(a) The Commissioner, under Insurance Code §493.108, concerning Credit Allowed for Certain Eligible Assuming Insurers, shall allow credit for reinsurance ceded by a domestic insurer to an assuming insurer that:      
        (1) is licensed to write reinsurance by a reciprocal jurisdiction described by subsection (b) of this section;       
        (2) has its principal office or is domiciled in that reciprocal jurisdiction; and       
        (3) meets the other conditions of this section.       
      (b) A "reciprocal jurisdiction" is a jurisdiction listed by the Commissioner under subsection (d) of this section, that is:      
        (1) a jurisdiction located outside of the United States that is subject to an in-force covered agreement with the United States, each within its legal authority, or, in the case of a covered agreement between the United States and the European Union, is a member state of the European Union. For purposes of this subsection, a "covered agreement" is an agreement entered into under the Dodd-Frank Wall Street Reform and Consumer Protection Act, 31 U.S.C. §313 and §314, that is currently in effect or in a period of provisional application and addresses the elimination, under specified conditions, of collateral requirements as a condition for entering into any reinsurance agreement with a ceding insurer domiciled in this state or for allowing the ceding insurer to recognize credit for reinsurance;       
        (2) a jurisdiction located in the United States that meets the requirements for accreditation under the NAIC financial standards and accreditation program; or       
        (3) a qualified jurisdiction listed by the Commissioner, under Insurance Code §493.1035, concerning Qualified Jurisdictions, and §7.624 of this title (relating to Qualified Jurisdictions), that is not described in paragraph (1) or (2) of this subsection and that the Commissioner determines meets the following additional requirements. The qualified jurisdiction:                  (A) must provide that an insurer that has its principal office or is domiciled in the qualified jurisdiction will receive credit for reinsurance ceded to a U.S.-domiciled assuming insurer in the same manner credit is received for reinsurance assumed by insurers domiciled in the qualified jurisdiction;                   (B) may not require a U.S.-domiciled assuming insurer to establish or maintain a local presence as a condition for entering into a reinsurance agreement with any ceding insurer regulated by the non-U.S. jurisdiction or allowing the ceding insurer to recognize credit for the reinsurance;                   (C) must recognize the U.S. state regulatory approach to group supervision and group capital by providing written confirmation. The confirmation must be by a competent regulatory authority in the qualified jurisdiction and state that insurers and insurance groups that are domiciled or maintain their principal office in this state or another jurisdiction accredited by the NAIC are subject only to worldwide prudential insurance group supervision, including worldwide group governance, solvency and capital, and reporting, as applicable, by the Commissioner or the commissioner of the domiciliary state and will not be subject to group supervision at the level of the worldwide parent undertaking of the insurance or reinsurance group by the qualified jurisdiction; and                   (D) must provide written confirmation by a competent regulatory authority in the qualified jurisdiction that information about insurers and their parents, subsidiaries, or affiliated entities, if applicable, will be provided to the Commissioner in accordance with a memorandum of understanding or similar document between the Commissioner and the qualified jurisdiction, including the International Association of Insurance Supervisors Multilateral Memorandum of Understanding or other multilateral memoranda of understanding that the NAIC coordinates.         
      (c) Credit for reinsurance will be allowed if the reinsurance is ceded from an insurer domiciled in this state to an assuming insurer meeting the following conditions.      
        (1) The assuming insurer must be licensed to transact reinsurance by, and have its principal office in or be domiciled in, a reciprocal jurisdiction.       
        (2) The assuming insurer must have and maintain on an ongoing basis minimum capital and surplus, or its equivalent, calculated at least annually as of the preceding December 31 or at the annual date otherwise statutorily reported to the reciprocal jurisdiction in the amounts stated in subparagraphs (A) and (B) of this paragraph. Satisfaction of this requirement must be confirmed as required by paragraph (7) of this subsection, according to the methodology of the assuming insurer's domiciliary jurisdiction. The amounts are:                  (A) not less than $250,000,000; or                   (B) if the assuming insurer is an association, including incorporated and individual unincorporated underwriters:                      (i) minimum capital and surplus equivalents (net of liabilities) or own funds of the equivalent of at least $250,000,000; and                       (ii) a central fund containing a balance of the equivalent of at least $250,000,000.           
        (3) The assuming insurer must have and maintain on an ongoing basis a minimum solvency or capital ratio, as applicable, as follows:                  (A) if the assuming insurer has its principal office or is domiciled in a reciprocal jurisdiction described by subsection (b)(1) of this section, the ratio specified in the applicable covered agreement;                   (B) if the assuming insurer is domiciled in a reciprocal jurisdiction described by subsection (b)(2) of this section, a risk-based capital ratio of 300% of the authorized control level, calculated with use of the formula developed by the NAIC; or                   (C) if the assuming insurer is domiciled in a reciprocal jurisdiction described by subsection (b)(3) of this section, a solvency or capital ratio that the Commissioner, after consulting with the reciprocal jurisdiction and considering any recommendations published through the NAIC committee process, determines to be an effective measure of solvency.         
        (4) The assuming insurer must agree to the following requirements and provide adequate assurance of its agreement by presenting a properly executed Form RJ-1, adopted by reference in §7.614 of this title (relating to Posting of Information, Submissions, and Adoption of Forms by Reference).                  (A) The assuming insurer must agree to provide prompt written notice and explanation to the Commissioner if it fails to meet the minimum requirements of paragraph (2) or (3) of this subsection, or if any regulatory action is taken against it for serious noncompliance with applicable law.                   (B) The assuming insurer must consent in writing to the jurisdiction of this state's courts and the appointment of the Commissioner as agent for service of process.                      (i) The Commissioner may require that the consent be provided and included in each reinsurance agreement under the Commissioner's jurisdiction.                       (ii) Nothing in this provision limits or in any way alters the capacity of parties to a reinsurance agreement to agree to alternative dispute resolution mechanisms, except to the extent the agreement to an alternative dispute resolution mechanism is unenforceable under applicable insolvency or delinquency laws.                     (C) The assuming insurer must agree in writing to pay all final judgments, wherever enforcement is sought, obtained by a ceding insurer, that have been declared enforceable in the jurisdiction where the judgment was obtained.                   (D) Each reinsurance agreement must require the assuming insurer to provide security in an amount equal to 100% of the assuming insurer's liabilities attributable to reinsurance ceded under the relevant agreement if the assuming insurer resists enforcement of a final judgment that is enforceable under the law of the jurisdiction in which it was obtained or a properly enforceable arbitration award, whether obtained by the ceding insurer or by its legal successor on behalf of its estate, if applicable.                   (E) The assuming insurer must confirm that it is not presently participating in any solvent scheme of arrangement involving this state's ceding insurers. The assuming insurer must agree to notify the ceding insurer and the Commissioner and to provide 100% security to the ceding insurer consistent with the terms of the scheme should the assuming insurer enter into a solvent scheme of arrangement. The security must be in a form consistent with the provisions of Insurance Code §493.104, concerning Credit for Funds Security Reinsurance Obligations, and §493.105, concerning Acceptability of Certain Letters of Credit, and §7.609 of this title (relating to Trust Agreement Requirements) and §7.610 of this title (relating to Letter of Credit Requirements). In this section, the term "solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure subject to majority creditor approval and judicial sanction in the assuming insurer's domiciliary jurisdiction that finally commutes liabilities of duly noticed class members or creditors of a solvent debtor, or reorganizes or restructures the debts and obligations of a solvent debtor on a final basis, and which may be subject to judicial recognition and enforcement by a governing authority outside the ceding insurer's domiciliary jurisdiction.                   (F) The assuming insurer must agree in writing to comply with paragraph (5) of this subsection.         
        (5) The assuming insurer or its legal successor on behalf of itself and any legal predecessors must provide to the Commissioner, on the Commissioner's request, the following documentation:                  (A) for the two years before entering into the reinsurance agreement and subsequently on an annual basis, the assuming insurer's annual audited financial statements, including the external audit report, prepared under the law of the jurisdiction of the assuming insurer's principal office or domiciliary jurisdiction, as applicable;                   (B) for the two years before entering into the reinsurance agreement, the solvency and financial condition reports or actuarial opinion, if filed with the assuming insurer's supervisor;                   (C) before entering into the reinsurance agreement and subsequently not more than semiannually, an updated list of all disputed and overdue reinsurance claims outstanding for 90 days or more, regarding reinsurance assumed from ceding insurers domiciled in the United States; and                   (D) before entering into the reinsurance agreement and subsequently not more than semiannually, information about the assuming insurer's assumed reinsurance by ceding insurer, ceded reinsurance by the assuming insurer, and reinsurance recoverable on paid and unpaid losses by the assuming insurer to allow for the evaluation of the prompt payment criteria under paragraph (6) of this subsection.         
        (6) The assuming insurer must maintain a practice of prompt payment of claims under reinsurance agreements. The lack of prompt payment is evidenced by any of the following criteria:                  (A) more than 15% of the reinsurance recoverables from the assuming insurer is overdue and in dispute as reported to the Commissioner;                   (B) more than 15% of the assuming insurer's ceding insurers or reinsurers have undisputed reinsurance recoverables on paid losses that are overdue by 90 days or more and exceed for each ceding insurer $100,000, or as otherwise specified in a covered agreement; or                   (C) the undisputed aggregate amount of reinsurance recoverable on paid losses is overdue by 90 days or more and exceeds $50,000,000, or as otherwise specified in a covered agreement.         
        (7) The assuming insurer's supervisory authority must confirm to the Commissioner annually that the assuming insurer complies with paragraphs (2) and (3) of this subsection.       
        (8) Nothing in this subsection precludes an assuming insurer from voluntarily providing the Commissioner with information.       
      (d) The Commissioner shall timely create and publish on TDI's website a list of reciprocal jurisdictions.      
        (1) The Commissioner's list shall include any reciprocal jurisdiction described by subsection (b)(1) and (2) of this section. The Commissioner shall consider any other reciprocal jurisdiction on the list of reciprocal jurisdictions published through the NAIC committee process. The Commissioner may approve a jurisdiction that does not appear on the NAIC list of reciprocal jurisdictions as provided by applicable law or rule or under criteria published through the NAIC committee process.       
        (2) The Commissioner may remove a jurisdiction from the Commissioner's list of reciprocal jurisdictions if the Commissioner determines that the jurisdiction no longer meets any requirement of a reciprocal jurisdiction under applicable law, rule, or in accordance with a process published through the NAIC committee process. However, the Commissioner may not remove from the Commissioner's list a reciprocal jurisdiction described by subsection (b)(1) and (2) of this section. On removal of a reciprocal jurisdiction from the Commissioner's list, credit for reinsurance ceded to an assuming insurer domiciled in that jurisdiction must be allowed if otherwise allowed under Insurance Code Chapter 493 or this subchapter.       
      (e) The Commissioner shall timely create and publish on TDI's website a list of assuming insurers that have satisfied the conditions of this section. Cessions to an assuming insurer on the list must be granted credit in accordance with this section.             Cont'd...