79R4475 KCR-F

By:  Seaman                                                       H.B. No. 885



A BILL TO BE ENTITLED

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)  On or before July 1 of each even-numbered year, 
a domestic title insurer shall perform and deliver to the 
commissioner an actuarial review concerning the adequacy of the 
insurer's statutory premium reserves required under Section 
2551.253.
	(b)  On or before October 1 of each even-numbered year, the 
[The] commissioner shall [may] reevaluate the adequacy of the 
statutory premium reserves required under Section 2551.253 and may 
make recommendations for legislative changes as the commissioner 
considers appropriate.
	SECTION 3.  This Act takes effect September 1, 2005.