Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 7 - CORPORATE AND FINANCIAL REGULATION › Subchapter F - REINSURANCE › Section 7.611 - Indemnity Reinsurance Agreements-Required Provisions

Current through Reg. 49, No. 28; July 12, 2024
Credit will not be granted to a ceding insurer for
					 reinsurance effected with assuming insurers meeting the requirements of
					 Insurance Code Chapter 493 or otherwise in compliance with this subchapter
					 unless the reinsurance agreement:
(1)
				  includes a proper insolvency clause pursuant to Insurance Code §
										493.106;
(2) includes a provision that the assuming
				  insurer, if not authorized to transact insurance or reinsurance in this state,
				  has submitted to a court of jurisdiction within the United States, has agreed
				  to comply with all requirements necessary to give such court jurisdiction, has
				  designated an agent on whom service of process may be effected, and has agreed
				  to abide by the final decision of such court or an appellate court to which
				  such court's decision is appealed;
(3) includes a provision for a periodic
				  accounting and cash settlement at quarterly intervals or more frequently as
				  required by the reinsurance agreement, or quarterly accrual for annual
				  settlements for those agreements that are not susceptible to other than annual
				  payments, such periodic accounting and cash settlement to be unconditional on
				  the performance of any other agreement or person;
(4) provides that the operation of any
				  offsetting provisions must be to limit offset to reinsurance agreements between
				  the ceding insurer and the assuming insurer;
(5) includes an effective date on which the
				  inception of the assuming insurer's liabilities commence;
(6) includes a termination date or
				  description of duration;
(7)
				  provides for a final accounting and settlement; and
(8) provides that if payments are made to a
				  reinsurance intermediary, then the assuming insurer assumes all credit risk of
				  the reinsurance intermediary related to payments made to the reinsurance
				  intermediary. The following will be deemed acceptable for evidencing compliance
				  with this subsection: payments by the ceding insurer to the intermediary must
				  be deemed to constitute payments to the assuming insurer and that payments by
				  the assuming insurer to the intermediary must be deemed to constitute payment
				  to the ceding insurer only to the extent that such payments are actually
				  received by the ceding insurer;
(9)
				  includes a provision indicating that the written agreement must constitute the
				  entire agreement between the parties with respect to the business being
				  reinsured thereunder and that there are no understandings between the parties
				  other than as expressed in the agreement;
(10) includes a provision whereby any change
				  or modification to the agreement be made by amendment to the agreement and
				  signed by the parties, except that facultative certificates duly executed by a
				  property and casualty reinsurer or its duly appointed agent are excluded from
				  this requirement; and
(11) complies
				  with any other Texas Department of Insurance rules in effect.