Argonaut Cannot Recoup $1.1 Million in Taxes on Reinsurance Agreements Issued to Risk Pools, Texas Court Affirms

AUSTIN, Texas — Argonaut Insurance Co. and its affiliate are not entitled to recover more than $1.1 in taxes, penalties and interest on reinsurance agreements issued to two Texas self-funded risk pools, a Texas appeals court has affirmed, because the risk pools are not considered “insurers” under state law.

The Texas Court of Appeals, 3rd District, held that the premium payments are not non-taxable “reinsurance income,” because “for premiums to qualify as paid for reinsurance, the transaction must occur between two licensed insurance companies.”

Argonaut Insurance and Argonaut Great Central Insurance Co. provided insurance to the Texas Association of Public …