2022 Texas Statutes
Insurance Code
Title 4 - Regulation of Solvency
Subtitle F - Reinsurance
Chapter 493 - Authorized Reinsurance; Credit and Accounting
Subchapter C. Credit for Reinsurance
Section 493.1039. Concentration Risk

Sec. 493.1039. CONCENTRATION RISK. (a) A ceding insurer shall manage its reinsurance recoverable proportionate to its book of business. A domestic ceding insurer shall notify the commissioner not later than the 30th day after the date reinsurance recoverable from any single assuming insurer, or group of affiliated assuming insurers, exceeds or is likely to exceed 50 percent of the domestic ceding insurer's last reported surplus to policyholders. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

(b) A ceding insurer shall diversify its reinsurance program. A domestic ceding insurer shall notify the commissioner not later than the 30th day after the date the insurer cedes to any single assuming insurer, or group of affiliated assuming insurers, an amount that exceeds or is likely to exceed 20 percent of the ceding insurer's gross written premium in the prior calendar year. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.

Added by Acts 2017, 85th Leg., R.S., Ch. 594 (S.B. 1070), Sec. 2.05, eff. September 1, 2017.