The Texas Department of Insurance (DoI) has amended its captive insurance regulation to implement the changes passed into law by the Texas legislature in 2015 and 2017.
The amendments, effective 7 December 2018, are necessary to implement changes made by HB 1944, passed into law in 2017, and SB 667, passed into law in 2015.
Additionally, HB 1944 enacted provisions allowing a captive insurance company to be formed as a captive exchange and authorising the secretary of state to form a captive insurance company prior to receiving DoI approval of the captive’s formation documents.
It also allows the commissioner to waive the actuarial opinion required with the annual report for a captive insurance company that has less than $1 million of net written premium or reinsurance assumed or has been in operation for less than six months, allows the DoI to approve distributions for policyholders of the captive insurance company, and provides a procedure for determining acceptable qualified jurisdictions and rating agencies for reinsurance transactions under Insurance Code section 964.052(f).
Also implemented by the amendments, SB 677 means the DoI can approve dividends and distributions to holders of equity interest in a captive insurance company.
Additionally, the amendment adopted by reference alterations to the annual report and altered the sections that reflect current department style guidelines.
