The Texas Department of Insurance (DoI) has proposed amendments its captive insurance regulations in which would implement changes passed into law by the Texas legislature in 2015 and 2017.
The proposed amendments to captive insurance, under Insurance Code Chapter 964, are necessary to implement changes passed into law by the Texas legislature–HB 1944, passed into law in 2017, and SB 667, passed into law in 2015.
HB 1994 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.
Additionally, it 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 §964.052(f).
SB 677, which would also be implemented by the amendments, allows the DoI to approve dividends and distributions to holders of equity interest in a captive insurance company.
The amendments also adopt by reference alterations to the annual report and amend the sections that reflect current department style guidelines.
The DoI will consider any public comments on the proposal up until 22 October 2018.