By December 31 each year, TDI computes reinsurance reserves for all risks that an authorized insurer is covering in Texas. Which lines are exempt from this requirement?

By December 31 each year, TDI computes reinsurance reserves for all risks that an authorized insurer is covering in Texas. Which lines are exempt from this requirement?

• A. Life insurance
• B. Homeowners insurance
• C. Automobile insurance
• D. Commercial liability insurance

Answer: (A)

The rule focuses on reinsurance reserves for property and casualty exposures. Reinsurance reserve calculations are used to reflect potential ceded losses for lines that involve more volatile, short-tail or mixed-risk claims typical of P&C business. Life insurance, on the other hand, is regulated under actuarial reserves and other life-regulation frameworks, not through the same reinsurance reserve schedule. Therefore life insurance is exempt from this requirement. The other lines—homeowners, automobile, and commercial liability—are P&C lines and fall under the reinsurance reserve rule.

The rule focuses on reinsurance reserves for property and casualty exposures. Reinsurance reserve calculations are used to reflect potential ceded losses for lines that involve more volatile, short-tail or mixed-risk claims typical of P&C business. Life insurance, on the other hand, is regulated under actuarial reserves and other life-regulation frameworks, not through the same reinsurance reserve schedule. Therefore life insurance is exempt from this requirement. The other lines—homeowners, automobile, and commercial liability—are P&C lines and fall under the reinsurance reserve rule.