Texas House Bill HB3086

Texas 2011 - 82nd Regular

• Out of House Committee: 5/2/11
• Introduced: 3/10/11
• Refer: 3/18/11
• Report Pass: 4/26/11

Caption

Relating to credit to certain ceding insurers for reinsurance ceded to certain certified assuming insurers.

Impact

If passed, HB 3086 would have significant implications on the insurance landscape in Texas. It aims to provide clearer guidelines for crediting reinsurance, which could lead to greater participation by reinsurers in Texas. The introduction of certified reinsurers is expected to foster a more competitive environment while simultaneously ensuring that ceding insurers' interests and risk exposures are better managed. This shift could ultimately impact the pricing of insurance products and the stability of the reinsurance market in Texas.

Summary

House Bill 3086 focuses on the credit allowed to ceding insurers for reinsurance ceded to certain certified assuming insurers. The bill amends multiple sections of the Texas Insurance Code to enhance the rules surrounding how ceding insurers can secure credit for their reinsurance agreements. It introduces the concept of 'certified reinsurers' and establishes criteria that these reinsurers must meet to qualify for credit. Notably, the bill requires the commissioner to evaluate the supervisory system of jurisdictions where assuming insurers are domiciled, ensuring they meet specific standards before granting certification.

Contention

Although HB 3086 has the potential to streamline regulations and improve the reliability of reinsurance practices, there may be notable points of contention among stakeholders. Critics might argue that the new certification process could limit options for ceding insurers, especially if the criteria are perceived as too stringent or if suitable reinsurers are scarce. Proponents may counter that these measures are vital in safeguarding the financial interests of ceding insurers and maintaining overall market stability in the face of potential future adverse conditions.