28 TAC §7.69
The commissioner of insurance adopts new §7.69 concerning
the requirements for filing the 1999 annual and 2000 quarterly statements,
other reporting forms, diskettes or electronic filings with the National Association
of Insurance Commissioners (NAIC) via the Internet. The section provides instructions
to be used by insurers and certain other entities regulated by the Texas Department
of Insurance when reporting in 2000 their financial condition and business
operations and activities, during the 1999 and 2000 calendar years, and the
requirement to file such completed statement blanks and other reporting forms,
including diskettes or electronic filings with the NAIC via the Internet.
Section 7.69 is adopted with changes to the proposed text as published in
the December 17, 1999, issue of the
Texas Register
(24 TexReg 11211).
The annual and quarterly statement blanks, other reporting forms, and diskettes
adopted by reference by the section are required by statute for reporting,
in 2000, the financial condition and business operations and activities conducted
by insurers and other entities regulated by the department during the 1999
and 2000 calendar years. The information provided is necessary for the department
to monitor the solvency, business activities and statutory compliance of the
insurers and other entities regulated by the department. Most of the forms
adopted by reference by the section have been promulgated by the NAIC and
are used by other state insurance regulators. The use of these forms promotes
uniformity and efficiency in the regulation of insurance companies and other
entities regulated by the department. In addition to these standard forms,
there are other forms adopted by reference by the section that are used only
by the department. These forms are reviewed each year to assure that the information
required to complete the form is necessary for the department to perform its
duties. Exhibit VI in the HMO supplemental form adopted by subsection (h)(2)(C)
was changed to delete part of a sentence on question fourteen that stated
"...only if the date of commenced business is within three years of the statement
due date." This part of the sentence conflicted with an existing rule.
The new section defines terms relevant to the statement blanks and reporting
forms; provides the dates by which certain reports are to be filed; and adopts
by reference the annual and quarterly statement blanks, other reporting forms,
and instructions for reporting the financial condition and business operations
and activities; and requires insurance companies and certain other regulated
entities to file such annual and quarterly statements and other reporting
forms with the department and/or the NAIC as directed. The required documents
will provide financial information to the public and regulatory agencies,
and will be used by the department to monitor the financial condition of insurers
and other regulated entities licensed in Texas to assure financial solvency
and compliance with applicable laws and accounting requirements. The adopted
section adopts several changes from last year's section adopting the 1998
annual statement and forms for reporting in 1999. Subsection (f) only requires
fraternal benefit societies to file their quarterly statements with the department.
In 1999, they were required to file them with the NAIC and the department.
Subsection (h)(1)(C)(i) requires the actuarial opinion for an HMO to include
a statement that any workpapers of the actuary will be retained for a period
of seven years. Subsection (h)(1)(C)(ii) requires the actuarial opinion for
an HMO to specifically disclose the premium deficiency reserve amounts, if
any. Subsection (h)(2)(C) requires additional information concerning point
of service rider coverage. Finally, the section provides instructions to all
companies that complete certain schedules in the statement to file a paper
copy of those schedules with the department. The annual and quarterly statement
blanks, other reporting forms, and manuals which are adopted by this section
have been filed with the Office of the Secretary of State, Texas Register
Division. Copies are available for inspection in the office of the Financial
Monitoring Activity of the Texas Department of Insurance, William P. Hobby,
Jr. State Office Building, 333 Guadalupe, Building 3, Third Floor, Austin,
Texas.
No comments were received on the proposal.
The new section is adopted under the Insurance Code, Articles
1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22,
9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22,
17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.39, 21.43, 21.49, 21.52F, 21.54,
22.06, 23.02 and 23.26, and §§32.041 and 36.001. Article 1.11 authorizes
the commissioner to make changes in the forms of the annual statements required
of insurance companies of any kind, as shall seem best adapted to elicit a
true exhibit of their condition and methods of transacting business, and requires
certain insurers to make filings with the NAIC. Articles 3.07, 3.20-1, 3.27-2,
3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19,
14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02,
20A.10, 20A.22, 21.49, 21.54, 22.06, 23.02, and 23.26 require the filing of
financial reports and other information by insurers and other regulated entities,
and specify particular rule-making authority of the commissioner relating
to those insurers and other regulated entities. Article 21.39 requires insurers
to establish adequate reserves and provides for the adoption of each current
formula for establishing reserves applicable to each line of insurance. Article
21.43 provides the conditions under which foreign insurers are permitted to
do business in this state and requires foreign insurers to comply with the
provisions of the Insurance Code. Article 21.52F authorizes the commissioner
to adopt rules to implement the regulation of nonprofit health corporations
holding a certificate of authority under that article. Section 32.041 requires
the department to furnish the statement blanks and other reporting forms necessary
for companies to comply with the filing requirements. Section 36.001 provides
that the commissioner may adopt rules for the conduct and execution of the
duties and functions of the department as authorized by statute for general
and uniform application.
§7.69.Requirements for Filing the 1999 Annual and 2000 Quarterly Statements, Other Reporting Forms, and Diskettes or Electronic Filings with the NAIC Via the Internet.
(a)
Scope. This section provides insurers and other regulated
entities with the requirements for the 1999 annual statement, 2000 quarterly
statements, other reporting forms, and diskettes or electronic filings with
the NAIC via the Internet necessary to report information concerning the financial
condition and business operations and activities of insurers. This section
applies to all insurers and other regulated entities authorized to do the
business of insurance in this state and includes, but is not limited to, life
insurers; accident insurers; life and accident insurers; life and health insurers;
accident and health insurers; life, accident and health insurers; mutual life
insurers; stipulated premium insurers; group hospital service corporations;
fire insurers; fire and marine insurers; general casualty insurers; fire and
casualty insurers; mutual insurers other than life; county mutual insurers;
Lloyd's plans; reciprocal and inter-insurance exchanges; domestic risk retention
groups; domestic joint underwriting associations; title insurers; fraternal
benefit societies; local mutual aid associations; statewide mutual assessment
companies; mutual burial associations; exempt associations; farm mutual insurers;
health maintenance organizations; nonprofit health corporations; nonprofit
legal services corporations; the Texas Health Insurance Risk Pool; the Texas
Workers' Compensation Insurance Fund, and the Texas Windstorm Insurance Association.
The commissioner adopts by reference the 1999 annual and 2000 quarterly statement
blanks, instruction manuals, and other reporting forms specified in this section.
The annual and quarterly statement blanks and other reporting forms are available
from the department, Financial Monitoring Activity, Mail Code 303-1A, P.O.
Box 149099, Austin, Texas 78714-9099. Insurers and other regulated entities
shall properly report to the Texas Department of Insurance and the NAIC by
completing the appropriate annual and quarterly statement blanks, prepared
with laser quality print (hand written copies must be prepared legibly using
black ink), other reporting forms, and diskettes or electronic filings with
NAIC via the Internet following the applicable instructions as outlined in
subsections (d)-(m) of this section.
(b)
Conflicts with Other Laws. In the event of a conflict between
the Insurance Code, any currently existing departmental rule, form, instructions,
or any specific requirement of this section and the NAIC manuals or instruction
listed in the subsections listed below, then and in that event, the Insurance
Code, the department's promulgated rule, form, instruction, or the specific
requirement of subsections (d)-(m) of this section shall take precedence and
in all respects control.
(c)
Definitions. The following words and terms, when used in
this section, shall have the following meanings:
(1)
Association edition--Blanks and forms promulgated by the
National Association of Insurance Commissioners.
(2)
Commissioner--The commissioner of insurance appointed
under the Texas Insurance Code, §§31.021, 31.023, 33.002 and 33.006
(formerly Article 1.09).
(3)
Department--The Texas Department of Insurance.
(4)
Insurer--A person or business entity legally organized
in and authorized by its domiciliary jurisdiction to do the business of insurance,
including health maintenance organizations.
(5)
NAIC--The National Association of Insurance Commissioners.
(6)
Texas edition--Blanks and forms promulgated by the
commissioner of insurance.
(d)
Filing requirements for life, accident and health insurers.
Each life, life and accident, life and health, accident and health, mutual
life, or life, accident and health insurance company, stipulated premium insurance
company, group hospital services corporation and the Texas Health Insurance
Risk Pool shall complete and file the blanks, forms, diskettes or electronic
filings with the NAIC via the Internet for the 1999 calendar year and the
first three quarters of the 2000 calendar year, as specified in this subsection.
The forms and reports identified in paragraphs (1)(A)-(E); (2)(A), (B), (H);
and (3)(A)-(K) of this subsection shall be completed in accordance with the
1999 NAIC Annual Statement Instructions, Life, Accident and Health, and the
NAIC Accounting Practices and Procedures Manual for Life, Accident and Health
Companies (January, 1999) except as provided by subsection (b) of this section.
The diskettes or electronic filings with the NAIC via the Internet identified
in paragraph (3)(L) and (M) of this subsection shall be completed in accordance
with the 1999 NAIC Annual Statement Diskette Filing Specifications-Life, Accident &
Health, except as provided by paragraph (4) of this subsection.
(1)
Reports to be filed both with the department and the NAIC
include the following:
(A)
Annual Statement (association edition, with a blue colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000 (stipulated premium insurance companies,
April 1, 2000);
(B)
Annual Statement of the Separate Accounts (association
edition, with a green colored cover made of minimum 65 lb. paper) (required
of companies maintaining separate accounts), the 8 1/2 inch by 14 inch size,
to be filed on or before March 1, 2000 (stipulated premium insurance companies,
April 1, 2000);
(C)
Management's Discussion and Analysis (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000;
(D)
Life and Accident and Health Quarterly Statement (association
edition), the 8 1/2 inch by 14 inch size, to be filed on or before May 15,
August 15, and November 15, 2000. However, a Texas stipulated premium insurance
company, unless specifically requested to do so by the department, is not
required to file quarterly statements with the department or the NAIC if it
meets all three of the following conditions:
(i)
it is authorized to write only life insurance on its certificate
of authority;
(ii)
it collected premiums in the prior calendar year of less
than $1 million; and
(iii)
it had a profit from operations in the prior two calendar
years;
(E)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items; required of all companies), to be attached to the annual statement
required by paragraph (1)(A) of this subsection.
(2)
Reports to be filed only with the department:
(A)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
the 8 1/2 inch by 14 inch size, to be filed on or before March 1, 2000;
(B)
Supplemental Compensation Exhibit (association edition),
the 8 1/2 inch by 14 inch size (required of Texas domestic companies only),
to be filed on or before March 1, 2000 (stipulated premium companies, April
1, 2000);
(C)
Annual Statement (Texas edition, with a green colored cover
made of minimum 65 lb. paper) (required of companies writing prepaid legal
business in 1999), the 8 1/2 inch by 14 inch size, to be filed on or before
March 1, 2000;
(D)
Affidavit in Lieu of Annual Statement (Texas edition) (required
of companies authorized to write prepaid legal business that did not write
such business in 1999), to be filed on or before March 1, 2000;
(E)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2000
(stipulated premium insurance companies, April 1, 2000);
(F)
Analysis of Surplus (Texas edition) for life, accident
and health insurers, to be filed on or before March 1, 2000 (stipulated premium
insurance companies, April 1, 2000); and
(G)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), as an attachment
to page ten of the annual statement as required by paragraph (1)(A) of this
subsection, to be filed on or before March 1, 2000 (stipulated premium companies,
April 1, 2000).
(H)
The Texas Health Insurance Risk Pool shall complete and
file the following only:
(i)
Annual Statement (association edition, with a blue colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000. However, only pages 1-5, 12, and the Notes
to Financial Statements (page 31) and Schedule E (page 75) are required to
be completed and filed on or before March 1, 2000; and
(ii)
Life and Accident and Health Quarterly Statement (association
edition), the 8 1/2 inch by 14 inch size, to be filed on or before May 15,
August 15, and November 15, 2000.
(iii)
The Texas Health Insurance Risk Pool is not required
to file reports, diskettes, or electronic filings with the NAIC.
(3)
Reports, diskettes, or electronic filings
via the Internet filed only with the NAIC:
(A)
Trusteed Surplus Statement (association edition), Life,
Accident and Health Supplement (required of the U. S. branch of an alien insurer),
the 8 1/2 inch by 14 inch size, to be filed on or before March 1, May 15,
August 15, and November 15, 2000;
(B)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare business), to be filed on or before
March 1, 2000;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2000 (stipulated premium insurance companies,
April 1, 2000);
(D)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit business), the 8 1/2 inch by 14 inch
size, to be filed on or before April 1, 2000;
(E)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), the 8 1/2 inch by
14-inch size, to be filed on or before March 1, 2000 (stipulated premium insurance
companies, April 1, 2000);
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), the 8 1/2
inch by 14 inch size, to be filed on or before April 1, 2000;
(G)
Interest Sensitive Life Insurance Products Report (association
edition) (required of companies writing interest sensitive products), the
8 1/2 inch by 14 inch size, to be filed on or before April 1, 2000;
(H)
Life, Health and Annuity Guaranty Association Model Act
Assessment Base Reconciliation Exhibit (association edition), the 8 1/2 inch
by 14 inch size, to be filed on or before April 1, 2000;
(I)
Adjustments to the Life, Health and Annuity Guaranty Association
Model Act Assessment Base Reconciliation Exhibit (association edition), the
8 1/2 inch by 14 inch size, to be filed on or before April 1, 2000;
(J)
Schedule DC (association edition) (for insurers engaged
in insurance options and futures), the 8 1/2 inch by 14 inch size, to be filed
on or before March 1, 2000 (stipulated premium insurance companies, April
1, 2000);
(K)
Schedule DS (association edition) (required only of companies
that have included "equity in the undistributed income of unconsolidated subsidiaries"
in their "net gain from operations"), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000 (stipulated premium insurance companies,
April 1, 2000);
(L)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2000
(stipulated premium insurance companies, April 1, 2000); and
(M)
Diskettes or electronic filings via the Internet containing
computerized quarterly statement data, to be filed on or before May 15, August
15, and November 15, 2000. A Texas stipulated premium insurance company, unless
specifically requested to do so by the department, is not required to file
quarterly diskettes or electronic filings via the Internet with the NAIC if
it meets all three of the following conditions:
(i)
it is authorized to write only life insurance on its certificate
of authority;
(ii)
it collected premiums in the prior calendar year of less
than $1 million; and
(iii)
it had a profit from operations in the prior two calendar
years.
(4)
The following provisions shall apply to
the filings required in paragraphs (1)-(3) of this subsection.
(A)
Texas domestic life, accident and health companies with
more than $30 million in direct premiums in 1999 must establish Asset Valuation
Reserves (AVR) and Interest Maintenance Reserves (IMR) in their financial
statements in accordance with the instructions in the 1999 NAIC Annual Statement
Instructions, Life, Accident and Health Companies. Texas domestic companies
with $30 million or less in direct premiums and the Texas Health Insurance
Risk Pool may establish AVR and IMR in their financial statements in accordance
with the instructions in the 1999 NAIC Annual Statement Instructions, Life,
Accident and Health Companies or they must value bonds and preferred stocks
in compliance with the provisions of the NAIC Purposes and Procedures of the
Securities Valuation Office Manual concerning companies not maintaining an
AVR or IMR.
(B)
Actuarial opinions required by paragraph (1)(E) of this
subsection shall be in accordance with the following:
(i)
Unless exempted, the statement of actuarial opinion should
follow the applicable provisions of §§3.1601-3.1611 of this title
(relating to Actuarial Opinion and Memorandum Regulation).
(ii)
For those companies exempted from §§3.1601-3.1611
of this title, instructions 1-12, established by the NAIC, must be followed.
(iii)
Any stipulated premium company subject to §§3.1601-3.1611
of this title which does not insure or assume risk on contracts with death
benefits, cash value, or accumulation values on any one life in excess of
$10,000, except as permitted by Insurance Code, Article 22.13, §1(b),
is exempt from submission of a statement of actuarial opinion in accordance
with §3.1608 of this title (relating to Statement of Actuarial Opinion
Based on an Asset Adequacy Analysis), but must submit an actuarial opinion
pursuant to §3.1607 of this title (relating to Statement of Actuarial
Opinion Not Including an Asset Adequacy Analysis).
(C)
Reporting for "administrative services only" (ASO) plans.
Some insurers may act only as administrators of accident and health plans
where the plan bears all of the risk of claims. Such plans are commonly referred
to as "administrative services only" plans and are also referred to as "uninsured
plans." The amounts received for ASO plans shall not be recorded in premiums.
Claims paid by the insurer under uninsured accident and health plans should
not be reported in the Summary of Operations. Commissions, expenses, and taxes
incurred by an insurer for uninsured accident and health plans are to be reported
on a gross basis by type of expense. The administration fees and expense reimbursements
relating to uninsured business are deducted in the general expense exhibit
and general insurance expenses are to be reported in the Summary of Operations
net of such fees and reimbursement. Texas domestic insurers subject to this
subsection that have reported amounts received for ASO plans as premiums under
different reporting standards for at least five years prior to the effective
date of this section may continue reporting amounts received for ASO plans
as premiums. Under such circumstances, the insurer shall provide a general
description of the source and amounts received for ASO plans as an attachment
to the Summary of Operations and the Schedule T of the annual statement.
(D)
The 1999 NAIC Annual Statement Instructions, Life, Accident
and Health Companies provide that certain schedules be filed only with the
state of domicile, the NAIC and any other state requesting such filings. The
department requires the filing of a paper copy of such schedules for domestic
and foreign insurers.
(e)
Requirements for property and casualty insurers. Each fire,
fire and marine, general casualty, fire and casualty, or U.S. Branch, a county
mutual insurance company, mutual insurance company other than life, Lloyd's
plan, reciprocal or inter-insurance exchange, domestic risk retention group,
life insurance company that is licensed to write workers' compensation, any
farm mutual insurance company that filed a property and casualty annual statement
under paragraph (1)(A) of this subsection for the 1998 calendar year or had
gross written premiums in 1999 in excess of $5,000,000, any Mexican non-life
insurer licensed under any article of the Insurance Code other than, or in
addition to, Insurance Code, Article 8.24, domestic joint underwriting association,
the Texas Workers' Compensation Insurance Fund and the Texas Windstorm Insurance
Association shall complete and file the following blanks, forms, and diskettes
or electronic filings with the NAIC via the Internet for the 1999 calendar
year and the first three quarters of the 2000 calendar year. The forms and
reports identified in paragraphs (1)(A)-(G); (2)(A), (B) and (J); and (3)(A)-(G)
of this subsection shall be completed in accordance with the 1999 NAIC Annual
Statement Instructions, Property and Casualty and the NAIC Accounting Practices
and Procedures Manual for Property and Casualty Companies (March 1998), except
as provided by paragraph (4) of this subsection. The diskettes or electronic
filings with the NAIC via the Internet identified in paragraph (3)(H)-(J)
of this subsection shall be completed in accordance with the 1999 NAIC Annual
Statement Diskette Filing Specifications--Property and Casualty.
(1)
Reports to be filed both with the department and the NAIC:
(A)
Annual Statement (association edition, with a yellow colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000;
(B)
Management's Discussion and Analysis (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000;
(C)
Financial Guaranty Insurance Exhibit (association edition)
(required of companies writing financial guaranty business), the 8 1/2 inch
by 14 inch size, to be filed on or before March 1, 2000;
(D)
Supplement "A" to Schedule T, Exhibit of Medical Malpractice
Premiums Written (association edition) (required of companies writing medical
malpractice business), the 8 1/2 inch by 14-inch size, to be filed on or before
March 1, 2000;
(E)
Property and Casualty Quarterly Statement (association
edition) the 8 1/2 inch by 14 inch size, to be filed on or before May 15,
August 15, and November 15, 2000;
(F)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items; required of all companies), to be attached to the annual statement
required by subparagraph (A) of this paragraph; and
(G)
Combined Property/Casualty Annual Statement (association
edition, with a yellow colored cover made of minimum 65 lb. paper), the 8
1/2 inch by 14-inch size, to be filed on or before May 1, 2000, including
the Insurance Expense Exhibit. This form is required only for those affiliated
insurers that wrote more than $35 million in direct premiums as a group in
1999, as defined in Schedule T of the Annual Statement.
(2)
Reports to be filed only with the department:
(A)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
the 8 1/2 inch by 14 inch size, to be filed on or before March 1, 2000;
(B)
Supplemental Compensation Exhibit (association edition),
the 8 1/2 inch by 14 inch size (required of Texas domestic companies only),
to be filed on or before March 1, 2000;
(C)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), as an attachment
to page six of the annual statement required by paragraph (1)(A) of this subsection,
to be filed on or before March 1, 2000;
(D)
Annual Statement (Texas edition, with a green colored cover
made of minimum 65 lb. paper) (required of companies writing prepaid legal
business in 1999), the 8-1/2 inch by 14-inch size, to be filed on or before
March 1, 2000;
(E)
Affidavit in Lieu of Annual Statement (Texas edition) (required
of companies authorized to write prepaid legal business that did not write
such business in 1999), to be filed on or before March 1, 2000;
(F)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2000;
(G)
Analysis of Surplus (Texas edition) for property and casualty
insurers (required of all licensed companies, except Texas domestic county
mutual companies), to be filed on or before March 1, 2000;
(H)
Supplement for County Mutuals (Texas edition) (required
of Texas domestic county mutual companies, as an attachment to page sixteen
of the annual statement as required by paragraph (1)(A) of this subsection),
to be filed on or before March 1, 2000; and
(I)
Texas Supplemental A for County Mutuals (Texas edition)
(required of Texas domestic county mutual companies, as an attachment to page
nine of the annual statement as required by paragraph (1)(A) of this subsection,
to be filed on or before March 1, 2000.
(J)
The Texas Windstorm Insurance Association (Insurance Code
Article §21.49) shall complete and file the following only:
(i)
Annual Statement (association edition, with a yellow colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000, except as provided by paragraph (4) of this
subsection;
(ii)
Property and Casualty Quarterly Statement (association
edition), the 8 1/2 inch by 14 inch size, to be filed on or before May 15,
August 15, and November 15, 2000; and
(iii)
Management's Discussion and Analysis (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000.
(3)
Reports, diskettes, or electronic filings
via the Internet filed only with the NAIC:
(A)
Trusteed Surplus Statement (association edition, Property
and Casualty Supplement) (required of the U. S. branch of an alien insurer),
8 1/2 inch by 14-inch size to be filed on or before March 1, May 15, August
15, and November 15, 2000;
(B)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare business), to be filed on or before
March 1, 2000;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2000;
(D)
Insurance Expense Exhibit (association edition), the 8
1/2 inch by 14 inch size, to be filed on or before April 1, 2000;
(E)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit accident and/or health business), 8
1/2 inch by 14 inch size, to be filed on or before April 1, 2000;
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), the 8 1/2
inch by 14 inch size, to be filed on or before April 1, 2000;
(G)
Schedule DC (association edition) (for insurers engaged
in insurance options and futures), the 8 1/2 inch by 14 inch size, to be filed
on or before March 1, 2000;
(H)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2000;
(I)
Diskettes or electronic filings via the Internet containing
combined annual statement data, to be filed on or before May 1, 2000; and
(J)
Diskettes or electronic filings via the Internet containing
computerized quarterly statement data, to be filed on or before May 15, August
15, and November 15, 2000.
(4)
The following provisions shall apply to all filings
required by paragraphs (1)-(3) of this subsection.
(A)
No loss reserve discounts, other than as respects fixed
and determinable payments such as those emanating from workers' compensation
tabular indemnity reserves and long-term disability claims for which specific
segregated investments have been established, shall be allowed. The commissioner
shall have the authority to determine the appropriateness of, and may disallow,
such discounts.
(B)
The commissioner shall have the authority to determine
the appropriateness of, and may disallow, anticipated salvage and subrogation.
(C)
Texas domestic insurers that write only in Texas may apply
for an alternative basis of calculating the excess of statutory reserves over
statement reserves, also known as the Schedule P penalty reserve, by submitting
a request to the Chief Property and Casualty Actuary of the Financial Program
which outlines the reasons and basis for such request. The request should
be mailed to the Chief Property and Casualty Actuary, Texas Department of
Insurance, Financial Program, MC 305-3A P.O. Box 149104, Austin, Texas 78714-9104.
Requests must be submitted to the department on or before January 31, 2000.
(D)
The 1999 NAIC Annual Statement Instructions, Property and
Casualty provide that certain schedules be filed only with the state of domicile,
the NAIC and any other state requesting such filings. The department requires
the filing of a paper copy of such schedules for domestic and foreign insurers.
(f)
Requirements for fraternal benefit societies. Each fraternal
benefit society shall complete and file the following blanks, forms, and diskettes
or electronic filings for the 1999 calendar year and the first three quarters
of the 2000 calendar year. The forms, reports, and diskettes identified in
paragraphs (1)(A)-(D); (2)(A),(B); and (3)(A)-(F), (H) of this subsection
shall be completed in accordance with the 1999 NAIC Annual Statement Instructions,
Fraternal, except as provided by paragraph (4) of this subsection. The diskettes
or electronic filings identified in paragraph (3)(G) of this subsection shall
be completed in accordance with the 1999 NAIC Annual Statement Diskette Filing
Specifications-Fraternal, except as provided by paragraph (4) of this subsection.
(1)
Reports to be filed both with the department and the NAIC:
(A)
Annual Statement (association edition, with a brown colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000;
(B)
Annual Statement of the Separate Accounts (association
edition, with a green colored cover made of minimum 65 lb. paper) (required
of companies maintaining separate accounts), the 8 1/2 inch by 14-inch size,
to be filed on or before March 1, 2000;
(C)
Management's Discussion and Analysis (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000;
and
(D)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items; to be filed by all companies), to be attached to the annual statement
required by subparagraph (A) of this paragraph.
(2)
Reports to be filed only with the department:
(A)
Quarterly statement (association edition), the 8 1/2 inch
by 14 inch size, to be filed on or before May 15, August 15, and November
15, 2000;
(B)
Supplemental Compensation Exhibit (association edition),
the 8 1/2 inch by 14 inch size, (required of Texas domestic companies only),
to be filed on or before March 1, 2000;
(C)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2000;
(D)
Analysis of Surplus (Texas edition) for fraternal benefit
societies, to be filed on or before March 1, 2000;
(E)
Fraternal Benefit Societies Supplement to Valuation Report
(Association edition) to be filed on or before June 30, 2000; and
(F)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment, as an attachment
to page ten of the annual statement as required by paragraph (1)(A) of this
subsection), to be filed on or before March 1, 2000.
(3)
Reports and diskettes or electronic filings via
the Internet to be filed only with the NAIC:
(A)
Trusteed Surplus Statement (association edition, Fraternal
Supplement) (required of the U. S. branch of an alien insurer), 8 1/2 inch
by 14-inch size to be filed on or before March 1, May 15, August 15, and November
15, 2000;
(B)
Medicare Supplement Insurance Exhibit (association edition)
(for insurers writing Medicare business) to be filed on or before March 1,
2000;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2000;
(D)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), the 8 1/2 inch by
14 inch size, to be filed on or before March 1, 2000;
(E)
Schedule DS (association edition) (required only of companies
that have included "equity in the undistributed income of the subsidiary"
in "net gain from operations"), the 8 1/2 inch by 14 in size, to be filed
on or before March 1, 2000;
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), the 8 1/2
inch by 14-inch size, to be filed on or before April 1, 2000;
(G)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2000;
and
(H)
Fraternal Interest Sensitive Life Insurance Products Report
(association edition) (required of companies writing interest sensitive products),
the 8 1/2 inch by 14 inch size, to be filed on or before April 1, 2000.
(4)
The following provisions shall apply to the filings
required in paragraph (1)-(3) of this subsection.
(A)
Texas domestic fraternal companies with more than $30 million
in direct premiums in 1999 must establish Asset Valuation Reserves and Interest
Maintenance Reserves in their financial statements in accordance with the
instructions in the 1999 NAIC Annual Statement Instructions, Fraternal. Texas
domestic fraternal companies with $30 million or less in direct premiums may
establish Asset Valuation Reserves and Interest Maintenance Reserves in their
financial statements in accordance with the instructions in the 1999 NAIC
Annual Statement Instructions, Fraternal or they must value bonds and preferred
stocks in compliance with the provisions of §7.16 of this title (relating
to NAIC Purposes and Procedures of the Securities Valuation Office Manual)
concerning companies not maintaining an Asset Valuation Reserve or Interest
Maintenance Reserve. Since fraternals are not subject to Article 3.28 Section
2A, Texas Insurance Code, the statement of actuarial opinion for fraternals
should follow instructions 1-12, established by the NAIC.
(B)
The 1999 NAIC Annual Statement Instructions, Fraternal
provide that certain schedules be filed only with the state of domicile, the
NAIC and any other state requesting such filings. The department requires
the filing of a paper copy of such schedules for domestic and foreign insurers.
(g)
Requirements for title insurers. Each title insurance company
shall complete and file the following blanks and forms for the 1999 calendar
year and the first three quarters of the 2000 calendar year. The reports and
forms identified in paragraphs (1)(A)-(D); (2)(A) and (E); and (3)(A) of this
subsection shall be completed in accordance with the 1999 NAIC Annual Statement
Instructions, Title, except as otherwise provided by subsection (b) of this
section. The diskette or electronic filings via the Internet identified in
paragraph (3)(B) of this subsection shall be completed in accordance with
the 1999 NAIC Annual Statement Diskette Filing Specifications, Title, except
as provided by paragraph (4) of this subsection.
(1)
Reports to be filed with the department and the NAIC:
(A)
Annual Statement (association edition, with a salmon colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000;
(B)
Management's Discussion and Analysis (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000;
(C)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items; required of all companies), to be attached to the annual statement
required by subparagraph (A) of this paragraph; and
(D)
Title Quarterly Statement (association edition), the 8
1/2 inch by 14 inch size, to be filed on or before May 15, August 15, and
November 15, 2000.
(2)
Reports to be filed only with the department:
(A)
Supplemental Compensation Exhibit (association edition),
the 8 1/2 inch by 14 inch size, (required of Texas domestic companies only),
to be filed on or before March 1, 2000;
(B)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2000;
(C)
Analysis of Surplus (Texas edition) for title insurers
to be filed on or before March 1, 2000;
(D)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment, as an attachment
to page six of the annual statement as required in paragraph (1)(A) of this
subsection), to be filed on or before March 1, 2000; and
(E)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
the 8 1/2 inch by 14 inch size, to be filed on or before March 1, 2000.
(3)
Reports to be filed only with the NAIC.
(A)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2000;
(B)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2000.
(4)
The 1999 NAIC Annual Statement Instructions,
Title provide that certain schedules be filed only with the state of domicile,
the NAIC and any other state requesting such filings. The department requires
the filing of a paper copy of such schedules for domestic and foreign insurers.
(h)
Requirements for health maintenance organizations. Each
health maintenance organization and non-profit health corporation shall complete
and file the following blanks and forms, and diskettes for the 1999 calendar
year and the first three quarters of the 2000 calendar year. The forms, reports,
and diskettes identified in paragraphs (1)(A)-(D) and (2)(A) and (B) of this
subsection shall be completed in accordance with the 1999 NAIC Annual Statement
Instructions, Health Maintenance Organizations and the NAIC Accounting and
Practices Procedures Manual for Health Maintenance Organizations (June, 1991).
The actuarial opinion required to be completed in accordance with the 1999
NAIC Annual Statement Instructions, Health Maintenance Organizations shall
include the additional requirements of the department in paragraph (1)(C)
of this subsection. The forms, reports, and diskettes identified in paragraphs
(1)(A), (2)(B), (C), (E) and (F) of this subsection shall be completed in
accordance with Annual and Quarterly HMO Supplement Instructions provided
by the department. The diskettes or electronic filings identified in paragraph
(3) of this subsection shall be completed in accordance with the 1999 NAIC
Annual Diskette Filing Specifications, Health Maintenance Organization.
(1)
Reports to be filed both with the department and the NAIC:
(A)
Annual Statement (association edition, with an orange colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before March 1, 2000;
(B)
Management's Discussion and Analysis, (a narrative document
setting forth information which enables regulators to enhance their understanding
of the insurer's financial position, results of operations, changes in capital
and surplus accounts and cash flow), to be filed on or before April 1, 2000;
(C)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items; to be filed by all health maintenance organizations), to be attached
to the annual statement required by subparagraph (A) of this paragraph. In
addition to the requirements set forth in the 1999 NAIC Annual Statement Instructions,
Health Maintenance Organizations, the department requires that the actuarial
opinion include the following:
(i)
The statement of actuarial opinion must include assurance
that an actuarial report and underlying actuarial workpapers supporting the
actuarial opinion will be maintained at the company and available for examination
for seven years. The foregoing must be available by May 1 of the year following
the year end for which the opinion was rendered or within two weeks after
a request from the commissioner. The suggested wording used will depend on
whether the actuary is employed by the company or is a consulting actuary.
The wording for an actuary employed by the company should be similar to the
following: "An actuarial report and any underlying actuarial workpapers supporting
the findings expressed in this Statement of Actuarial Opinion will be retained
for a period of seven years in the administrative offices of the company and
available for regulatory examination." The wording for a consulting actuary
retained by the company should be similar to the following: "An actuarial
report and any underlying actuarial workpapers supporting the findings expressed
in this Statement of Actuarial Opinion have been provided to the company to
be retained for a period of seven years in the administrative offices of the
company and available for regulatory examination."
(ii)
Under the scope paragraph requirements of section 5 of
the instructions relating to the Actuarial Certification in the 1999 NAIC
Annual Statement Instructions, Health Maintenance Organizations, the department
requires that the actuarial opinion specifically list the premium deficiency
reserve as an item and disclose the amount of such reserve; and
(D)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare business) to be filed on or before
March 1, 2000.
(2)
Reports to be filed only with the department:
(A)
Supplemental Compensation Exhibit (association edition),
the 8 1/2 inch by 14 inch size, (required of Texas domestic companies only),
to be filed on or before March 1, 2000;
(B)
HMO Quarterly Statement (association edition), the 8 1/2
inch by 14 inch size, together with quarterly data of Schedule E-Part 2--Special
Deposits, from the NAIC HMO Annual Statement Blank, to be filed on or before
May 15, August 15, and November 15, 2000;
(C)
HMO Supplement (Texas edition), the 8 1/2 inch by 14 inch
size, to be filed on or before March 1, 2000. Exhibit II and Exhibit VI of
the HMO Supplement are to be filed quarterly on or before March 1, 2000 and
May 15, August 15, November 15, 2000;
(D)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2000;
(E)
Department formatted diskettes containing annual statement
data (diskettes provided by the department for entering of health maintenance
organization or non-profit health corporation financial statement data), to
be completed according to the instructions provided by the department and
filed with the department on or before March 1, 2000; and
(F)
Department formatted diskettes containing quarterly statement
data (diskettes provided by the department for entering of health maintenance
organization or non-profit health corporation financial statement data), to
be completed according to the instructions provided by the department and
filed with the department on or before May 15, August 15, and November 15,
2000.
(3)
Reports and diskettes or electronic filings via
the Internet to be filed only with the NAIC. The diskettes containing computerized
annual statement data must be filed on or before March 1, 2000. If utilizing
Internet filing, it is not necessary to submit a diskette to the NAIC.
(4)
The 1999 NAIC Annual Statement Instructions, Health
Maintenance Organization provide that certain schedules be filed only with
the state of domicile, the NAIC and any other state requesting such filings.
The department requires the filing of a paper copy of such schedules for domestic
and foreign insurers.
(i)
Requirements for farm mutual insurers not subject to the
provisions of subsection (e) of this section relating to filing requirements
for property and casualty insurers. Each farm mutual insurance company shall
file the following completed blanks and forms for the 1999 calendar year with
the department only:
(1)
Annual statement (Texas edition, with a tan colored cover
made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be filed
on or before March 1, 2000;
(2)
Texas Overhead Assessment Form (Texas edition), to
be filed on or before March 1, 2000;
(3)
Actuarial Opinion (the statement of a qualified actuary,
setting forth his or her opinion relating to policy reserves and other actuarial
items), to be attached to the annual statement required by paragraph (1) of
this subsection, unless otherwise exempted.
(j)
Requirements for mutual assessment companies, mutual aid
and mutual burial associations, and exempt companies. Each statewide mutual
assessment company, local mutual aid association, local mutual burial association,
and exempt company shall file the following completed blanks and forms for
the 1999 calendar year with the department only:
(1)
Annual Statement (Texas edition, with an orange colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be
filed on or before April 1, 2000; provided, however, exempt companies are
not required to complete lines 22, 23, 24, 25, and 26 on page 3, the special
instructions at the bottom of page 3, and pages 4, 5, 6, and 7. All other
pages are required;
(2)
Texas Overhead Assessment Form (Texas edition), to
be filed on or before April 1, 2000;
(3)
Release of Contributions Form (Texas edition), to
be filed on or before April 1, 2000;
(4)
3 1/2 % Chamberlain Reserve Table (Reserve Valuation)
(Texas edition), to be filed on or before April 1, 2000;
(5)
Reserve Summary (1956 Chamberlain Table 3 1/2 %) (Texas
edition), to be filed on or before April 1, 2000;
(6)
Inventory of Insurance in Force by Age of Issue or
Reserving Year (Texas edition), to be filed on or before April 1, 2000; and
(7)
Summary of Inventory of Insurance in Force by Age
and Calculation of Net Premiums (Texas edition), to be filed on or before
April 1, 2000.
(k)
Requirements for non-profit legal service corporations.
Each non-profit legal service corporation shall file the following completed
blanks and forms for the 1999 calendar year with the department only;
(1)
Annual Statement (Texas edition with a green colored cover
made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size, to be filed
on or before March 1, 2000; and
(2)
Texas Overhead Assessment Form, to be filed on or
before March 1, 2000.
(l)
Requirements for Mexican casualty companies. Each Mexican
casualty company doing business as authorized by a certificate of authority
issued under the Insurance Code, Article 8.24, shall complete and file the
following blanks and forms for the 1999 calendar year with the department
only. All submissions shall be printed or typed in English and all monetary
values shall be clearly designated in United States dollars. The form identified
in paragraph (1) of this subsection shall be completed in accordance with
the 1999 NAIC Annual Statement Instructions, Property and Casualty, except
as provided by this section. An actuarial opinion is not required. It is the
express intent of this subsection that it shall not repeal or otherwise modify
or amend any department rule or the Insurance Code. The blanks or forms are
as follows:
(1)
Annual Statement (association edition, with a yellow colored
cover made of minimum 65 lb. paper), the 8 1/2 inch by 14 inch size; provided,
however, only pages 1-4, 15-19 and 130 are required to be completed and filed
on or before March 1, 2000;
(2)
A copy of the balance sheet and the statement of profit
and loss from the Mexican financial statement (printed or typed in English),
to be filed on or before March 1, 2000;
(3)
A copy of the official documents issued by the COMISION
NACIONAL DE SEGUROS Y FIANZAS approving the 1999 annual statement, to be filed
on or before June 30, 2000; and
(4)
A copy of the current license to operate in the Republic
of Mexico, to be filed on or before March 1, 2000.
(m)
Other financial reports. Nothing in this section prohibits
the department from requiring any insurer or other regulated entity from filing
other financial reports with the department.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on January 27, 2000.
TRD-200000589
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: February 16, 2000
Proposal publication date: December 17, 1999
For further information, please call: (512) 463-6327