Texas House Bill HB2317

Texas 2015 - 84th Regular

Caption

Relating to reinsurance financial statement credit and accounting.

Impact

One of the primary impacts of this bill is the tightening of regulations surrounding reinsurance practices, which may lead to increased compliance burdens for insurers. It imposes strict criteria under which reinsurers can be certified and the credit allowed for reinsurance transactions. This could potentially protect policyholders by ensuring that only financially sound entities are allowed to engage in reinsurance transactions, thereby enhancing the overall stability of the insurance market in Texas.

Summary

House Bill 2317 pertains to the regulation of reinsurance financial statement credits and accounting practices in Texas. The legislation introduces amendments to the Texas Insurance Code that affect how ceding insurers can obtain credit for reinsurance ceded to assuming insurers. A key focus of the bill is the certification of reinsurers and the requirements they must meet to be recognized as authorized entities within the state. The bill stipulates specific conditions for ceding insurers, which must adhere to certain oversight measures when ceding significant portions of their direct and assumed risks.

Sentiment

The sentiment surrounding HB 2317 appears to be positive from industry supporters, who argue that the regulations set forth in the bill will lead to a more robust and secure insurance landscape. However, there may be concerns from smaller insurers about the additional compliance costs and complexities introduced by the new requirements. Overall, the discussions suggest a general consensus on the need for regulation, but disagreements may surface regarding the stringency of the proposed criteria.

Contention

Notable points of contention revolve around the balance between protecting consumers through stringent regulatory measures and the potential negative impact on the operational flexibility of reinsurers. Critics of the bill may argue that the new requirements could disproportionately affect smaller reinsurers, hindering their competitiveness in the market. The designation of qualified jurisdictions and the criteria required for certification could also lead to disputes regarding fairness and accessibility for international reinsurers wishing to operate within Texas.