Texas Register
(26 TexReg 66).
The section provides instructions to be used by insurers and certain other
entities regulated by the Texas Department of Insurance when reporting their
financial condition and business operations and activities during 2001 and
the requirement to file such completed statement blanks and other reporting
forms, including diskettes or electronic filings with the NAIC via the internet.
The annual and quarterly statement blanks, other reporting forms, and diskettes
or electronic filings with the NAIC via the Internet are required by statute
for reporting, in 2001 and 2002, the financial condition and business operations
and activities conducted during the 2001 calendar year. 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 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 that are used only by the department. Some of
these forms are not included, but the department intends to have these forms
updated later in 2001 and will propose an amendment to this section no later
than December 31, 2001 to adopt the forms by reference. 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.
The new section defines terms relevant to the statement blanks and reporting
forms; provides the dates by which certain reports are to be filed; 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 was changed to provide consistency and to correct a typographical
error in §7.70(l)(1). Page 130 was changed to page 132.
No comments were received.
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 National Association of Insurance
Commissioners. 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 rulemaking
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.
§7.71.Requirements for Filing the 2001 Quarterly and 2001 Annual 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 2001 quarterly statements, and 2001
annual statement, other reporting forms, and diskettes or electronic filings
with the National Association of Insurance Commissioners (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; U.S. Branch of an alien insurer; Mexican casualty 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; farm mutual insurers with gross
premiums in excess of $5 million; 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 2001 quarterly statement blanks, the 2001 annual statement blanks and
the related 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 Analysis and Examinations Activity,
Mail Code 303-1A, P. O. Box 149099, Austin, Texas 78714-9099. Insurers and
other regulated entities shall properly report to the department 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
the NAIC via the Internet following the applicable instructions as outlined
in subsections (d) - (j) of this section.
(b)
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
NAIC.
(2)
Commissioner - The commissioner of insurance appointed
under the Texas Insurance Code.
(3)
Department - The Texas Department of Insurance.
(4)
Texas edition - Blanks and forms promulgated by the commissioner.
(c)
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 instructions listed
in this section, then and in that event, the Insurance Code, the department's
promulgated rule, form, instruction, or the specific requirement of subsections
(d) - (j) of this section shall take precedence and in all respects control.
(d)
Filing requirements for life, accident and health insurers.
Each life, life and accident, life and health, accident, 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 as directed in this subsection.
The forms and reports identified in paragraphs (1)(A)-(C); (1)(F) and (G);
(2)(A)-(C); and (3)(A)-(I) of this subsection shall be completed in accordance
with the 2001 NAIC Annual Statement Instructions, Life, Accident and Health,
except as provided by subsection (b) of this section. The forms and reports
identified in paragraphs (1)(D)-(G); (2)(A) and (B); (3)(B), (C), (E) and
(F) of this subsection shall be completed in accordance with the 2001 NAIC
Health Annual Statement Instructions, except as provided by subsection (b)
of this section. The diskettes or electronic version of the filings with the
NAIC via the Internet identified in paragraph (3)(J) and (K) of this subsection
shall be in accordance with the NAIC data specifications and instructions
on the NAIC web site. The electronic filings with the NAIC shall include PDF
format filing. Life, Accident and Health companies that wrote 100% of their
total direct premiums as health premiums for the calendar year ending December
31, 2000 may elect to file on the new health annual statement blank for the
three quarters of 2001 and the calendar year 2001 if the insurer meets the
definition of writing only "health" premiums in the 2001 NAIC Health Annual
Statement Instructions. Those instructions describe health premiums to include
hospital, surgical and major medical; Medicare supplement business reportable
in the Medicare Supplement Insurance Experience Exhibit of the annual statement;
dental and vision only coverage issued as stand alone or as a rider to a medical
policy that is not related to the medical policy through deductibles or out
of pocket limits; federal employees health benefits plan premiums (FEHBP);
Title XVIII - Medicare premiums which result from arrangements with the Health
Care Financing Administration (HCFA) on a cost or risk basis, for services
to a Medicare beneficiary; Title XIX - Medicaid premiums that result from
an arrangement between the company and a Medicaid state agency for services
to a Medicaid beneficiary; and other health premiums such as stop loss, disability
income, long term care, and prescription drug plans and coverages. If a reporting
entity elects to use the health annual statement, it must continue to use
that annual statement for a minimum of three years or obtain written approval
from its domestic state to change to another type of annual statement. Foreign
companies that wrote less than 100% of health premiums in 2000 may elect to
file on the health annual statement blank if permitted or required by their
domicilary state.
(1)
Reports to be filed both with the department and the NAIC
include the following:
(A)
2001 Life, Accident and Health Annual Statement (association
edition) for the 2001 calendar year to be filed on or before March 1, 2002
(stipulated premium insurance companies, April 1, 2002);
(B)
2001 Life, Accident and Health Annual Statement of the
Separate Accounts (association edition) for the 2001 calendar year (required
of companies maintaining separate accounts), to be filed on or before March
1, 2002 (stipulated premium insurance companies, April 1, 2002);
(C)
2001 Life, Accident and Health Quarterly Statements (association
edition), to be filed on or before May 15, August 15, and November 15, 2001.
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.
(D)
2001 Health Quarterly Statements (association edition),
to be filed on or before May 15, August 15, and November 15, 2001 if the company
qualifies as described in this subsection;
(E)
2001 Health Annual Statement (association edition) for
the 2001 calendar year, to be filed on or before March 1, 2002 (stipulated
premium insurance companies, April 1, 2002) if the company qualifies as described
in this subsection;
(F)
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 with the 2001 Life, Accident
and Health Annual Statement on or before April 1, 2002, or if the 2001 Health
Annual Statement is required, then filed with the 2001 Health Annual Statement
on or before April 1, 2002;
(G)
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 Life, Accident and
Health Annual Statement or if required, the Health Annual Statement as applicable;
(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),
to be filed on or before March 1, 2002. This filing is also required if filing
a Health Annual Statement, as applicable;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2002 (stipulated premium companies, April 1, 2002). This filing is also
required if filing a Health Annual Statement, as applicable;
(C)
The Texas Health Insurance Risk Pool shall file the 2001
Life, Accident and Health Annual and Quarterly Statements as follows:
(i)
2001 Life, Accident and Health Annual Statement (association
edition), blue colored cover, to be filed on or before March 1, 2002. 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; and
(ii)
2001 Life, Accident and Health Quarterly Statement (association
edition), to be filed on or before May 15, August 15, and November 15, 2001.
(iii)
The Texas Health Insurance Risk Pool is not required
to file any 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),
to be filed on or before May 15, August 15, November 15, 2001 and March 1,
2002 with the annual statement;
(B)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business), to be filed
on or before March 1, 2002. This filing is also required if filing a Health
Annual Statement, as applicable;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2002 (stipulated premium insurance companies,
April 1, 2002). This filing is also required if filing a Health Annual Statement,
as applicable;
(D)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit business), to be filed on or before
April 1, 2002;
(E)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), to be filed on or
before March 1, 2002 (stipulated premium insurance companies, April 1, 2002).
This filing is also required if filing a Health Annual Statement, as applicable;
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2002. This filing is also required if filing a Health
Annual Statement, as applicable;
(G)
Interest Sensitive Life Insurance Products Report (association
edition) (required of companies writing interest sensitive products), to be
filed on or before April 1, 2002;
(H)
Life, Health and Annuity Guaranty Association Model Act
Assessment Base Reconciliation Exhibit (association edition), to be filed
on or before April 1, 2002;
(I)
Adjustments to the Life, Health and Annuity Guaranty Association
Model Act Assessment Base Reconciliation Exhibit (association edition), to
be filed on or before April 1, 2002;
(J)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2002
(stipulated premium insurance companies, April 1, 2002); and
(K)
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, 2001. 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 2001 must establish Asset Valuation
Reserves (AVR) and Interest Maintenance Reserves (IMR) in their financial
statements in accordance with the instructions in the 2001 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 2001 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)(G) 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).
(e)
Requirements for property and casualty insurers. Each fire,
fire and marine, general casualty, fire and casualty, or U.S. Branch of an
alien insurer, 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 for the 2000 calendar year or had gross written
premiums in 2001 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 as directed by this subsection. The
forms and reports identified in paragraphs (1)(A)-(G); (2)(A)-(C); and (3)(A)-(F)
of this subsection shall be completed in accordance with the 2001 NAIC Annual
Statement Instructions, Property and Casualty, except as provided by paragraph
(4) of this subsection. The diskettes or electronic version of the filings
with the NAIC via the Internet identified in paragraph (3)(G)-(I) of this
subsection shall be in accordance with the NAIC data specifications. The electronic
filings with the NAIC shall include PDF format filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
2001 Property and Casualty Annual Statement (association
edition), to be filed on or before March 1, 2002;
(B)
2001 Property and Casualty Quarterly Statements (association
edition), to be filed on or before May 15, August 15, and November 15, 2001;
(C)
2001 Combined Property/Casualty Annual Statement (association
edition), to be filed on or before May 1, 2002, 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 calendar year 2001,
as disclosed in Schedule T of the Annual Statement(s);
(D)
Supplement "A" to Schedule T, Exhibit of Medical Malpractice
Premiums Written (association edition) (required of companies writing medical
malpractice business), to be filed on or before March 1, 2002;
(E)
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, 2002;
(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;
and
(G)
Financial Guaranty Insurance Exhibit (association edition)
(required of companies writing financial guaranty business), to be filed on
or before March 1, 2002;
(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),
to be filed on or before March 1, 2002;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2002;
(C)
The Texas Windstorm Insurance Association (Insurance Code
Article §21.49) shall complete and file the following only:
(i)
Annual Statement (association edition), to be filed on
or before March 1, 2002, except as provided by paragraph (4) of this subsection;
(ii)
Property and Casualty Quarterly Statement (association
edition), to be filed on or before May 15, August 15, and November 15, 2001;
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, 2002.
(3)
Reports, diskettes, or electronic filings via the Internet
filed only with the NAIC:
(A)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business), to be filed
on or before March 1, 2002;
(B)
Trusteed Surplus Statement (association edition) (required
of the U. S. branch of an alien insurer), to be filed on or before May 15,
August 15, November 15, 2001, and March 1, 2002 with the annual statement;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2002;
(D)
Insurance Expense Exhibit (association edition), to be
filed on or before April 1, 2002;
(E)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit accident and/or health business), to
be filed on or before April 1, 2002;
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2002;
(G)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2002;
(H)
Diskettes or electronic filings via the Internet containing
combined annual statement data, to be filed on or before May 1, 2002; and
(I)
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, 2001.
(4)
The following provisions shall apply to all filings required
by paragraphs (1) - (3) of this subsection.
(A)
No loss reserve discounts, other than 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.
(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 2001 calendar year and the three quarters for
the 2001 calendar year. The forms, reports, and diskettes identified in paragraphs
(1)(A)-(D), (2)(A)-(C), and (3)(A)-(E) and (G) of this subsection shall be
completed in accordance with the 2001 NAIC Annual Statement Instructions,
Fraternal, except as provided by paragraph (4) of this subsection. The diskettes
or electronic version of the filings with the NAIC via the Internet identified
in paragraph (3)(F) of this subsection shall be in accordance with the NAIC
data specifications. The electronic filings with the NAIC shall include PDF
format filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
Annual Statement, Fraternal (association edition), to be
filed on or before March 1, 2002;
(B)
Annual Statement of the Separate Accounts, Fraternal, (association
edition) (required of companies maintaining separate accounts), to be filed
on or before March 1, 2002;
(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, 2002;
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)
Fraternal Quarterly statement (association edition), to
be filed on or before May 15, August 15, and November 15, 2001;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2002;
(C)
Fraternal Benefit Societies Supplement to Valuation Report
(association edition) to be filed on or before June 30, 2002; and
(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), to be filed
on or before March 1, 2002 with the annual statement;
(B)
Medicare Supplement Insurance Exhibit (association edition)
(for insurers writing Medicare supplement business) to be filed on or before
March 1, 2002;
(C)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2002;
(D)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), to be filed on or
before March 1, 2002;
(E)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2002;
(F)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2002;
and
(G)
Fraternal Interest Sensitive Life Insurance Products Report
(association edition) (required of companies writing interest sensitive products),
to be filed on or before April 1, 2002.
(4)
The following provisions shall apply to the filings required
in paragraph (1) - (3) of this subsection. Texas domestic fraternal companies
with more than $30 million in direct premiums in 2001 must establish Asset
Valuation Reserves and Interest Maintenance Reserves in their financial statements
in accordance with the instructions in the 2001 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 2001 NAIC Annual Statement Instructions, Fraternal 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 Asset Valuation Reserve or Interest Maintenance Reserve.
Since fraternals are not subject to Insurance Code Article 3.28 Section 2A,
the statement of actuarial opinion for fraternals should follow instructions
1 - 12, established by the NAIC.
(g)
Requirements for title insurers. Each title insurance company
shall complete and file the following blanks and forms for the 2001 calendar
year and the three quarters of the 2001 calendar year. The reports and forms
identified in paragraphs (1)(A)-(C), (2)(A)-(C), and (3)(A) of this subsection
shall be completed in accordance with the 2001 NAIC Annual Statement Instructions,
Title, except as otherwise provided by subsection (b) of this section. The
diskettes or electronic version of the filings with the NAIC via the Internet
identified in paragraph (3)(B) of this subsection shall be in accordance with
the NAIC data specifications. The electronic filings with the NAIC shall include
PDF format filing.
(1)
Reports to be filed with the department and the NAIC:
(A)
Title Annual Statement (association edition), to be filed
on or before March 1, 2002;
(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, 2002;
and
(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.
(2)
Reports to be filed only with the department:
(A)
Title Quarterly Statement (association edition), to be
filed on or before May 15, August 15, and November 15, 2001;
(B)
Supplemental Compensation Exhibit (association edition),
(required of Texas domestic companies only), to be filed on or before March
1, 2002; and
(C)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
to be filed on or before March 1, 2002.
(3)
Reports to be filed only with the NAIC:
(A)
Officers and Directors Information (association edition),
to be filed on or before March 1, 2002; and
(B)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2002.
(h)
Requirements for health maintenance organizations and non-profit
health corporation. The HMO annual and quarterly blank used for the year ending
December 31, 2000 and prior periods is no longer available and will no longer
be used. Therefore, HMOs must use the new NAIC Health Annual Statement beginning
with the reporting quarter ending March 31, 2001. Each health maintenance
organization and non-profit health corporation shall complete and file the
following blanks and forms, and diskettes for the 2001 calendar year and the
three quarters of the 2001 calendar year. The forms, reports, and diskettes
identified in paragraphs (1)(A)-(E) and (2)(A) of this subsection shall be
completed in accordance with the 2001 NAIC Annual and Quarterly Statement
Instructions, Health. The actuarial opinion shall include the additional requirements
of the department set forth in paragraph (1)(D) of this subsection. The forms,
reports, and diskettes identified in paragraphs (1)(A) and (B), and (2)(B),
(C), and (D) of this subsection shall be completed in accordance with instructions
provided by the department. The diskettes or electronic version of the filings
with the NAIC via the Internet identified in paragraph (3) of this subsection
shall be in accordance with NAIC data specifications and instructions through
the NAIC web site. The electronic filings with the NAIC shall include PDF
format filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
2001 Health Annual Statement (association edition), to
be filed on or before March 1, 2002;
(B)
NAIC Health Quarterly Statements (association edition),
on or before May 15, August 15, and November 15, 2001. As part of each quarterly
filing, include a completed copy of Schedule E - part 2 - Special Deposits,
from the 2001 NAIC Health Annual Statement;
(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, 2002;
(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 health maintenance organizations), to be attached
to the annual statement. In addition to the requirements set forth in the
2001 NAIC Annual Statement Instructions, Health, 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 2001 NAIC
Annual Statement Instructions, Health, the department requires that the actuarial
opinion specifically list the premium deficiency reserve as an item and disclose
the amount of such reserve; and
(E)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business) to be filed on
or before March 1, 2002.
(2)
Reports to be filed only with the department:
(A)
Supplemental Compensation Exhibit (association edition),
(required of Texas domestic companies only), to be filed on or before March
1, 2002;
(B)
HMO Supplement (Texas edition), to be filed quarterly on
or May 15, August 15, November 15, 2001;
(C)
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, 2002; and
(D)
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,
2001.
(3)
Reports and diskettes or electronic filings via the Internet
to be filed only with the NAIC.
(A)
Diskettes or electronic filings via the Internet containing
computerized annual statement data, to be filed on or before March 1, 2002;
(B)
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, 2001.
(i)
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 2001 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 2001 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); provided, however,
only pages 1 - 4, 15 - 19 and 132 are required to be completed and filed on
or before March 1, 2002;
(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, 2002;
(3)
A copy of the official documents issued by the COMISION
NACIONAL DE SEGUROS Y FIANZAS approving the 2001 annual statement, to be filed
on or before June 30, 2002; and
(4)
A copy of the current license to operate in the Republic
of Mexico, to be filed on or before March 1, 2002.
(j)
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 February 7, 2001.
TRD-200100834
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: February 27, 2001
Proposal publication date: January 5, 2001
For further information, please call: (512) 463-6327