(a) A captive insurance company shall maintain reserves in an amount stated in the
aggregate to provide for the payment of all losses or claims for which the captive
insurance company may be liable and that are:
(1) incurred on or before the date of the annual report under Section 964.060, whether reported or unreported; and
(b) In addition to the reserves required by Subsection (a), a captive insurance company
shall maintain reserves in an amount estimated to provide for the expenses of adjustment
or settlement of the losses or claims described by Subsection (a).
(c) The captive insurance company shall use generally accepted accounting principles
as an accounting basis except that a captive insurance company that is required to
hold a certificate of authority under another jurisdiction's insurance laws shall
use statutory accounting principles.
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