In pan combine milk and tarragon. Heat to simmer; remove. Cover; let stand 30 minutes.
Meanwhile, lightly coat four 6-ounce custard cups with cooking spray. Place custard cups in square baking dish; set aside. Preheat oven to 325 degrees F.
In bowl whisk together eggs, salt, and pepper. Whisk in milk mixture; divide among prepared cups. Place baking dish on oven rack. Pour boiling water in dish to 1 inch depth.
Bake for 40 minutes or until knife inserted near centers comes out clean. Cool cups on rack 30 minutes. Cover surface of custards with plastic wrap. Chill 4 hours. Run knife around edge of cups; invert. Makes 4 servings.