By:  Seaman (Senate Sponsor - Brimer)                             H.B. No. 885
	(In the Senate - Received from the House March 29, 2005; 
March 30, 2005, read first time and referred to Committee on 
Business and Commerce; April 28, 2005, reported favorably by the 
following vote:  Yeas 8, Nays 0; April 28, 2005, sent to printer.)


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)  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.                           



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