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RULE §7.615Credit for Reinsurance--Reciprocal Jurisdictions

  (1) If an NAIC accredited jurisdiction has determined that an assuming insurer meets the conditions in subsection (c) of this section, the Commissioner may defer to that jurisdiction's determination, and add the assuming insurer to the Commissioner's list of assuming insurers. The Commissioner may accept financial documentation filed with another NAIC accredited jurisdiction or the NAIC to satisfy the requirements of subsection (c) of this section.

  (2) When an assuming insurer requests that the Commissioner defer to another NAIC accredited jurisdiction's determination, the assuming insurer must submit a properly executed Form RJ-1 adopted by reference in §7.614 of this title and any additional information the Commissioner requires. If TDI receives a request, TDI will notify other states through the NAIC committee process and provide relevant information about the Commissioner's eligibility determination.

(f) If the Commissioner determines that an assuming insurer no longer meets any requirement under this section, the Commissioner may revoke or suspend the eligibility of the assuming insurer from the Commissioner's list of eligible assuming insurers.

  (1) While an assuming insurer's eligibility is suspended, the assuming reinsurer's reinsurance agreements issued, amended, or renewed after the effective date of the suspension do not qualify for credit except to the extent that the assuming insurer's obligations under the agreements are secured in accordance with Insurance Code §493.104 and §7.608(b) of this title (relating to Insurance Ceded to Assuming Insurers not Authorized in Texas, or Accredited, Trusteed, or Certified under this Subchapter), §7.610 of this title (relating to Letter of Credit Requirements), and §7.611 of this title (relating to Indemnity Reinsurance Agreements--Required Provisions).

  (2) If an assuming insurer's eligibility is revoked, no credit for the assuming reinsurer's reinsurance, including reinsurance agreements entered into before the date of revocation, may be granted after the effective date of the revocation except to the extent that the assuming insurer's obligations under the agreements are secured in a form acceptable to the Commissioner and consistent with Insurance Code §493.104 and §§7.608(b), 7.610, and 7.611 of this title.

(g) Before denying statement credit, imposing a requirement to post security under subsection (f) of this section, or adopting any similar requirement that has substantially the same regulatory impact as security, the Commissioner shall:

  (1) communicate with the ceding insurer, the assuming insurer, and the assuming insurer's supervisory authority that the assuming insurer no longer satisfies one of the conditions in subsection (c) of this section;

  (2) allow the assuming insurer 30 days after the initial communication under paragraph (1) of this subsection to submit a plan to remedy the defect, and 90 days after that communication to remedy the defect, except in exceptional circumstances in which a shorter period is necessary for policyholder and other consumer protection;

  (3) after the expiration of the 90-day period or, if applicable, the shorter period for exceptional circumstances described by paragraph (2) of this subsection, if the Commissioner determines that the assuming insurer took no or insufficient action to remedy the defect, the Commissioner may impose any requirement in this subsection; and

  (4) provide a written explanation to the assuming insurer of any requirement in this subsection.

(h) If a ceding insurer is subject to a legal process of rehabilitation, liquidation, or conservation, the ceding insurer or its representative may seek and, if determined appropriate by the court in which the proceedings are pending, obtain an order requiring that the assuming insurer post security for all outstanding liabilities.

Source Note: The provisions of this §7.615 adopted to be effective January 1, 2022, 46 TexReg 8069

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