TDI Proposed Maintenance Tax Rates
The TDI held a meeting Wednesday to discuss the maintenance tax rates to be proposed for 2018. Also discussed was the examination overhead assessment rate.

As you can see in this document, there will be no change in the maintenance tax rate for life/health insurers. It should be noted, however, that page 3 of the document shows a perceived shortfall of $6.3 M in the amount needed for LAH. This is distributed to other lines and type of insurance including fire and allied lines.

At the meeting, TDI staff discussed allocation of costs to each line of insurance even though there were no documents to show how the costs were allocated or what caused the "alleged shortfall."

We mention this because the TDI method of allocation is often used to justify an increase in the maximum maintenance tax rate. TDI has tried in the past to justify an increase on LAH.

The second issue that impacts our members is the overhead assessment. This is a separate assessment that is imposed primarily on Texas domestic insurers to support the examination functions of the TDI. You will notice that 8 foreign companies will be assessed in 2018. It was explained at the meeting that foreign companies will be assessed in 2018 if an examination was started on them in 2017. In response to questions, TDI stated that this was only the cost of a single state market conduct examination conducted by TDI on foreign insurers. Other foreign insurers will not be assessed. The overhead assessment is based on both admitted assets and gross premiums. There will be an increase in 2018 if this is adopted. Insurers that are assessed received premium tax credits for this assessment.

The last page shows the new rates that will be proposed. These are proposed as rule changes and expected to be effective January 1, 2018 even though the timing will not permit adoption prior to later in January.

ICYMI: Speaker Straus Will Not Run Again
As you may have seen earlier this week, Speaker Joe Straus has opted not to run for reelection. Speculation is rampant about what his departure will mean for the future of the Republican party in Texas, and the future of Texas itself.

Next Member Call
Our next call will be held on Wednesday, November 15, at 10 am Central. There will be no call on November 1 due to a Board meeting. Should a critical issue come up before the 15th, we will schedule a call as needed.

To call in on November 15, dial 1-888-537-7715 and enter code 345-555-567# when prompted. An agenda will be posted on both the website and mobile app prior to the call. An Outlook calendar file is attached.