This bulletin is to inform county mutual insurance companies of new RBC and other solvency requirements that must be met for these companies to remain in compliance with Texas law.
RBC Requirements for County Mutual Insurance Companies. The Commissioner of Insurance has adopted amendments to §7.402, of the Texas Administrative Code, Title 28, which expanded RBC regulations to include county mutual insurance companies. These requirements apply to all county mutual insurance companies unless they meet the express criteria contained in Texas Insurance Code §912.056(d) and (f), which are discussed below.
In part, §7.402 addresses RBC requirements effective for year-end 2010. New §7.402(e)(4) requires county mutual insurance companies to file electronic copies of their RBC reports for 2010 with the National Association of Insurance Commissioners on or before March 1, 2011, unless they meet the express criteria contained in Texas Insurance Code §912.056(d) and (f). Please refer to §7.402 for these requirements. A copy of §7.402 can be found at http://www.tdi.state.tx.us/rules/2010/documents/7-402-7-404.pdf.
Requirements for County Mutual Insurance Companies that Meet the Express Criteria Contained in Texas Insurance Code §912.056(d) and (f). County mutual insurance companies that meet the express criteria contained in Texas Insurance Code §912.056(d) and (f) are subject to increased policyholder surplus requirements as a result of House Bill 2449, which was adopted last session by the Texas Legislature. The express criteria include the requirement that a county mutual insurance company cede 85% or more of its direct and assumed risks to one or more non-affiliated reinsurers. For the criteria and the policyholder surplus requirements, please refer to §912.056(d) and (f), which can be found at https://statutes.capitol.texas.gov/Docs/IN/htm/IN.912.htm#912.056.
County mutual insurance companies that are subject to §912.056(f) may be required to increase their minimum policyholder surplus and/or take other action. The Commissioner has adopted a new rule, §7.403, that provides for a transition period to achieve compliance with §912.056(f). Please refer to §7.403 for these requirements. A copy of §7.403 can be found at http://www.tdi.state.tx.us/rules/2010/documents/7-402-7-404.pdf.
Questions regarding this bulletin may be directed to Kevin Brady, Deputy Commissioner, Financial Program, at 512-305-6788 or kevin.brady@tdi.state.tx.us.
Mike Geeslin
Commissioner of Insurance