Tex. Ins. Code Section 1806.105
Profit Sharing Authorized; Certain Prohibitions


This subchapter does not prohibit an insurer from sharing earned profits with the insurer’s policyholders in accordance with a profit sharing agreement contained in the policy, provided that any profit sharing under the policy with those insureds must be uniform among the insureds and may consist only of the equitable distribution of earnings among the insureds in accordance with the terms of the policy.


An insurer may not:


discriminate in the distribution of profits among insureds of the same class;


distribute the profit to an insured before the expiration of the policy; or


establish a class of insureds for the distribution of profits, except on the commissioner’s approval.


A distribution of profits or dividends to an insured may not take effect or be distributed until:


the insurer has adequate reserves, as computed on the same basis for all classes of insurers to which this subchapter applies; and


if the policyholder dividend amount exceeds 10 percent of surplus, the commissioner approves the distribution.


The insurer must notify the commissioner in writing of each distribution if the insurer’s policyholder dividend amount is not greater than 10 percent of surplus.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 2, eff. April 1, 2007.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 463 (S.B. 1006), Sec. 5, eff. June 14, 2013.

Source: Section 1806.105 — Profit Sharing Authorized; Certain Prohibitions, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­1806.­htm#1806.­105 (accessed Nov. 25, 2023).

Nov. 25, 2023

§ 1806.105’s source at texas​.gov