This bulletin is to inform stipulated premium companies of new RBC and minimum capital and surplus requirements that must be met in order for these companies to remain in compliance with Texas law.
New RBC Requirements. The Commissioner of Insurance has adopted amendments to §7.402, of the Texas Administrative Code, Title 28, which expands the RBC requirements to include all stipulated premium companies that write or assume a risk for life insurance, annuity contracts or accident and health, or a combination of these risks, on any one person in an amount that exceeds $10,000. A copy of §7.402 can be found at http://www.tdi.state.tx.us/rules/2010/documents/7-402-7-404.pdf
In part, §7.402 addresses RBC requirements for year-end 2010. New §7.402(e)(3) requires stipulated premium companies that do business only in Texas to file electronic copies of their RBC reports for 2010 with the National Association of Insurance Commissioners by March 1, 2011. (These requirements apply to companies that exceed the $10,000 threshold summarized above.)
New Minimum Capital and Surplus Requirements . House Bill 2570, which was adopted by the Texas Legislature last session, amended Texas Insurance Code §884.054 to increase the minimum capital requirements for stipulated premium companies to $200,000 and the minimum surplus requirements to $75,000. Section 12 of House Bill 2570 requires a stipulated premium company to increase its capital stock and surplus not later than a date prescribed by rule adopted by the Commissioner. This is to advise you that the Commissioner has adopted a new rule, §7.404, which provides the 10-year phase-in of these requirements. A copy of §7.404 can be found at http://www.tdi.state.tx.us/rules/2010/documents/7-402-7-404.pdf
Questions regarding this bulletin may be directed to Kevin Brady, Deputy Commissioner, Financial Program, at 512-305-6788 or kevin.brady@tdi.state.tx.us.
Mike Geeslin
Commissioner of Insurance