TDI tracks insurance companies’ finances to make sure they can pay claims

When you file an insurance claim, you’re counting on your insurance company having enough money to pay that claim.

TDI’s Financial Regulation Division works to make sure that happens for consumers.

Part of what TDI does as the state's insurance regulator is monitoring the financial health of insurance companies. This includes tracking how much insurance companies collect in premiums and spend on claims and other expenses.

TDI requires auto, home, health and all other insurance companies to provide these details in quarterly and annual reports. The agency's financial analysts then comb through those details.

"We go into financial statements, assets, liabilities, income, cash flow, and copious amounts of notes," said Jamie Walker, who leads the division.

TDI monitors about 500 Texas-based companies. Another 3,000 companies that sell insurance in Texas are monitored by their home states.

TDI makes sure companies comply with state laws and fulfill the terms of their policies.

Every five years, TDI's examiners conduct detailed financial exams of each Texas-based company. They talk to company executives and personnel, including actuaries, about their business practices, financial reporting, and new risks on the horizon.

Insurance companies manage risk to make sure they can pay current and future claims. A homeowners insurance company, for example, might only sell a certain number of policies in each area of the state so that if a weather event happens, they have a manageable amount of exposure.

Walker said: "We look at how the company is assessing risk and then determine if they have the financial capacity for unexpected losses, whether that be a major natural event or a significant and extended downturn in the investment market.”

This results in the Financial Regulation Division making sure insurance companies have enough assets to pay their claims and treat consumers as required by state laws and rules.

Learn more

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