Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 7 - CORPORATE AND FINANCIAL REGULATION › Subchapter F - REINSURANCE › Section 7.622 - Certification and Rating

Current through Reg. 49, No. 28; July 12, 2024
(a) Certification.
(1) A certification issued under this section
				  is valid for the following calendar year. To continue the certification, the
				  certified assuming insurer must reapply on or before July 1 of the year that
				  the certification expires.
(2)
				  Following receipt of a certification application, TDI will post on the TDI
				  website notice of the application and instructions on how the public may
				  respond to or comment on the application. The notice will remain posted on the
				  website for at least 30 days before the Commissioner will take final action on
				  the application.
(3) TDI will
				  provide written notice to an assuming insurer stating whether the assuming
				  insurer's application to be a certified assuming insurer has been approved. If
				  the application is approved, the notice will include the certified insurer's
				  assigned rating. TDI will publish on the TDI website a list of all certified
				  assuming insurers and their assigned ratings.
(4) To be eligible for certification, the
				  assuming insurer must:
(A) be domiciled and
				  authorized to transact the business of insurance or reinsurance in a qualified
				  jurisdiction, as determined under Insurance Code §
												493.1035
				  and §7.624 of this
				  subchapter;
(B) maintain capital
				  and surplus, or its equivalent, of no less than $250 million calculated in
				  accordance with subsection (b) of this section. An association including
				  incorporated and individual unincorporated underwriters may satisfy the
				  requirement by having minimum capital and surplus equivalents, net of
				  liabilities, of at least $250 million and a joint central fund containing a
				  balance of at least $250 million;
(C) maintain financial strength ratings from
				  two or more NRSROs that the Commissioner has determined to be acceptable. The
				  NRSRO must base its financial strength rating on interactive communication
				  between the NRSRO and the assuming insurer and must not be based solely on
				  publicly available information. The financial strength ratings will be a factor
				  used by the Commissioner in determining the rating that the Commissioner
				  assigns to the assuming insurer. Acceptable NRSROs include the following:
(i) A.M. Best Rating Services, Inc.
				  (Best);
(ii) Fitch Ratings, Inc.
				  (Fitch);
(iii) Kroll Bond Rating
				  Agency, Inc. (Kroll);
(iv) Moody's
				  Investors Service, Inc. (Moody's);
(v) S&P Global Ratings; (S&P)
				  and
(vi) any other NRSRO that the
				  Commissioner determines to be acceptable under §
													7.627 of this
				  title;
(D) agree to post
				  100 percent security for the benefit of the ceding insurer, or its estate, on
				  the entry of an order of rehabilitation, liquidation, or conservation, against
				  the ceding insurer;
(E) meet, or
				  agree to, the requirements in Insurance Code §
												493.1033
				  and Form CR-1; and
(F) provide
				  additional information necessary to demonstrate the creditworthiness of the
				  assuming insurer.