Texas Insurance Code - Section 493.104. Credit For Funds Securing Reinsurance Obligations
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§ 493.104. CREDIT FOR FUNDS SECURING REINSURANCE
OBLIGATIONS. (a) Subject to Subsection (b), any asset or deduction
from liability for reinsurance ceded to an assuming insurer that
does not meet the requirements of Section 493.102 shall be allowed
in an amount that does not exceed the liabilities carried by the
ceding insurer and in the amount of funds held by or on behalf of the
ceding insurer under a reinsurance contract with the assuming
insurer, including funds held in trust for the ceding insurer, as
security for the payment of obligations under the contract.
(b) The funds held as security:
(1) must be held in the United States subject to
withdrawal solely by and under the exclusive control of the ceding
insurer or, in the case of a trust, held in a qualified United
States financial institution that has been granted the authority to
operate with fiduciary powers; and
(2) may be in the form of:
(A) cash;
(B) securities that:
(i) are readily marketable over a national
exchange;
(ii) have a maturity date of not later than
one year;
(iii) are listed by the Securities
Valuation Office of the National Association of Insurance
Commissioners; and
(iv) qualify as admitted assets;
(C) subject to Section 493.105, a clean,
irrevocable, unconditional letter of credit, issued or confirmed by
a qualified United States financial institution that has been
determined by the commissioner or the Securities Valuation Office
of the National Association of Insurance Commissioners to meet the
standards of financial condition and standing that are considered
necessary and appropriate to regulate the quality of financial
institutions whose letters of credit will be acceptable to the
commissioner; or
(D) another form of security acceptable to the
commissioner.
Added by Acts 2005, 79th Leg., ch. 727, § 1, eff. April 1, 2007.
Section: 493.052 493.053 493.054 493.055 493.101 493.102 493.103 493.104 493.105 493.106 493.107 493.151 493.152 493.153 493.154
Last modified: August 10, 2007
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