reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.305. Premiums on Life Insurance Policies

Sec. 884.305.  PREMIUMS ON LIFE INSURANCE POLICIES.  The premiums charged on a life insurance policy issued by a stipulated premium company may not be less than the renewal net premium computed under the reserve standard adopted by the stipulated premium company and approved by the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.306. Life Insurance Contract

Sec. 884.306.  LIFE INSURANCE CONTRACT.  A life insurance policy issued by a stipulated premium company constitutes the entire contract, except that if a copy of the application for the policy is attached to the policy, the policy and application constitute the entire contract.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.307. Issuance of Annuity Contract

Sec. 884.307.  ISSUANCE OF ANNUITY CONTRACT.  (a)  A stipulated premium company that possesses capital and unencumbered surplus in a combined amount of at least $100,000 more than all of its liabilities, including contingent liabilities, may issue annuity contracts as authorized by Chapters 3 and 1701 and Title 7.
(b)  The stipulated premium company shall maintain reserves on the contracts in accordance with the statutes governing reserves on equivalent contracts issued by a legal reserve company.
(c)  A stipulated premium company that writes annuity contracts under this section shall maintain capital and unencumbered surplus in at least the combined amount required by Subsection (a).
(d)  A stipulated premium company that does not comply with Subsection (c) is considered to be insolvent.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.082, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.308. Limits on Amount of Accident and Health Insurance Policies

Sec. 884.308.  LIMITS ON AMOUNT OF ACCIDENT AND HEALTH INSURANCE POLICIES.  (a)  A stipulated premium company may not assume liability on or indemnify one person for any risk under one or more accident, health, or hospitalization insurance policies, or any combination of those policies in an amount that exceeds $10,000, unless the amount of the issued, outstanding, and stated capital of the company is at least $700,000.
(b)  A stipulated premium company that before January 1, 2002, ceases to assume liability on, or indemnify any risk under a policy described by Subsection (a) in the amount specified by Subsection (a), and notifies the commissioner of that action is exempt from the requirements of Subsection (a) until the date the company resumes writing those policies.  A company that resumes assuming liability on or indemnifying risks under these policies shall comply with Subsections (a) and (c).  For purposes of this subsection, renewal of a policy is not considered to be writing a policy.
(c)  A stipulated premium company that is exempt under Subsection (b) shall maintain its issued, outstanding, and stated capital in an amount that is at least:
(1)  $100,000, if the last date that the company writes a policy described by Subsection (a) is before January 1, 1993;
(2)  $160,000, if the last date that the company writes a policy described by Subsection (a) is during 1993;
(3)  $220,000, if the last date that the company writes a policy described by Subsection (a) is during 1994;
(4)  $280,000, if the last date that the company writes a policy described by Subsection (a) is during 1995;
(5)  $340,000, if the last date that the company writes a policy described by Subsection (a) is during 1996;
(6)  $400,000, if the last date that the company writes a policy described by Subsection (a) is during 1997;
(7)  $460,000, if the last date that the company writes a policy described by Subsection (a) is during 1998;
(8)  $520,000, if the last date that the company writes a policy described by Subsection (a) is during 1999;
(9)  $580,000, if the last date that the company writes a policy described by Subsection (a) is during 2000;  and
(10)  $640,000, if the last date that the company writes a policy described by Subsection (a) is during 2001.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.309. Adjustment of Premiums

Sec. 884.309.  ADJUSTMENT OF PREMIUMS.  (a)  The board of directors of a stipulated premium company by resolution may, subject to this chapter, increase or otherwise adjust a rate of premium on any insurance policy it issues, reinsures, or assumes when, in the board's discretion, the adjustment is necessary.
(b)  In making a comprehensive adjustment of one or more classes of the stipulated premium company's policies, the board of directors may provide that an insured who is required to pay an increased premium may choose to pay a part or none of the amount of the increase and receive a reduction of the corresponding insurance benefits proportionate to the value of the unpaid part of the increase.
(c)  This section does not apply to a policy:
(1)  issued by a stipulated premium company that on the date the policy is issued possesses an unencumbered surplus in an amount of at least $50,000;
(2)  on which the stipulated premium company has relinquished the right to adjust rates;  and
(3)  under which the premium for life insurance requires the payment of a premium for life insurance that alone is sufficient to maintain reserves at least equal to those computed on the basis of the 1958 Commissioners Standard Ordinary Table of Mortality with interest not to exceed 3-1/2 percent a year.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.310. Agent

Sec. 884.310.  AGENT.  Each agent of a stipulated premium company must be licensed under Title 13.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.  Amended by Acts 2003, 78th Leg., ch. 1276, Sec. 10A.221(a), eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.083, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter G. Powers and Duties Relating to Coverages › Section 884.311. Law Governing Investments; Election

Sec. 884.311.  LAW GOVERNING INVESTMENTS;  ELECTION.  (a)  A stipulated premium insurance company issuing life, health, or accident coverages or maintaining policies in force that were issued in accordance with Subchapter I may elect that the company's investments and transactions be governed by Subchapter C, Chapter 425.
(b)  The election under Subsection (a) must be made by written notice to the commissioner and is effective on the first day of the calendar quarter following the day on which the notice is filed with the commissioner.
(c)  After the second anniversary of the effective date of an initial election authorized by this section, the stipulated premium insurance company may elect that the company's investments and transactions be governed by Sections 425.203-425.228.
(d)  The subsequent election under Subsection (c) must be made by written notice to the commissioner and is effective on the first day of the calendar quarter following the day on which the notice is filed with the commissioner.
(e)  After a stipulated premium insurance company has made a subsequent election under Subsection (c), the company may make another election under this section, subject to the approval of the election by the commissioner.
Added by Acts 2003, 78th Leg., ch. 487, Sec. 1, eff. Sept. 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.084, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.351. General Requirements for Policy and Application Forms

Sec. 884.351.  GENERAL REQUIREMENTS FOR POLICY AND APPLICATION FORMS.  (a)  Each stipulated premium company policy or application form must contain on its face immediately after the name of the company "A Stipulated Premium Company."
(b)  A stipulated premium company shall provide for an adjustment of the premium rate on the insurance contract in each insurance policy it issues, reinsures, or assumes that is subject to a premium adjustment under Section 884.309.  Each policy subject to a premium adjustment under that section must contain on the front of the policy a statement that the premium is subject to readjustment.
(c)  A stipulated premium company's policy of insurance may not contain "Approved by the Commissioner of Insurance" or words of a similar meaning.
(d)  A life insurance policy issued by a stipulated premium company or an application for the policy may not contain language or be in a form that misleads the policyholder or applicant about the kind of insurance offered or the rights or benefits of the policyholder or applicant.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.352. Requirements for Accident, Health, and Hospitalization Insurance Policies

Sec. 884.352.  REQUIREMENTS FOR ACCIDENT, HEALTH, AND HOSPITALIZATION INSURANCE POLICIES.  An accident, health, or hospitalization insurance policy issued, reinsured, or assumed by a stipulated premium company must contain a premium redetermination clause that permits the company's board of directors to adjust the premium rate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.353. Life Insurance Application Forms

Sec. 884.353.  LIFE INSURANCE APPLICATION FORMS.  (a)  An application for a life insurance policy issued by a stipulated premium company must be signed by the applicant.  If the applicant is a minor, the application may be signed by a parent or guardian.
(b)  The application for a policy that provides that a misstatement relating to the applicant's health or physical condition may void the policy within the contestable period must state that provision in language approved by the department.  The statement must be in not less than 10-point type.
(c)  In the absence of fraud each statement in an application is regarded as a representation and not a warranty.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.354. Life Insurance Policy Forms; Incontestability

Sec. 884.354.  LIFE INSURANCE POLICY FORMS;  INCONTESTABILITY.  (a)  Each life insurance policy issued by a stipulated premium company must state on the front page:
(1)  the amount of death benefit to be paid;  and
(2)  the circumstances or conditions under which the benefit is to be paid.
(b)  Each condition of a life insurance policy must be stated in the policy.
(c)  A life insurance policy must provide that a policy in force for two years becomes incontestable, except for nonpayment of premiums, on the second anniversary of the date of issuance, if the insured does not die before that date.
(d)  A life insurance policy must provide that if the age of the insured is misstated, the amount of insurance is the amount that the premium paid would have purchased if the age had been stated correctly, based on premium rates in effect when the insured dies.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.355. Designation of Beneficiaries

Sec. 884.355.  DESIGNATION OF BENEFICIARIES.  The designation of a beneficiary under a life insurance policy issued by a stipulated premium company must comply with Subchapter B, Chapter 1103, and Subchapter A, Chapter 1104.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.356. Life Insurance Benefit Reductions or Increases

Sec. 884.356.  LIFE INSURANCE BENEFIT REDUCTIONS OR INCREASES.  (a)  A life insurance policy may provide for reduced benefits if the insured:
(1)  dies or is injured while engaged in:
(A)  military, naval, or aerial service or aerial flight during peace or war;  or
(B)  a hazardous occupation specified in the policy;  or
(2)  dies by the insured's own hand, regardless of whether the insured is sane or insane.
(b)  The front page of a life insurance policy must call attention to any reduction or exclusion of benefits provided by the policy.  The circumstances or conditions under which the reduction or exclusion applies must be stated plainly in the policy.
(c)  If a policy that provides natural death benefits contains a provision for reducing the greatest death benefit provided by the policy for a specified insured for a reason other than a reason specified by Subsection (a):
(1)  the reduced death benefit for the insured must at all times when the reduction is in effect equal or exceed 120 percent of the total premium paid on that policy by the insured;  and
(2)  the reduction must end before the fifth anniversary of the date the policy is issued.
(d)  Subsection (c) does not apply to a life insurance policy on which the reduction of the death benefit does not apply at the time of the death of the insured.
(e)  If a life insurance policy provides for an increase of the initial amount of the death benefit for a specified insured one or more times during the first five years of the policy, the amount of death benefit for the insured must at all times during the period of the increasing benefit equal at least 120 percent of the premiums paid on that policy by the insured during the period of the increase.
(f)  Subsection (e) does not apply to a life insurance policy that has been in force for more than five years from the date the policy is issued.
(g)  This section does not apply to a family group life insurance policy described by Section 884.451(b).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter H. Contents of Applications and Policies › Section 884.357. Form Approval

Sec. 884.357.  FORM APPROVAL.  The approval of a form of an insurance policy issued by a stipulated premium company is governed by Chapter 1701.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.085, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.401. Authority Cumulative

Sec. 884.401.  AUTHORITY CUMULATIVE.  The authority provided by this subchapter is in addition to the authority provided by this chapter for the issuance of other insurance coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.402. Additional Coverage

Sec. 884.402.  ADDITIONAL COVERAGE.  A stipulated premium company that, at the time it begins to issue coverages under this subchapter, possesses the amounts of capital and unencumbered surplus equal to or greater than the corresponding amounts required for organization of a life and health company under Sections 841.052, 841.054, 841.204, 841.205, 841.301, and 841.302 may, subject to Section 884.403:
(1)  issue any kind of life insurance coverage authorized by Chapter 3, 841, or 1701 or Title 7;
(2)  issue any kind of health or accident insurance coverage authorized by:
(A)  Title 7;
(B)  Chapter 3, 704, 841, 846, 982, 1201, 1202, 1203, 1210, 1251, 1252, 1253, 1254, 1301, 1351, 1354, 1359, 1364, 1368, 1501, 1504, 1505, 1552, 1575, 1576, 1579, 1581, 1625, 1651, 1652, or 1701;
(C)  Chapter 493, other than Section 493.051(b);
(D)  Subchapter B, Chapter 38, Subchapter D, Chapter 425, Subchapter A or F, Chapter 1204, Subchapter A, Chapter 1273, Subchapter A, B, or D, Chapter 1355, Subchapter A, Chapter 1366, or Subchapter A, Chapter 1507;
(E)  Section 1204.151, 1204.153, 1204.154, or 1451.051; or
(F)  Chapter 177, Local Government Code; or
(3)  issue life insurance coverage through policies without cash surrender values or nonforfeiture values and that exceed $10,000 on one life.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.086, eff. April 1, 2009.
Acts 2017, 85th Leg., R.S., Ch. 594 (S.B. 1070), Sec. 3.11, eff. September 1, 2017.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.403. Policy Requirements

Sec. 884.403.  POLICY REQUIREMENTS.  (a)  A policy issued under Section 884. 402(1) or (2) must be reserved and must comply with the law, including rules, applicable to a policy issued by a company authorized to engage in or engaging in the business of insurance under Chapter 841.
(b)  A policy of life insurance issued under Section 884.402(3):
(1)  must be reserved in accordance with a reserve table adopted by the department as appropriate for that type of policy;
(2)  must contain:
(A)  on its first page, a notice that the policy does not provide cash surrender values or other paid up nonforfeiture benefits or loan values;  and
(B)  provisions for a grace period for the payment of each premium after the first payment during which the policy remains in force;  and
(3)  may not be approved until the commissioner has adopted the standard of valuation, including an appropriate mortality table and interest rate.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.404. Capital and Surplus Requirements

Sec. 884.404.  CAPITAL AND SURPLUS REQUIREMENTS.  (a)  A stipulated premium company that issues any insurance coverage under this subchapter shall maintain at all times the capital and unencumbered surplus required under Section 884.054.
(b)  A stipulated premium company that does not comply with this section is considered to be impaired unless it reinsures all insurance coverages written under this subchapter with a company that:
(1)  is authorized to engage in the business of insurance in this state under this chapter or Chapter 841 or 882 or is an accident insurance company, health insurance company, or life insurance company authorized to engage in the business of insurance in this state under Chapter 982, as appropriate;  and
(2)  complies with the requirements prescribed by this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1309 (H.B. 2570), Sec. 6, eff. September 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.405. Agent; License

Sec. 884.405.  AGENT; LICENSE.  (a)  An agent may not solicit or write any coverage authorized by this subchapter unless the agent:
(1)  holds a license issued under Chapter 4054; and
(2)  is appointed by the stipulated premium company for which the agent is soliciting and writing coverage under this subchapter.
(b)  The commissioner may issue under Chapter 4054 a license for an agent to solicit and write any coverage authorized by this subchapter for a stipulated premium company.  Chapter 4054 applies to the stipulated premium company as if the company were a legal reserve life insurance company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.087, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.406. Annual Statement

Sec. 884.406.  ANNUAL STATEMENT.  A stipulated premium company that issues or maintains in force policies under this subchapter shall file the annual statement required by Section 884.256 not later than March 1 of each year.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.407. Relationship of Subchapter to Other Provisions of Chapter

Sec. 884.407.  RELATIONSHIP OF SUBCHAPTER TO OTHER PROVISIONS OF CHAPTER.  (a)  Section 884.305 and Subchapter J do not apply to a policy issued under this subchapter.
(b)  The provisions of Sections 884.309 and 884.351 relating to the adjustment of premiums do not apply to a life insurance policy issued under this subchapter.
(c)  The department may not consider losses sustained by a stipulated premium company on a policy issued under this subchapter when applying Section 884.206 or 884.308 to the company's life insurance policies not issued under this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter I. Authority to Issue Other Coverage › Section 884.408. Implementation of Subchapter

Sec. 884.408.  IMPLEMENTATION OF SUBCHAPTER.  The commissioner shall adopt reasonable rules to implement this subchapter, including:
(1)  rules adopting mortality and reserving tables required by Sections 884.403(b)(1) and (3);  and
(2)  reasonable and necessary rules for the content, form, and style of the notice and terms of the grace period required under Section 884.403(b)(2).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.451. Reserves on Individual and Group Life Insurance Policies

Sec. 884.451.  RESERVES ON INDIVIDUAL AND GROUP LIFE INSURANCE POLICIES.  (a)  A stipulated premium company shall maintain reserves on each of its individual life insurance policies in accordance with the reserve standard adopted by the company and approved by the department.  The standard must provide reserves that in the aggregate are equal to at least the reserve amounts computed using the 1956 Chamberlain Reserve Table with interest that does not exceed 3-1/2 percent per year.  A stipulated premium company may use the 1956 Chamberlain Reserve Table.
(b)  A stipulated premium company shall maintain reserves on family group life insurance policies on which a group premium is charged and under which the amount of a benefit depends on the sequence of deaths.  The amount of the reserves must be equal to the reserves that would be required under Subsection (a) on individual life insurance policies on the lives of:
(1)  the two oldest living members of the family group, with the amount of insurance for those two members determined assuming that the elder of the two will die first;  or
(2)  the living members of the family group, with the amount of insurance for each member of the family group determined assuming that each member will die first.
(c)  A stipulated premium company may select the method to be used to compute the amount of the reserves under Subsection (b).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.452. Reserves on Accident and Health Insurance Policies

Sec. 884.452.  RESERVES ON ACCIDENT AND HEALTH INSURANCE POLICIES.  A stipulated premium company shall maintain reserves on each accident and health insurance policy issued by the company in the manner required of a company authorized to issue that type of policy under Chapter 841.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.453. Deficiency Reserve

Sec. 884.453.  DEFICIENCY RESERVE.  (a)  On the effective date of a direct reinsurance agreement under Subchapter L, the stipulated premium company shall compute:
(1)  the amount of the reserves required under this chapter on the policies assumed under the agreement;  and
(2)  the amount of the net assets transferred to the stipulated premium company under the agreement.
(b)  If the amount of the net assets transferred is not equal to the amount of the required reserve, the difference shall be designated and carried as a deficiency reserve.  The deficiency reserve does not create insolvency of the stipulated premium company if the company, beginning with the first calendar year that begins after the effective date of the direct reinsurance agreement, reduces the computed deficiency amount, including interest at the assumed rate, by at least 10 percent during each year as computed on December 31 of that year.  The reduction must result in the deficiency reserve being eliminated on December 31 of the year for which the 11th annual statement is filed after the company enters into the direct reinsurance agreement.  The required reduction in the deficiency reserve may not exceed the cumulative aggregate amount of 10 percent a year.
(c)  If in any year a stipulated premium company has not reduced its deficiency reserve as required by Subsection (b), the company's board of directors by appropriate action shall increase premium rates by advancing the age of each insured at the date the insured's policy is issued or otherwise equitably adjust premium rates to correct that failure.  The board shall take that action not later than the 30th day after the date the reserves are computed.
(d)  If the board does not comply with Subsection (c), the stipulated premium company is considered to be insolvent for purposes of this chapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.454. Commissioner's Computation of Reserve Liability

Sec. 884.454.  COMMISSIONER'S COMPUTATION OF RESERVE LIABILITY.  (a)  As soon as practical each year, the department shall compute the reserve liability of each stipulated premium company that has outstanding insurance policies.
(b)  To make the computations, the department:
(1)  shall use the net premium basis in accordance with the reserve table and interest rate adopted by the stipulated premium company and approved by the commissioner;  and
(2)  may use group methods and approximate averages for fractions of a year.
(c)  The reserve liability may be computed on not more than a one-year preliminary term with allowance for any deficiency reserve under Section 884.453.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.455. Required Securities

Sec. 884.455.  REQUIRED SECURITIES.  The commissioner shall require that a stipulated premium company have securities of the class and character required by Sections 425.203-425.228 in the amount of the reserve liability computed for the company under Section 884.454 less any deficiency reserve under Section 884.453 after all the debts and claims against the company and the minimum capital required by this chapter have been applied.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 2E.088, eff. April 1, 2009.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter J. Reserves › Section 884.456. Increase of Reserves

Sec. 884.456.  INCREASE OF RESERVES.  (a)  If a stipulated premium company does not have the reserves required by this subchapter and the minimum capital required under this chapter, the company's board of directors by appropriate action shall increase premium rates on policies in force by advancing the age of each insured at the date the insured's policy is issued or otherwise equitably adjust premium rates to correct the reserve inadequacy.  The board shall take that action not later than the 30th day after the date the reserves are computed.
(b)  If the board of directors does not comply with Subsection (a), the stipulated premium company is treated as if the company had not corrected an impairment under Section 884.205(a).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.501. Direct Reinsurance Agreements Between Stipulated Premium Companies

Sec. 884.501.  DIRECT REINSURANCE AGREEMENTS BETWEEN STIPULATED PREMIUM COMPANIES.  (a)  Stipulated premium companies organized under this chapter may enter into a total or partial direct reinsurance agreement if the company assuming the policies under the agreement is authorized to transact the kinds of insurance provided by those policies.
(b)  Before a stipulated premium company may enter into a total direct reinsurance agreement:
(1)  the company must submit the agreement to the department;  and
(2)  the department must approve the agreement as fully protecting the interests of all the holders of policies being assumed.
(c)  A partial direct reinsurance agreement shall be filed with the department before the effective date of the agreement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.502. Direct Reinsurance Agreement With Legal Reserve Company

Sec. 884.502.  DIRECT REINSURANCE AGREEMENT WITH LEGAL RESERVE COMPANY.  (a)  A stipulated premium company may enter into a total or partial direct reinsurance agreement with a legal reserve life insurance company authorized to engage in the business of insurance in this state.
(b)  Before a reinsurance agreement under this section may take effect, it must be:
(1)  approved by a majority vote of the board of directors of each company;
(2)  submitted to the department;  and
(3)  approved by the department as complying with Section 884.503 or 884.504, as applicable.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.503. Direct Reinsurance of Accident or Health Insurance Policies

Sec. 884.503.  DIRECT REINSURANCE OF ACCIDENT OR HEALTH INSURANCE POLICIES.  (a)  In the direct reinsurance of a stipulated premium accident or health insurance policy under Section 884.502, the company assuming the policy under the agreement must assume the exact obligations of the policy.
(b)  If a policy is non-cancellable or guaranteed renewable, the assuming company may include in the assumption certificate a premium redetermination clause instead of the clause required by Section 884.352.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.504. Direct Reinsurance of Certain Policies

Sec. 884.504.  DIRECT REINSURANCE OF CERTAIN POLICIES.  (a)  A reinsurance agreement authorized by Section 884.502 for the direct reinsurance of life insurance policies or a combination of life and accident or health insurance policies must contain provisions that comply with this section.
(b)  If the legal reserve life insurance company is the reinsurer and issues an assumption certificate providing whole life coverage for the life benefit, the policyholder is not entitled to receive the policyholder's individual reserve in cash by surrendering the assumption certificate.
(c)  If the reserves and premium under the stipulated premium policy are inadequate to provide whole life coverage under the legal reserve assumption certificate and a term coverage assumption is made available, each affected policyholder must be allowed to select:
(1)  payment in cash of the amount of the individual reserve, reduced by the deficiency reserve, if any, to the policyholder on surrender of the policy;
(2)  an assumption certificate of another stipulated premium company engaging in the business of insurance under this chapter;  or
(3)  the legal reserve life insurance company's assumption certificate for term coverage that is renewable for the life of the insured without evidence of insurability and the rate for which is based on the legal reserve table selected by the assuming company at the attained age of the insured on the date of the renewal increased by an appropriate expense factor.
(d)  To exercise the option described by Subsection (c)(1) the policyholder must request that option not later than the 60th day after the date that the notice of the options available to the policyholder is mailed.  A policyholder is entitled to exercise the option under Subsection (c)(2) or (3) not later than the 60th day after the date the assumption certificate of the legal reserve life insurance company is mailed to the policyholder.
(e)  If the legal reserve life insurance company makes term coverage available, the company shall use each policyholder's individual reserve, less the amount of the deficiency, if any, as:
(1)  a reserve credit to permit the legal reserve assumption certificate to be backdated to the earliest date the reserve credit allows;  or
(2)  an annuity to reduce the required premium during the initial period of the term coverage.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.505. Effect of Total Direct Reinsurance Agreement

Sec. 884.505.  EFFECT OF TOTAL DIRECT REINSURANCE AGREEMENT.  (a)  A stipulated premium company that enters into a total direct reinsurance agreement under Section 884.501 or 884.502 under which it is the ceding company shall promptly surrender its certificate of authority to the department.
(b)  The stipulated premium company's shareholders and board of directors shall effect the company's dissolution.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter K. Direct Reinsurance Agreements › Section 884.506. Assumption Certificate

Sec. 884.506.  ASSUMPTION CERTIFICATE.  The company assuming a policy under a partial direct reinsurance agreement shall issue to the holder of the assumed policy an assumption certificate to be attached to the policy.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.551. Definitions

Sec. 884.551.  DEFINITIONS.  In this subchapter:
(1)  "Mutual assessment company" means any entity regulated under Chapter 887 or 888.
(2)  "Net assets" means a company's funds that are available for the payment of the company's obligations in this state, including uncollected premiums that are not more than three months past due, after the deduction of all unpaid losses and claims, claims for losses, and all other debts.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.552. Authority to Contract

Sec. 884.552.  AUTHORITY TO CONTRACT.  A mutual assessment company may enter into a direct reinsurance agreement with a stipulated premium company in accordance with this subchapter.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.553. Reinsurance Agreement

Sec. 884.553.  REINSURANCE AGREEMENT.  (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.
(d)  For purposes of computing the reserves of members of a mutual assessment company, the total net assets of the company shall be apportioned among the members assessed.  The percentage of the total amount of the net assets allotted to a member is computed by dividing the amount of the required reserve for that member insured under the reinsurance agreement by the total amount of the required reserve for all members under the agreement.
(e)  The reinsurance agreement must provide that each policyholder who is dissatisfied with the agreement and who does not want to accept the assumption certificate offered by the stipulated premium company is entitled to receive the amount of the reserve under the policyholder's policy reduced by the amount of any deficiency reserve applicable to the policy.  The policyholder must make a written request for that option to the stipulated premium company not later than the 60th day after the date the assumption certificate is mailed.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.554. Approval by Department

Sec. 884.554.  APPROVAL BY DEPARTMENT.  (a)  A mutual assessment company's board of directors may determine by a majority vote to submit a proposed direct reinsurance agreement to the members of the company.  Before the agreement may be submitted to the members, the board must prepare detailed plans for the reinsurance and must submit the agreement to the department.
(b)  If the department determines that the proposed direct reinsurance agreement complies with this chapter, the department shall approve the agreement for submission to the members of the company.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.555. Members Meeting; Notice

Sec. 884.555.  MEMBERS MEETING;  NOTICE.  (a)  After the department approves a proposed direct reinsurance agreement, the board of directors of the mutual assessment company shall:
(1)  call a meeting of the company's members in accordance with the company's bylaws for voting on ratification of the direct reinsurance agreement;  and
(2)  mail to each member:
(A)  a copy of the proposed agreement;  and
(B)  a copy of the notice of the meeting.
(b)  The meeting may not be held before the 16th day after the date on which the copies are mailed under Subsection (a)(2).
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.556. Members Meeting; Procedures

Sec. 884.556.  MEMBERS MEETING;  PROCEDURES.  (a)  In a meeting called under Section 884.555, a member may vote in person, by proxy to whomever the member designates, or by mail.
(b)  All votes must be cast by ballot.  A two-thirds vote of the members participating in the election is required to ratify the reinsurance agreement.
(c)  The person presiding at the meeting shall supervise and direct the procedure of the meeting and shall appoint an adequate number of inspectors to conduct the voting at the meeting.
(d)  The inspectors may determine all questions concerning the qualifications of the voters and the verification, canvassing, and validity of the ballots.
(e)  At the conclusion of the meeting, the inspectors shall certify under oath the result of the election to the department and to the stipulated premium company that is a party to the proposed agreement.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
2023 Texas Statutes › Insurance Code › Title 6 - Organization of Insurers and Related Entities › Subtitle E - Mutual and Fraternal Companies and Related Entities › Chapter 884 - Stipulated Premium Insurance Companies › Subchapter L. Direct Reinsurance Agreements With Mutual Assessment Companies › Section 884.557. Submission of Meeting Facts to Department

Sec. 884.557.  SUBMISSION OF MEETING FACTS TO DEPARTMENT.  Not later than the 90th day after the date of the meeting of the members, all facts relating to the meeting, including the accounting of the meeting and the computation of the required reserves, shall be submitted under oath to the department.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.