(a) As soon as practical each year, the department shall compute the reserve liability of each stipulated premium company that has outstanding insurance policies.
(b) To make the computations, the department:
(1) shall use the net premium basis in accordance with the reserve table and interest rate adopted by the stipulated premium company and approved by the commissioner; and
(2) may use group methods and approximate averages for fractions of a year.

Terms Used In Texas Insurance Code 884.454

  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Year: means 12 consecutive months. See Texas Government Code 311.005

(c) The reserve liability may be computed on not more than a one-year preliminary term with allowance for any deficiency reserve under § 884.453.

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