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.