Texas Insurance Code 882.401 – Amount of Contingency Reserve
(a) A mutual life insurance company organized under this chapter may maintain a contingency reserve that exceeds the reserves and liabilities provided by this chapter. The amount of the contingency reserve may not exceed the greater of:
(1) $10,000;
(2) an amount that:
(A) equals 20 percent of the company’s policy reserves and policy liabilities plus one percent of the amount of the company’s life insurance in force; and
(B) does not exceed $750,000; or
(3) an amount that equals 20 percent of the company’s policy reserves and policy liabilities.
(b) In determining the amount of a company’s policy reserves and policy liabilities for purposes of this section, the company may only include the following, after deducting the net value of the company’s risks reinsured by other solvent assuming insurers:
(1) the company’s reserves on outstanding life insurance policies and annuity contracts, contracts issued as supplemental to the policies or contracts or in connection with the policies or contracts or provisions included in policies or contracts that insure against disability or accidental death; and
(2) the company’s liabilities for:
(A) optional modes of settlement; or
(B) dividends left on deposit at interest.
Terms Used In Texas Insurance Code 882.401
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.