reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.156. Distributions, Reinsurance, and Merger

Sec. 425.156.  DISTRIBUTIONS, REINSURANCE, AND MERGER.  (a)  This subchapter does not prohibit an insurance company from acquiring additional obligations, securities, or other assets received as a dividend or as a distribution of assets.
(b)  This subchapter does not apply to securities, obligations, or other assets accepted incident to the workout, adjustment, restructuring, or similar realization of any kind of previously authorized investment or transaction if the insurance company's board of directors or a committee appointed by the board of directors determines that acceptance of the securities, obligations, or other assets is in the company's best interests.
(c)  This subchapter does not apply to assets acquired under a lawful agreement of bulk reinsurance, merger, or consolidation if the assets were legal and authorized investments for the ceding, merged, or consolidated insurance company.
(d)  An obligation, security, or other asset acquired as permitted by this section is not required to be qualified under any other section of this subchapter.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.157. Aggregate Diversification Requirements

Sec. 425.157.  AGGREGATE DIVERSIFICATION REQUIREMENTS.  (a)  This section takes precedence over Sections 425.109-425.120, 425.122-425.153, and 425.155(a), (b), and (c).
(b)  An insurance company's investments in all or any types of securities, loans, obligations, or evidences of indebtedness of a single issuer or borrower, including the issuer's or borrower's majority-owned subsidiaries or parent and the majority-owned subsidiaries of the issuer's or borrower's parent, may not, in the aggregate, exceed five percent of the company's assets.  This subsection does not apply to:
(1)  authorized investments that:
(A)  are direct obligations of, or are guaranteed by the full faith and credit of, the United States, this state, or a political subdivision of this state; or
(B)  are insured by an agency of the United States or this state; or
(2)  an investment provided for by Section 425.112 or 425.113.
(c)  Except as otherwise provided by this subsection, an insurance company's aggregate investment in real property under Sections 425.119, 425.120, 425.152, and 425.153 may not exceed 33-1/3 percent of the company's assets.  If a company acquires real property under Section 425.119(g) and that acquisition causes the company's aggregate real estate investment to exceed the limitation imposed by this subsection, the company shall, on or before the 10th anniversary of the date the real property is acquired, dispose of a sufficient amount of real property to comply with the applicable limitation.  A company that does not dispose of excess real property as required by this subsection  may not admit as an asset the value of the real property that exceeds the applicable limitation.
(d)  If an insurance company's real property acquisitions exceed the limitation imposed by Subsection (c), the company may not acquire additional real property under Section 425.119(b) or (c) or 425.120, 425.152, or 425.153 until the company disposes of the excess real property as specified by Subsection (c).
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.158. Waiver by Commissioner of Quantitative Limitations

Sec. 425.158.  WAIVER BY COMMISSIONER OF QUANTITATIVE LIMITATIONS.  (a)  The commissioner may waive a quantitative limitation on any investment authorized by Sections 425.109-425.132 and 425.151-425.156 if:
(1)  the insurer seeks the waiver before making the investment;
(2)  a hearing is held to determine whether the waiver should be granted;
(3)  the applicant seeking the waiver establishes that unreasonable or unnecessary loss or harm will result to the company if the commissioner denies the waiver;
(4)  the excess investment will not have a material adverse effect on the company; and
(5)  the size of the investment is reasonable in relation to the company's assets, capital, surplus, and liabilities.
(b)  The commissioner's waiver must be in writing and may treat the resulting excess investment as a nonadmitted asset.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.159. Accounting Provisions

Sec. 425.159.  ACCOUNTING PROVISIONS.  (a)  Each insurance company shall maintain reasonable, adequate, and accurate evidence of the company's ownership of the company's assets and investments.
(b)  An insurance company shall evidence the company's ownership of governmental or corporate securities as provided by Sections 423.101, 423.102, 423.104(a), 423.105, 423.106, 423.107, and 423.108.
(c)  An insurance company shall hold investments, other than investments made as a participation in a partnership or joint venture, only in the company's own name or as otherwise provided by Chapter 423.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.160. Investments of Ceding Insurers

Sec. 425.160.  INVESTMENTS OF CEDING INSURERS.  (a)  Subject to this section, if a domestic insurance company assumes and reinsures the business of and takes over the assets of another domestic insurance company or a foreign company, all assets or investments of the ceding company that were authorized as proper assets or investments for the funds of that company and taken over by the assuming company are considered valid assets or investments of the assuming company under the laws of this state.
(b)  The commissioner must approve assets or investments described by Subsection (a) and the terms on which those assets or investments are taken over.  The commissioner may require the assuming insurance company to reasonably dispose of any of those assets or investments that do not otherwise meet the requirements of this subchapter within a period that will minimize any financial loss or other hardship caused by disposing of the asset or investment.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.161. Acting as Real Estate Broker or Salesperson Prohibited

Sec. 425.161.  ACTING AS REAL ESTATE BROKER OR SALESPERSON PROHIBITED.  A domestic insurance company or another insurance company specifically made subject to this subchapter may not engage in the business of a broker or salesperson as defined by Chapter 1101, Occupations Code, except that the company may hold, improve, maintain, manage, rent, lease, sell, exchange, or convey any of the real property interests owned as investments under Sections 425.109-425.132 and 425.151-425.153.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter C. Authorized Investments and Transactions for Capital Stock Life, Health, and Accident Insurers › Section 425.162. Rules

Sec. 425.162.  RULES.  The commissioner may adopt rules, minimum standards, or limitations that are fair and reasonable as appropriate to supplement and implement this subchapter.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.201. Definition

Sec. 425.201.  DEFINITION.  In this subchapter, "contingency funds" means an insurer's contingency funds over and above the amount of the insurer's policy reserves.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.202. Applicability of Subchapter

Sec. 425.202.  APPLICABILITY OF SUBCHAPTER.  This subchapter applies only to an insurer organized under Chapter 881, 884, 885, 886, 887, or 2551, except as specifically provided by those chapters.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.203. Limitation on Funds and Other Assets

Sec. 425.203.  LIMITATION ON FUNDS AND OTHER ASSETS.  (a)  An insurer may not use the insurer's funds to make an investment or loan that is not authorized by this subchapter.
(b)  An insurer may not secure, hold, or convey real property except as authorized by this subchapter.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.204. Approval of Investments and Loans Required

Sec. 425.204.  APPROVAL OF INVESTMENTS AND LOANS REQUIRED.  (a)  An insurer may not make an investment unless the investment has been authorized by the insurer's board of directors or by a committee responsible for supervising investments.
(b)  An insurer may not make a loan other than a policy loan unless the loan has been authorized by the insurer's board of directors or by a committee responsible for supervising loans.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.2061. Authorized Investments for All Funds: Bond Exchange-Traded Funds

Sec. 425.2061.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: BOND EXCHANGE-TRADED FUNDS.  Subject to Section 425.157(b), an insurer may invest any of the insurer's funds and accumulations in a bond exchange-traded fund described by Section 425.1231(a).
Added by Acts 2019, 86th Leg., R.S., Ch. 1132 (H.B. 2694), Sec. 3, eff. September 1, 2019.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.207. Authorized Investments for All Funds: Shares of Savings and Loan Associations

Sec. 425.207.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: SHARES OF SAVINGS AND LOAN ASSOCIATIONS.  (a)  Subject to this section, an insurer may invest any of the insurer's funds and accumulations in a share, stock, share or savings account, or investment certificate of a savings and loan association engaged in business in this state that is qualified to participate in insurance issued by the Federal Deposit Insurance Corporation.
(b)  An insurer's investment in a savings and loan association may not exceed 20 percent of the savings and loan association's total assets.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.208. Authorized Investments for All Funds: Bank and Bank Holding Company Stocks

Sec. 425.208.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: BANK AND BANK HOLDING COMPANY STOCKS.  (a)  Subject to this section, an insurer may invest any of the insurer's funds and accumulations in:
(1)  the stock of a state or national bank that is a member of the Federal Deposit Insurance Corporation; and
(2)  the stock of a bank holding company as defined by the Bank Holding Company Act of 1956 (12 U.S.C. Section 1841 et seq.), as amended by the Bank Holding Company Act Amendments of 1970 (12 U.S.C. Section 1841 et seq. and Section 1971 et seq.).
(b)  An insurer's investment in the stock of a bank or bank holding company may not exceed:
(1)  20 percent of the total outstanding shares of the stock of the bank or bank holding company; or
(2)  10 percent of the insurer's admitted assets.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.209. Authorized Investments for All Funds: Debentures of Public Utility Corporations

Sec. 425.209.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: DEBENTURES OF PUBLIC UTILITY CORPORATIONS.  (a)  Subject to this section, an insurer may invest any of the insurer's funds and accumulations in:
(1)  a debenture of a solvent public utility corporation that:
(A)  has not defaulted in the payment of any debt during the five years preceding the investment; and
(B)  has not failed in any one of the five years preceding the investment to have earned, after taxes, including income taxes, and after deducting proper charges for replacements, depreciation, and obsolescence, an amount applicable to interest on the corporation's outstanding indebtedness equal to at least two times the amount of interest due for that year, or, in the case of issuance of new debentures, the earnings applicable to interest are equal to at least two times the amount of annual interest on the corporation's obligations after giving effect to the new financing; or
(2)  a debenture of a solvent public utility corporation that has not been in existence for the five years preceding the investment, if:
(A)  the corporation has succeeded to the business and assets and has assumed the liabilities of another public utility corporation;
(B)  neither the successor corporation or the corporation succeeded has defaulted in the payment of any debt during the five years preceding the investment; and
(C)  neither the successor corporation or the corporation succeeded have failed in any one of the five years preceding the investment to have earned, after taxes, including income taxes, and after deducting proper charges for replacements, depreciation, and obsolescence, an amount applicable to interest on the corporation's outstanding indebtedness equal to at least two times the amount of interest due for that year, or in the case of issuance of new debentures, the earnings applicable to interest are equal to at least two times the amount of annual interest on the corporation's obligations after giving effect to the new financing.
(b)  The amount of an insurer's investment in debentures under this section may not exceed five percent of the insurer's admitted assets.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.210. Authorized Investments for All Funds: Preferred Stock of Public Utility Corporations

Sec. 425.210.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: PREFERRED STOCK OF PUBLIC UTILITY CORPORATIONS.  (a)  Subject to this section, an insurer may invest any of the insurer's funds and accumulations in:
(1)  preferred stock of a solvent public utility corporation, the bonds and debentures of which are authorized investments for the insurer, and that:
(A)  has not defaulted in the payment of any debt during the five years preceding the investment; and
(B)  has not failed in any one of the five years preceding the investment to have earned an amount applicable to the dividends on the preferred stock equal to at least three times the amount of dividends due in that year, or, in the case of issuance of new preferred stock, the earnings applicable to dividends are equal to at least three times the amount of the annual dividend requirements after giving effect to the new financing; or
(2)  a solvent public utility corporation, the bonds and debentures of which are authorized investments for the insurer, and that has not been in existence for the five years preceding the investment, if:
(A)  the corporation has succeeded to the business and assets and has assumed the liabilities of another public utility corporation;
(B)  neither the successor corporation or the corporation succeeded has defaulted in the payment of any debt during the five years preceding the investment; and
(C)  neither the successor corporation or the corporation succeeded have failed in any one of the five years preceding the investment to have earned an amount applicable to the dividends on the preferred stock equal to at least three times the amount of dividends due in that year, or, in the case of issuance of new preferred stock, the earnings applicable to dividends are equal to at least three times the amount of the annual dividend requirements after giving effect to the new financing.
(b)  Preferred stock purchased under this section must be of an issue entitled to first claim on the net earnings of the public utility corporation, after deducting the amount necessary to service any outstanding bonds and debentures.
(c)  The amount of an insurer's investment in preferred stock under this section may not exceed 2-1/2 percent of the insurer's admitted assets.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.211. Authorized Investments for All Funds: Bonds Issued, Assumed, or Guaranteed in International Market

Sec. 425.211.  AUTHORIZED INVESTMENTS FOR ALL FUNDS:  BONDS ISSUED, ASSUMED, OR GUARANTEED IN INTERNATIONAL MARKET.  An insurer may invest any of the insurer's funds and accumulations in bonds issued, assumed, or guaranteed by:
(1)  the Inter-American Development Bank;
(2)  the International Bank for Reconstruction and Development (the World Bank);
(3)  the African Development Bank;
(4)  the Asian Development Bank;
(5)  the International Finance Corporation; and
(6)  the State of Israel.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.212. Authorized Investments for All Funds: Securities or Investments Authorized or Described by Specific Statutory Provision

Sec. 425.212.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: SECURITIES OR INVESTMENTS AUTHORIZED OR DESCRIBED BY SPECIFIC STATUTORY PROVISION.  An insurer may invest any of the insurer's funds and accumulations in a security or investment authorized or described by:
(1)  Section 65.013, Finance Code;
(2)  Sections 435.041-435.047, Government Code;
(3)  Subchapter B, Chapter 1505, Government Code;
(4)  Chapter 284, Transportation Code;
(5)  Section 51.039 or 60.104, Water Code;
(6)  Chapter 160, General Laws, Acts of the 43rd Legislature, Regular Session, 1933 (Article 842a, Vernon's Texas Civil Statutes);
(7)  Chapter 230, Acts of the 49th Legislature, Regular Session, 1945 (Article 842a-1, Vernon's Texas Civil Statutes);
(8)  Chapter 110, Acts of the 51st Legislature, Regular Session, 1949 (Article 8280-133, Vernon's Texas Civil Statutes);
(9)  Chapter 340, Acts of the 51st Legislature, Regular Session, 1949 (Article 8280-137, Vernon's Texas Civil Statutes);
(10)  Chapter 398, Acts of the 51st Legislature, Regular Session, 1949 (Article 8280-138, Vernon's Texas Civil Statutes); or
(11)  Chapter 465, Acts of the 51st Legislature, Regular Session, 1949 (Article 8280-139, Vernon's Texas Civil Statutes).
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.213. Authorized Investments for All Funds: Other Securities Specifically Authorized by Law

Sec. 425.213.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: OTHER SECURITIES SPECIFICALLY AUTHORIZED BY LAW.  An insurer may invest any of the insurer's funds and accumulations in:
(1)  an adequately secured equipment trust obligation or certificate or another adequately secured instrument evidencing:
(A)  an interest in transportation equipment that is located wholly or partly within the United States; and
(B)  a right to receive determined portions of rental, purchase, or other fixed obligatory payments for the use or purchase of the transportation equipment; and
(2)  any other security as specifically authorized by law.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.215. Authorized Investments for All Funds: Loans Secured by Certain Collateral Secured by Real Property

Sec. 425.215.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: LOANS SECURED BY CERTAIN COLLATERAL SECURED BY REAL PROPERTY.  An insurer may loan any of the insurer's funds and accumulations and take as collateral an obligation secured by a first lien on real property or a leasehold estate that is eligible to secure a loan under Section 425.214.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.216. Authorized Investments for All Funds: Policy Loans

Sec. 425.216.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: POLICY LOANS.  (a)  Subject to Subsection (b), an insurer may loan any of the insurer's funds and accumulations and take as collateral an insurance policy issued by the insurer.
(b)  A loan on a policy under this section may not exceed the reserve value of the policy.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.217. Authorized Investments for All Funds: Loans Secured by Certain Securities

Sec. 425.217.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: LOANS SECURED BY CERTAIN SECURITIES.  An insurer may loan any of the insurer's funds and accumulations and take as collateral for the loan any security described by Sections 425.205-425.213 and 425.218 in which the insurer may invest any of the insurer's funds and accumulations.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.218. Authorized Investments for All Funds: Securities Not Otherwise Specified

Sec. 425.218.  AUTHORIZED INVESTMENTS FOR ALL FUNDS: SECURITIES NOT OTHERWISE SPECIFIED.  (a)  Notwithstanding any express or implied prohibitions, and subject to this section, an insurer may invest any of the insurer's funds and accumulations in an investment that does not otherwise qualify under any other provision of this chapter.
(b)  The amount of any one investment by an insurer under this section may not exceed one percent of the insurer's admitted assets.
(c)  The aggregate amount of investments by an insurer under this section may not exceed the lesser of:
(1)  five percent of the insurer's admitted assets; or
(2)  the amount of the insurer's capital and surplus in excess of $200,000 as shown on the last annual statement filed by the insurer with the department before the date the investment is acquired.
(d)  Except as provided by another law of this state, this section does not authorize an insurer to invest any of the insurer's funds or accumulations in real property.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.219. Authorized Investments for Policy Reserves and Surplus: Bonds of Certain Water Control and Improvement Districts

Sec. 425.219.  AUTHORIZED INVESTMENTS FOR POLICY RESERVES AND SURPLUS:  BONDS OF CERTAIN WATER CONTROL AND IMPROVEMENT DISTRICTS.  An insurer may invest the insurer's policy reserves and surplus over and above the insurer's capital in municipal bonds issued under Section 51.039, Water Code.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.220. Authorized Investments for Capital, Surplus, and Contingency Funds: Capital Stock, Bonds, and Other Corporate Obligations

Sec. 425.220.  AUTHORIZED INVESTMENTS FOR CAPITAL, SURPLUS, AND CONTINGENCY FUNDS:  CAPITAL STOCK, BONDS, AND OTHER CORPORATE OBLIGATIONS.  (a)  Subject to this section and Section 425.226, an insurer may invest the insurer's capital, surplus, and contingency funds in the capital stock, bonds, bills of exchange, or other commercial notes or bills and securities of:
(1)  a solvent corporation that has not defaulted in the payment of any debt during the five years preceding the investment; or
(2)  a solvent corporation that has not been in existence for the five years preceding the investment, if:
(A)  the corporation has succeeded to the business and assets and has assumed the liabilities of another corporation; and
(B)  neither the successor corporation nor the corporation succeeded has defaulted in the payment of any debt during the five years preceding the investment.
(b)  An insurer may not invest in the stock of:
(1)  a manufacturing corporation with a net worth of less than $25,000; or
(2)  an oil corporation with a net worth of less than $500,000.
(c)  Except as provided by Subsection (d), an insurer's investment in the insurer's own capital stock or in the stock of a single corporation may not be in an amount exceeding 10 percent of the amount of the insurer's capital, surplus, and contingency funds.
(d)  An insurer may own, and the insurer may invest not more than 25 percent of the insurer's capital, surplus, and contingency funds in, the capital stock of a single fire and casualty insurance company if that investment gives the insurer a majority of the outstanding stock of the fire and casualty insurance company.
(e)  In addition to the investments authorized by this section and subject to Section 425.226, an insurer may invest in the capital stock, bonds, and other obligations of one or more solvent corporations that portion of the insurer's surplus funds that exceeds the greater of:
(1)  10 percent of the insurer's admitted assets, as determined from the insurer's latest annual statement on file with the department; or
(2)  the minimum capital and surplus requirements for incorporating a life insurance company under Chapter 841.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.221. Authorized Investments for Capital, Surplus, and Contingency Funds: Bonds or Notes of Educational or Religious Corporations

Sec. 425.221.  AUTHORIZED INVESTMENTS FOR CAPITAL, SURPLUS, AND CONTINGENCY FUNDS:  BONDS OR NOTES OF EDUCATIONAL OR RELIGIOUS CORPORATIONS.  Subject to Section 425.226, an insurer may invest the insurer's capital, surplus, and contingency funds in a bond or note of an educational or religious corporation that has provided for the payment of a sufficient amount of the first weekly or monthly revenues of the corporation to an interest and sinking fund account in a bank or trust company as an independent paying agent.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.222. Authorized Investments for Capital, Surplus, and Contingency Funds: Life Income Interests in Qualified Trusts

Sec. 425.222.  AUTHORIZED INVESTMENTS FOR CAPITAL, SURPLUS, AND CONTINGENCY FUNDS:  LIFE INCOME INTERESTS IN QUALIFIED TRUSTS.  (a)  Subject to this section, an insurer may invest the insurer's capital, surplus, and contingency funds in a life income interest in a qualified irrevocable express testamentary trust.
(b)  For purposes of this section, a trust is a qualified trust if:
(1)  each fee simple recipient of any part of the corpus of the trust:
(A)  is a public charity, church, educational institution, or scientific institution;
(B)  is located in this state; and
(C)  is recognized by the United States Internal Revenue Service as exempt from payment of income taxes;
(2)  the corpus of the trust is wholly or partly composed of interests in real estate, stocks, bonds, debentures, and other securities of an aggregate total value of at least $5 million; and
(3)  the corpus of the trust produces annual income of at least $100,000.
(c)  An insurer's life income interest in a qualified trust may not exceed 10 percent of the insurer's admitted assets.
(d)  Before an insurer may acquire a life income interest in a qualified trust, the insurer must present evidence satisfactory to the commissioner that shows:
(1)  the interest is subject to transfer and is recognized as transferable;
(2)  the interest is capable of reasonable valuation;
(3)  a market for the sale of the interest exists; and
(4)  the interest is supported by life insurance in:
(A)  an amount not less than the admitted value of the interest; and
(B)  a form approved by the commissioner.
(e)  In valuing a life income interest in a qualified trust on the insurer's books, the insurer may value the interest only on the basis of the lesser of:
(1)  the recognized market established in accordance with Subsection (d)(3); or
(2)  the ratio that the fractional life income interest in the income of the trust bears to the total market value of the properties held by the trust that are of a type of property an insurer may lawfully acquire under the investment statutes of this state.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.223. Authorized Investments for Capital, Surplus, and Contingency Funds: Capital Stock of Reinsurer

Sec. 425.223.  AUTHORIZED INVESTMENTS FOR CAPITAL, SURPLUS, AND CONTINGENCY FUNDS:  CAPITAL STOCK OF REINSURER.  (a)  Subject to Subsection (b), an insurer may invest the insurer's capital, surplus, and contingency funds in not more than 20 percent of the capital stock of any other insurance company organized under Chapter 841 whose principal business is the reinsurance, either wholly or partly, of risks ceded to that insurer by other life insurance companies.
(b)  The aggregate amount of an insurer's investments under this section may not exceed 10 percent of the insurer's capital, surplus, and contingency funds.
(c)  The investment authorized by this section may be made by purchase of stock issued and outstanding or by subscription to and payment for the increase in the capital stock of the reinsurer.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.224. Authorized Investments for Capital, Surplus, and Contingency Funds: Loans Secured by Corporate Stock

Sec. 425.224.  AUTHORIZED INVESTMENTS FOR CAPITAL, SURPLUS, AND CONTINGENCY FUNDS:  LOANS SECURED BY CORPORATE STOCK.  (a)  Subject to this section, an insurer may loan the insurer's capital, surplus, and contingency funds and take as collateral the capital stock, bonds, bills of exchange, or other commercial notes or bills or the securities of:
(1)  a solvent corporation that has not defaulted in the payment of any debt during the five years preceding the investment; or
(2)  a solvent corporation that has not been in existence for the five years preceding the investment, if:
(A)  the corporation has succeeded to the business and assets and has assumed the liabilities of another corporation; and
(B)  neither the successor corporation nor the corporation succeeded has defaulted in the payment of any debt during the five years preceding the investment.
(b)  Subject to this section, an insurer may loan the insurer's capital, surplus, and contingency funds and take as collateral the bonds or notes of an educational or religious corporation that has provided for the payment of a sufficient amount of the first weekly or monthly revenues of the corporation to an interest and sinking fund account in a bank or trust company as an independent paying agent.
(c)  The market value of the stock, bills of exchange, other commercial notes or bills, or securities must be at all times during the continuance of the loan at least 50 percent more than the amount loaned on the securities or obligations.
(d)  An insurer may not take as collateral for any loan:
(1)  the insurer's capital stock;
(2)  the stock of a single corporation in an amount that exceeds 10 percent of the amount of the insurer's own capital, surplus, and contingency funds;
(3)  the stock of a manufacturing corporation with a net worth of less than $25,000;
(4)  the stock of an oil corporation with a net worth of less than $500,000; or
(5)  any stock, the holder or owner of which is or may become liable for any assessment other than taxes.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.225. Investment in Foreign Securities

Sec. 425.225.  INVESTMENT IN FOREIGN SECURITIES.  (a)  An insurer authorized to engage in business in a foreign country may invest in securities of that country that are the same kind of securities as those in the United States in which an insurer is authorized by this subchapter to invest.
(b)  The aggregate amount of an insurer's investments under this section may not exceed the amount of the insurer's reserves on the business in force in the foreign country.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.226. Investment in Stock Subject to Assessment Prohibited

Sec. 425.226.  INVESTMENT IN STOCK SUBJECT TO ASSESSMENT PROHIBITED.  An insurer may not invest any of the insurer's funds in a stock, the holder or owner of which is or may become liable for any assessment other than taxes.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.227. Certain Investment Powers Not a Restriction

Sec. 425.227.  CERTAIN INVESTMENT POWERS NOT A RESTRICTION.  The investment powers granted by Sections 425.207 and 425.208 may not be construed as restricting the powers granted by Sections 425.220 and 425.221.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.228. Investments of Ceding Insurer

Sec. 425.228.  INVESTMENTS OF CEDING INSURER.  (a)  Subject to this section, if a domestic insurer assumes the business and takes over the assets of another domestic or a foreign insurer, all investments of the ceding insurer that were authorized, when made, by the laws of the state in which the ceding insurer was organized as proper securities for investment of the funds of an insurer and that are taken over by the assuming insurer are  considered to be valid securities of the assuming insurer under the laws of this state.
(b)  The commissioner must approve investments described by Subsection (a) and the terms on which those investments are taken over.  The commissioner may require the assuming insurer to dispose of any of the investments on notice the commissioner considers reasonable.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.231. Authorized Investments: Real Property Acquired Under Certain Circumstances

Sec. 425.231.  AUTHORIZED INVESTMENTS: REAL PROPERTY ACQUIRED UNDER CERTAIN CIRCUMSTANCES.  (a)  Subject to this section, an insurer may secure, hold, and convey the following real property:
(1)  real property acquired in good faith as security for a loan previously contracted or for money due;
(2)  real property conveyed to the insurer to satisfy a debt previously contracted in the course of the insurer's dealings; and
(3)  real property purchased at a sale under a judgment, court decree, or mortgage or other lien held by the insurer.
(b)  An insurer shall sell and dispose of all property described by Subsection (a) that is not necessary for the insurer's accommodation in the convenient transaction of the insurer's business, other than an interest in minerals or royalties reserved on the sale of land acquired under Subsection (a)  or an interest in producing royalties or producing overriding royalties otherwise acquired, not later than the fifth anniversary of:
(1)  the date the insurer acquires title to the property; or
(2)  the date the property ceases to be necessary for the accommodation of the insurer's business.
(c)  An insurer may hold property acquired under Subsection (a) for a period longer than that specified by Subsection (b) if the insurer obtains a certificate from the commissioner stating that the insurer's interests will suffer materially by the forced sale of the property.  The commissioner shall state in the certificate the amount of time by which the period for sale is extended under this subsection.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 425 - Reserves and Investments for Life Insurance Companies and Related Entities › Subchapter D. Authorized Investments and Transactions for Other Life, Health, and Accident Insurers › Section 425.232. Authorized Investments: Improved Income-Producing Real Property

Sec. 425.232.  AUTHORIZED INVESTMENTS: IMPROVED INCOME-PRODUCING REAL PROPERTY.  (a)  In this section, "improved income-producing real property" includes all commercial and industrial real property, a substantial portion of which has been materially enhanced in value by the construction of durable, permanent-type buildings and other improvements costing an amount at least equal to the value of the real property, excluding the buildings and improvements, that is held or acquired by purchase, lease, or otherwise for the production of income.  The term does not include agricultural, horticultural, farm and ranch, or residential property, or single or multiunit family dwelling property.
(b)  Notwithstanding Sections 425.229, 425.230, and 425.231, subject to this section, a domestic insurer may:
(1)  invest any of the insurer's funds and accumulations in improved income-producing real property or any interest in improved income-producing real property; and
(2)  hold, improve, maintain, manage, lease, sell, or convey improved income-producing real property or an interest in improved income-producing real property.
(c)  The aggregate amount of an insurer's investments in all income-producing real property, including improvements, may not exceed 15 percent of the insurer's admitted assets.  The amount of an insurer's investment in a single piece of improved income-producing real property, including  improvements, may not exceed five percent of the insurer's admitted assets.  For purposes of this subsection, an insurer's admitted assets are determined from the insurer's annual statement as of the preceding December 31 and filed with the department as required by law.  Section 425.229(f) applies to the value of any investment made under this section.
(d)  The investment authority granted by this section is in addition to that granted by Sections 425.229, 425.230, and 425.231, except that an insurer may not make an investment in improved income-producing real property that, when added to the insurer's investments under Section 425.229, would exceed the limitations imposed by Section 425.229(e).
(e)  This section does not permit an insurer to purchase undeveloped real property for the purpose of development or subdivision.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 426 - Reserves for Workers' Compensation Insurance Companies › Section 426.001. Reserves Required

Sec. 426.001.  RESERVES REQUIRED.  A workers' compensation insurance company engaged in business in this state shall maintain reserves in an amount estimated in the aggregate to provide for the payment of all losses and claims incurred, whether reported or unreported.  The company may not maintain reserves in an amount that is greater than reasonably necessary for that purpose.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle B - Reserves and Investments › Chapter 426 - Reserves for Workers' Compensation Insurance Companies › Section 426.002. Computation of Reserves

Sec. 426.002.  COMPUTATION OF RESERVES.  Reserves required by Section 426.001 must be computed in accordance with any rules adopted by the commissioner to adequately protect insureds, secure the  solvency of the workers' compensation insurance company, and prevent unreasonably large reserves.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.