H.B. No. 885




AN ACT
relating to premium reserve amounts required for title insurers. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 2551.253, Insurance Code, as effective April 1, 2005, is amended to read as follows: Sec. 2551.253. AMOUNTS ADDED TO RESERVE FOR CALENDAR YEARS AFTER 1997; REDUCTIONS. (a) Out of total charges for title insurance policies written or assumed on or after January 1, 1998, and before January 1, 2005, a domestic title insurer shall add to and set aside in the statutory premium reserve an amount equal to the total of the following, as described in the insurer's annual statement: (1) 25 cents per $1,000 of net retained liability if the insurer had $250 million or more in direct written premiums written for the most recent calendar year; or (2) 30 cents per $1,000 of net retained liability if the insurer had less than $250 million in direct written premiums written for the most recent calendar year. (b) Out of total charges for title insurance policies written or assumed on or after January 1, 2005, a domestic title insurer shall add to and set aside in the statutory premium reserve an amount equal to the total of 18.5 cents per $1,000 of net retained liability for the most recent calendar year, as described in the insurer's annual statement. (c) A domestic title insurer shall reduce additions to the statutory premium reserve set aside for title insurance policies written or assumed after the year 1997 over a 20-year period beginning in the year after the year in which the policies are written or assumed in the manner and under the same percentages applied under Sections 2551.252(c) and (d). SECTION 2. Section 2551.258, Insurance Code, as effective April 1, 2005, is amended to read as follows: Sec. 2551.258. REEVALUATION OF CERTAIN RESERVE REQUIREMENTS. (a) The commissioner may: (1) reevaluate the adequacy of the statutory premium reserves required under Section 2551.253; and (2) based on an actuarial review, change by order the amount of the statutory premium reserve required of any domestic title insurer or all domestic title insurers [may make recommendations for legislative changes as the commissioner considers appropriate]. (b) Any change in the amount of a statutory premium reserve under Subsection (a)(2) is considered a statutory premium reserve and is not considered a supplemental reserve. SECTION 3. This Act takes effect September 1, 2005. ______________________________ ______________________________ President of the Senate Speaker of the House I certify that H.B. No. 885 was passed by the House on March 23, 2005, by a non-record vote. ______________________________ Chief Clerk of the House I certify that H.B. No. 885 was passed by the Senate on May 5, 2005, by the following vote: Yeas 31, Nays O. ______________________________ Secretary of the Senate APPROVED: _____________________ Date _____________________ Governor