Texas Gov. Greg Abbott has signed a measure that tweaks Texas law relating to captive insurance companies.
Abbot signed House Bill 1944 on June 15. The bill was authored by Jim Murphy (R – Houston) and sponsored in the Senate by Bryan Hughes (R, Mineola).
The Texas Legislature in 2013 first approved the licensing of captive insurance companies and authorized the state insurance department to impose fees and taxes on those entities.
The 2013 law was amended in the 2015 legislative session and again this year.
According to the Texas Captive Insurance Association, HB 1944 makes the following changes to existing law:
- Authorizes a Texas captive insurance company to be formed as a reciprocal insurance exchange.
- Authorizes a Texas captive insurance company to take credit for reinsurance ceded to a non-affiliated reinsurer when specific requirements are met.
- Allows a captive insurance company to insure life insurance benefits for employee benefits subject to ERISA (Employee Retirement Income Security Act of 1974).
- Allows capital and surplus to be held in the form of Texas county or municipal bonds.
- Authorizes the insurance commissioner to waive requirement to provide an actuarial report with the captive’s annual filing if certain conditions met.
- Eliminates the requirement that the captive must have a licensed claims adjuster if the claims are limited to first party claims of the parent and/or affiliates of the captive.
- Simplifies the corporate formation processes between the Secretary of State and Department of Insurance.
Source: TxCIA, Texas Department of Insurance, Texas Legislature