SECTION 7.623. Change in Rating and Suspension or Revocation of Certification

(a) In the case of a downgrade by an NRSRO or other negative change to rating criteria, the Commissioner will assign a new rating to the certified assuming insurer in accordance with the requirements of this subchapter and notify the certified assuming insurer in writing.

(b) If the Commissioner upgrades the assigned rating of a certified assuming insurer, the certified assuming insurer may meet the security requirements applicable to its new rating on a prospective basis, provided that the certified assuming insurer posts security under the previously applicable security requirements as to all contracts in force on or before the effective date of the upgraded rating. If the Commissioner downgrades the assigned rating of a certified assuming insurer, the certified assuming insurer is subject to and must meet the security requirements applicable to its new rating for all business it has assumed as a certified assuming insurer.

(c) The Commissioner may, after notice and opportunity for hearing as required under Insurance Code §493.1038(b), suspend or revoke a certified assuming insurer's certification at any time if the certified assuming insurer fails to meet its obligations or security requirements under Insurance Code Chapter 493 or this subchapter, including the certified assuming insurer's financial or operating results, or documented delays in payment by the certified assuming insurer that lead the Commissioner to reconsider the certified assuming insurer's ability or willingness to meet its contractual obligations.

(d) If the Commissioner suspends or revokes the certification of a certified assuming insurer, the ceding insurer may not continue to take credit for reinsurance ceded to the assuming insurer unless the assuming insurer posts security in accordance with Insurance Code §493.1038. The Commissioner may allow up to 90 days for an order suspending or revoking an assuming insurer's certification to become effective.

Source Note: The provisions of this §7.623 adopted to be effective June 19, 2018, 43 TexReg 3888