Credit will not be granted to a ceding insurer for reinsurance
effected with assuming insurers meeting the requirements of Insurance
Code Chapter 493 or otherwise in compliance with this subchapter unless
the reinsurance agreement:
(1) includes a proper insolvency clause pursuant to
Insurance Code §493.106;
(2) includes a provision that the assuming insurer,
if not authorized to transact insurance or reinsurance in this state,
has submitted to a court of jurisdiction within the United States,
has agreed to comply with all requirements necessary to give such
court jurisdiction, has designated an agent on whom service of process
may be effected, and has agreed to abide by the final decision of
such court or an appellate court to which such court's decision is
appealed;
(3) includes a provision for a periodic accounting
and cash settlement at quarterly intervals or more frequently as required
by the reinsurance agreement, or quarterly accrual for annual settlements
for those agreements that are not susceptible to other than annual
payments, such periodic accounting and cash settlement to be unconditional
on the performance of any other agreement or person;
(4) provides that the operation of any offsetting provisions
must be to limit offset to reinsurance agreements between the ceding
insurer and the assuming insurer;
(5) includes an effective date on which the inception
of the assuming insurer's liabilities commence;
(6) includes a termination date or description of duration;
(7) provides for a final accounting and settlement;
and
(8) provides that if payments are made to a reinsurance
intermediary, then the assuming insurer assumes all credit risk of
the reinsurance intermediary related to payments made to the reinsurance
intermediary. The following will be deemed acceptable for evidencing
compliance with this subsection: payments by the ceding insurer to
the intermediary must be deemed to constitute payments to the assuming
insurer and that payments by the assuming insurer to the intermediary
must be deemed to constitute payment to the ceding insurer only to
the extent that such payments are actually received by the ceding
insurer;
(9) includes a provision indicating that the written
agreement must constitute the entire agreement between the parties
with respect to the business being reinsured thereunder and that there
are no understandings between the parties other than as expressed
in the agreement;
(10) includes a provision whereby any change or modification
to the agreement be made by amendment to the agreement and signed
by the parties, except that facultative certificates duly executed
by a property and casualty reinsurer or its duly appointed agent are
excluded from this requirement; and
(11) complies with any other Texas Department of Insurance
rules in effect.
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| Source Note: The provisions of this §7.611 adopted to be effective August 16, 1990, 15 TexReg 4435; amended to be effective June 30, 1995, 20 TexReg 4407; amended to be effective September 16, 1996, 21 TexReg 8508; amended to be effective June 19, 2018, 43 TexReg 3888 |
