Enrolled Bill Summary

            Senate Bill 1388 amends the Texas Title Insurance Act to replace the current formula for calculating the amount a domestic title insurer must set aside for premium reserves, with a separate formula for 1997 and for 1998 and after. The act requires insurers to compute a total statutory premium reserve balance for all policy years combined as of 1996 to determine whether the insurer should make a transitional charge or reduction to statutory reserves. Beginning in 1997, insurers must compute the total statutory premium reserve balance for all policy years before 1997 combined to determine the runoff balance for reduction of premium reserve. In addition, the act requires insurers to obtain actuarial certification of reserves and to establish a supplemental reserve with excess reserves.