H.B. No. 3673
AN ACT
relating to an exemption for certain life insurance companies
regarding the valuation of reserves.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 425.073(d), Insurance Code, is amended
to read as follows:
(d) The valuation manual must specify:
(1) the minimum valuation standards for and
definitions of the policies or contracts subject to Section
425.0535, including:
(A) the commissioner's reserve valuation method
for life insurance contracts subject to Section 425.0535;
(B) the commissioner's annuity reserve valuation
method for annuity contracts subject to Section 425.0535; and
(C) the minimum reserves for all other policies
or contracts subject to Section 425.0535;
(2) the policies or contracts that are subject to the
requirements of a principle-based valuation under Section 425.074
and the minimum valuation standards consistent with those
requirements, including:
(A) the requirements for the format of reports to
the commissioner under Section 425.074(b)(3), which must include
the information necessary to determine if a valuation is
appropriate and in compliance with this subchapter;
(B) the assumptions prescribed for risks over
which the company does not have significant control or influence;
and
(C) the procedures for corporate governance and
oversight of the actuarial function, and a process for appropriate
waiver or modification of the procedures;
(3) the policies that are not subject to a
principle-based valuation under Section 425.074;
(4) the data and form of data required under Section
425.075, to whom the data must be submitted, and other desired
requirements, including requirements concerning data analyses and
reporting of analyses;
(5) other requirements, including requirements
relating to reserve methods, models for measuring risk, generation
of economic scenarios, assumptions, margins, use of company
experience, disclosure, certification, reports, actuarial opinions
and memorandums, transition rules, and internal controls; and
(6) an exemption that allows certain [small] companies
to value reserves based on an exception from certain requirements
of this section and Section 425.074[; however, the premium
thresholds for determining whether the exemption applies shall be
as follows:
[(A) less than $300 million of ordinary life
premium; and
[(B) less than $600 million of combined ordinary
life premiums for a group of life insurers if the company is a
member of that group].
SECTION 2. Section 425.073(e), Insurance Code, is repealed.
SECTION 3. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3673 was passed by the House on April
28, 2023, by the following vote: Yeas 135, Nays 9, 2 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3673 was passed by the Senate on May
16, 2023, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor