SECTION 7.403. Transition Period for Certain County Mutual Insurance Companies

(a) This section applies to a county mutual insurance company that cedes 85 percent or more of the company's direct and assumed risks to one or more nonaffiliated reinsurers and the company is otherwise required to comply with the Insurance Code §912.056(f).

(b) A county mutual insurance company shall comply with §7.402 of this subchapter (relating to Risk-Based Capital and Surplus Requirements for Insurers and HMOs) unless the company meets the express criteria contained in the Insurance Code §912.056(f).

(c) A county mutual insurance company subject to the Insurance Code §912.056(f) that on December 31, 2009, had less than the minimum unencumbered surplus required by §912.056(f) must:

(1) not later than December 31, 2010, have increased the amount of its unencumbered surplus by at least 20 percent of the difference between the minimum amount required by §912.056(f) and the amount held by the company on December 31, 2009;

(2) not later than December 31, 2011, have increased the amount of its unencumbered surplus by at least 40 percent of the difference between the minimum amount required by §912.056(f) and the amount held by the company on December 31, 2009;

(3) not later than December 31, 2012, have increased the amount of its unencumbered surplus by at least 60 percent of the difference between the minimum amount required by §912.056(f) and the amount held by the company on December 31, 2009;

(4) not later than December 31, 2013, have increased the amount of its unencumbered surplus by at least 80 percent of the difference between the minimum amount required by §912.056(f) and the amount held by the company on December 31, 2009; and

(5) not later than December 31, 2014, have increased the amount of its unencumbered surplus by at least 100 percent of the difference between the minimum amount required by §912.056(f) and the amount held by the company on December 31, 2009.

Source Note: The provisions of this §7.403 adopted to be effective December 12, 2010, 35 TexReg 10961