Sec. 862.102. REINSURANCE OR RESERVES REQUIRED FOR FIRE INSURANCE. (a) An insurance company writing fire insurance in this state shall maintain reinsurance or unearned premium reserves on its policies in force.
(b) The commissioner may require that reserves required by Subsection (a) equal the unearned portions of the gross premiums in force after deducting reinsurance under Section 862.101, as computed on each respective risk from the policy's date of issue.
(c) If the commissioner does not impose a requirement under Subsection (b), the portions of the gross premium in force held as reinsurance or unearned premium reserves after deducting reinsurance under Section 862.101 shall be computed as follows:
Term for Which Policy Was WrittenReserve for Unearned Premium1 year or less1/22 years1st year 3/42nd year 1/43 years1st year 5/62nd year 1/23rd year 1/64 years1st year 7/82nd year 5/83rd year 3/84th year 1/85 years1st year 9/102nd year 7/103rd year 1/24th year 3/105th year 1/10More than 5 yearspro rata(d) Notwithstanding Subsection (c), an insurance company may compute, or the commissioner may require an insurance company to compute, the reserves on a quarterly, monthly, or more frequent pro rata basis.
(e) An insurance company that adopts a method for computing the reserve may not adopt another method without commissioner approval.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
Section: Previous 862.001 862.002 862.003 862.051 862.052 862.053 862.054 862.055 862.101 862.102 862.103 862.104 862.151 862.152 862.153 NextLast modified: September 28, 2016