RULE §7.608 Insurance Ceded to Nonlicensed Insurers

Published: 2015

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A ceding insurer doing business in this state may not take credit for insurance ceded to an insurer which is not licensed in Texas, not accredited in Texas, or not trusteed pursuant to the provisions of §7.607 of this title (relating to Trusteed Reinsurers) unless the reinsurance agreement contains a provision requiring funds to be held directly by the ceding insurer or on behalf of the ceding insurer, including funds held in trust for the ceding insurer. The funds held by or on behalf of the ceding insurer shall be held in the United States and shall be segregated from other operating accounts and securities invested by the ceding insurer. The segregated account should clearly acknowledge ownership by the company on whose annual statement these assets are listed. The ceding insurer must maintain at all times a subsidiary ledger detailing by each assuming insurer all transactions pertinent to each cash account or security held under the respective reinsurance agreements.

Source Note: The provisions of this §7.608 adopted to be effective August 16, 1990, 15 TexReg 4435.