Insurance Code § 846.154

Sec. 846.154. CASH RESERVE REQUIREMENTS. (a) The amount of cash reserves recommended under Section 846.153(c)(2) may not be less than the greater of: (1) 20 percent of the total contributions in the preceding plan year; or (2) 20 percent of the total estimated contributions for the current plan year. (b) Cash reserves required by this section must be: (1) computed with proper actuarial regard for: (A) known claims, paid and outstanding; (B) a history of incurred but not reported claims; (C) claims handling expenses; (D) unearned premium; (E) an estimate for bad debts; (F) a trend factor; and (G) a margin for error; and (2) maintained in cash or federally guaranteed obligations of less than five-year maturity that have a fixed or recoverable principal amount or in other investments as the commissioner may authorize by rule. Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.