SECTION 5.2006. Reinsurance

Pursuant to Insurance Code §2203.151(a)(3) and (4), the Texas Medical Liability Insurance Underwriting Association may cede and purchase reinsurance. The purpose of this section is to implement Insurance Code §2203.151(a)(3) and (4).

(1) The association may develop a reinsurance program that will provide for the purchase of reinsurance and that will maintain the purpose of the association to provide medical liability insurance and general liability insurance on a self-supporting basis.

(2) A reinsurance program is subject to prior approval by the Commissioner, and such prior approval must be obtained before implementation of the reinsurance program. The program must include, but is not limited to, the proposed reinsurance program structure and terms, including the reinsurance proposal and proposed reinsurance contract terms and conditions; cost of the proposed reinsurance program; the recommended percentage of reinsured business to be assumed by each individual reinsurer; a summary of the financial condition of each recommended reinsurer; the association's costs to administer the reinsurance program; compliance with Subchapter F of Chapter 7 of this title (relating to Reinsurance), to the extent that provisions do not conflict with this section or Chapter 2203 of the Insurance Code, or unless such provisions are waived by the Commissioner; and any other information the Commissioner deems necessary to enable the Commissioner to determine whether to approve or disapprove the reinsurance program. The association must submit to the Commissioner, no later than 90 days before expiration of the reinsurance contract, the proposed renewal reinsurance program or a statement of the reasons why a reinsurance program is no longer necessary.

(3) The association must submit written notice of any amendment to any existing reinsurance contract to the Commissioner at least 60 days prior to the effective date of the proposed amendment. The notice must include an explanation of the reason for the amendment and a copy of the draft amendment. The amendment will be deemed approved by the Commissioner unless within 60 days following the submission of the written notice the Commissioner disapproves the amendment.

Source Note: The provisions of this §5.2006 adopted to be effective June 13, 2000, 25 TexReg 5657; amended to be effective January 23, 2005, 30 TexReg 76; amended to be effective September 16, 2020, 45 TexReg 6363