Texas Insurance Code
§ 884.553 — REINSURANCE AGREEMENT
IN § 884.553Title 6. ORGANIZATION OF INSURERS AND RELATED ENTITIES · Part E. MUTUAL AND FRATERNAL COMPANIES AND RELATED ENTITIES · Ch. 884. STIPULATED PREMIUM INSURANCE COMPANIES · Art. L. DIRECT REINSURANCE AGREEMENTS WITH MUTUAL ASSESSMENT COMPANIES
Statute text
View on source(a)A reinsurance agreement under this subchapter must provide that the stipulated premium company is to assume the policies of the mutual assessment company.
(b)The reinsurance agreement must provide for the computation, on the effective date of the agreement, of:
(1)the amount of the net assets, including mortuary and expense funds, of the mutual assessment company that is to be transferred to the stipulated premium company after the payment of all liabilities;
(2)the amount of the required reserves to be established under the reserve and interest table used in the agreement; and
(3)the amount of any deficiency reserve resulting from the computation of Subdivisions (1) and (2).
(c)The deficiency reserve is subject to Section 884.453, except that instead of reducing the deficiency as required by that section, the reinsurance agreement may provide for immediate premium rate adjustments, in accordance with accepted actuarial practices and standards, to eliminate the deficiency at the time of reinsurance or during the period allowed for eliminating the deficiency under Section 884.453.
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Legislative history
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.