CS/HB 1007 Summary: Insurer Insolvency

• Allows insurers to renegotiate surplus notes issued before January 1, 2011, by accelerating payment periods and obtaining exemptions or modifications to premium-to-surplus ratio requirements.

• Increases surplus requirements for assuming insurers in reinsurance transactions from $100 million to $250 million and specifies acceptable rating agencies including Standard & Poor's, Moody's, Fitch, A.M. Best, and Demotech.

• Creates comprehensive rehabilitation framework for insolvent title insurers, including annual and emergency assessments on all title insurers, with annual assessment limits of 3 percent of surplus or 10 percent over 5 years.

• Establishes surcharge mechanism on title insurance policies (up to $25 per transaction) to recover assessments from policyholders over a maximum 7-year period and restricts title insurers in rehabilitation from issuing new policies until released and approved.

• Bars officers, directors, and shareholders of insolvent title insurers from serving in those capacities at other state-authorized insurers unless they demonstrate their actions did not cause the insolvency and complied with all regulatory requirements.

• Modifies guaranty fund definitions to exclude claims rejected by other states based on statutory exclusions and removes board members employed by or materially related to insurers in receivership.