserves on risks or portions of risks ceded to reinsurers under Subchapter C, Chapter 493. (e) Notwithstanding Section 964.064, a captive insurance company, with the commissioner's approval, may accept risks from and cede risks to or take credit for reserves on risks ceded to: (1) a captive reinsurance pool composed only of other captive insurance companies holding a certificate of authority under this chapter or a similar law of another jurisdiction; or (2) an affiliated captive insurance company holding a certificate of authority under this chapter or a similar law of another jurisdiction. (f) A captive insurance company may cede risks to or take credit for reserves on risks ceded to a nonaffiliated reinsurer if the reinsurer: (1) holds a certificate of authority to transact insurance or reinsurance in a jurisdiction that is: (A) on the list of qualified jurisdictions of the National Association of Insurance Commissioners; and (B) acceptable to the commissioner; (2) maintains minimum capital and surplus, or the equivalent, of $250 million as of the end of the preceding year; and (3) maintains a financial strength rating of B+ or its equivalent from a national or international rating agency that: (A) has registered with the Securities and Exchange Commission; (B) is designated as a nationally recognized statistical rating organization; (C) is on the list of Credit Rating Providers by the Securities Valuation Office of the National Association of Insurance Commissioners; and (D) is acceptable to the commissioner. Added by Acts 2013, 83rd Leg., R.S., Ch. 569 (S.B. 734), Sec. 2, eff. June 14, 2013. Amended by: Acts 2015, 84th Leg., R.S., Ch. 469 (S.B. 667), Sec. 1, eff. June 15, 2015. Acts 2015, 84th Leg., R.S., Ch. 469 (S.B. 667), Sec. 2, eff. June 15, 2015. Acts 2017, 85th Leg., R.S., Ch. 252 (H.B. 1187), Sec. 1, eff. September 1, 2017. Acts 2017, 85th Leg., R.S., Ch. 594 (S.B. 1070), Sec. 3.12, eff. September 1, 2017. Acts 2017, 85th Leg., R.S., Ch. 1050 (H.B. 1944), Sec. 1.03, eff. June 15, 2017.