reglab/statecodes huggingface dataset:
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter C. Examiners and Actuaries › Section 401.107. Registration of Contract Examiners

Sec. 401.107.  REGISTRATION OF CONTRACT EXAMINERS.  (a)  A person with whom another state contracts to perform any examination initiated by the other state of an insurer domiciled in this state shall register with and provide the following information to the department's chief examiner:
(1)  the person's name;
(2)  if the person is not an individual, the identity of each examiner or other person who will perform any part of the examination;
(3)  the name of the state that contracted with the person;
(4)  the identity of the insurer to be examined;
(5)  a description of each issue that the person has been contracted to examine;
(6)  an estimate of the examination costs to be charged to the insurer to be examined;
(7)  a copy of any contract between the person and the state regulatory body that initiated the examination and a letter authorizing the examination; and
(8)  a list of the previous examinations conducted on the same insurer on behalf of any state within the last three years.
(a-1)  On accepting a person's registration under Subsection (a), the department shall send written confirmation of the acceptance to:
(1)  the person;
(2)  the insurer to be examined; and
(3)  the state regulatory body that initiated the examination.
(b)  It is a violation of this code for a person to accept compensation from multiple states for the same examination, if doing so results in duplicative costs to the insurer being examined.  It is not a violation of this code for:
(1)  an examiner to conduct an examination of an insurer for the benefit of multiple states in a coordinated examination; and
(2)  the examiner to accept compensation from the states participating in the coordinated examination to reduce the examination costs to the insurer being examined.
Added by Acts 2009, 81st Leg., R.S., Ch. 1030 (H.B. 4359), Sec. 2, eff. June 19, 2009.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 185 (S.B. 1229), Sec. 1, eff. May 28, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.151. Expenses of Examination of Domestic Insurer

Sec. 401.151.  EXPENSES OF EXAMINATION OF DOMESTIC INSURER.  (a)  A domestic insurer examined on behalf of this state by the department or under the department's authority shall pay the expenses of the examination in an amount the commissioner certifies as just and reasonable.
(b)  The department shall collect an assessment at the time of the examination to cover all expenses attributable directly to that examination, including:
(1)  the salaries and expenses of department employees; and
(2)  expenses described by Section 803.007.
(c)  The department shall also impose an annual assessment on domestic insurers in an amount sufficient to meet all other expenses and disbursements necessary to comply with the laws of this state relating to the examination of insurers.
(d)  In determining the amount of the assessment under Subsection (c), the department:
(1)  shall consider:
(A)  the insurer's total annual premium receipts or admitted assets, or both, that are not attributable to 90 percent of pension plan contracts as defined by Section 818(a), Internal Revenue Code of 1986; or
(B)  the total amount of the insurer's insurance in force; and
(2)  may not consider insurance premiums for insurance contracted for by a state or federal governmental entity to provide welfare benefits to designated welfare recipients or contracted for in accordance with or in furtherance of Title 2, Human Resources Code, or the federal Social Security Act (42 U.S.C. Section 301 et seq.).
(e)  The amount of all examination and evaluation fees paid to the state by an insurer in each taxable year shall be allowed as a credit on the amount of premium taxes due.
(f)  Expired.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 932 (H.B. 3315), Sec. 17, eff. June 15, 2007.
Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 2, eff. September 1, 2011.
Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 2.04, eff. September 28, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.152. Expenses of Examination of Other Insurers

Sec. 401.152.  EXPENSES OF EXAMINATION OF OTHER INSURERS.  (a)  An insurer not organized under the laws of this state shall reimburse the department for the salary and expenses of each examiner participating in an examination of the insurer and for other department expenses that are properly allocable to the department's participation in the examination.
(a-1)  The department shall also impose an annual assessment on insurers not organized under the laws of this state subject to examination as described by this section in an amount sufficient to meet all other expenses and disbursements necessary to comply with the laws of this state relating to the examination of insurers.  The amount imposed under this subsection must be computed in the same manner as the amount imposed under Section 401.151(c) for domestic insurers.
(b)  An insurer shall pay the expenses under this section regardless of whether the examination is made only by the department or jointly with the insurance supervisory authority of another state.
(c)  The insurer shall pay the expenses directly to the department on presentation of an itemized written statement from the commissioner.
(d)  The commissioner shall determine the salary of an examiner participating in an examination of an insurer's books or records located in another state based on the salary rate recommended by the National Association of Insurance Commissioners or the examiner's regular salary rate.
(e)  The limitations provided by Sections 803.007(1) and (2)(B) for a domestic company apply to a foreign insurer.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 1286 (H.B. 2163), Sec. 1, eff. September 1, 2013.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.153. Reimbursement of Expenses of Certain Persons or Firms

Sec. 401.153.  REIMBURSEMENT OF EXPENSES OF CERTAIN PERSONS OR FIRMS.  (a)  A person or firm appointed by the department to examine an insurer or to assist in the insurer's examination shall be paid for those services at the usual and customary rates charged for those services.  The insurer being examined shall pay the fee for those services.
(b)  The commissioner may disapprove the payment of a fee under Subsection (a) if the fee is excessive in relation to the services actually performed.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.154. Tax Credit Authorized

Sec. 401.154.  TAX CREDIT AUTHORIZED.  (a)  An insurer is entitled to a credit on the amount of premium taxes to be paid by the insurer for all examination fees paid under Section 401.153.  The insurer may take the credit for the taxable year during which the examination fees are paid and may take the credit to the same extent the insurer may take a credit for examination fees paid when a salaried department examiner conducts the examination.
(b)  Expired.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 932 (H.B. 3315), Sec. 18, eff. June 15, 2007.
Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1), Sec. 2.05, eff. September 28, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.155. Additional Assessments

Sec. 401.155.  ADDITIONAL ASSESSMENTS.  (a)  The department shall impose additional assessments against insurers on a pro rata basis as necessary to:
(1)  cover all expenses and disbursements required by law; and
(2)  comply with this subchapter and Sections 401.103, 401.104, 401.105, and 401.106.
(b)  The department shall use any surplus resulting from an assessment under this section to reduce the amount of subsequent assessments.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter D. Examination Expenses › Section 401.156. Deposit and Use of Assessment and Fee

Sec. 401.156.  DEPOSIT AND USE OF ASSESSMENT AND FEE.  (a)  The department shall deposit any assessments or fees collected under this subchapter relating to the examination of insurers and other regulated entities by the financial examinations division or actuarial division, as those terms are defined by Section 401.251, to the credit of an account with the Texas Treasury Safekeeping Trust Company to be used exclusively to pay examination costs, as defined by Section 401.251, to reimburse administrative support costs for the Texas Department of Insurance operating account, and to reimburse premium tax credits for examination costs and examination overhead assessments.
(b)  Money deposited under Subsection (a) accumulates and may be disbursed to the department in a manner consistent with that subsection and Subchapter F.
(c)  Revenue that is not related to the examination of insurers or other regulated entities by the financial examinations division or actuarial division shall be deposited to the credit of the Texas Department of Insurance operating account.
(d)  To the extent that another provision of law conflicts with this section or a provision of this section, this section or the provision of this section controls.
(e)  The department may transfer funds between the account described by Subsection (a) and the Texas Department of Insurance operating account as necessary to ensure that funds are deposited to the correct account and used for the correct purposes.  This subsection does not authorize a disbursement or transfer of funds in a manner that is inconsistent with the purposes of Subchapter F and this section.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 3, eff. September 1, 2011.
Acts 2013, 83rd Leg., R.S., Ch. 489 (S.B. 1665), Sec. 1, eff. June 14, 2013.
Acts 2013, 83rd Leg., R.S., Ch. 1286 (H.B. 2163), Sec. 2, eff. September 1, 2013.
Reenacted and amended by Acts 2015, 84th Leg., R.S., Ch. 1236 (S.B. 1296), Sec. 11.001, eff. September 1, 2015.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter E. Confidentiality of Certain Information › Section 401.201. Confidentiality of Early Warning System Information

Sec. 401.201.  CONFIDENTIALITY OF EARLY WARNING SYSTEM INFORMATION.  Information relating to the financial solvency of an organization regulated by the department under this code or another insurance law of this state that is obtained by the department's early warning system is confidential and is not subject to disclosure under Chapter 552, Government Code.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter F. Self-Directed Budget for Certain Divisions › Section 401.251. Definitions

Sec. 401.251.  DEFINITIONS.  In this subchapter:
(1)  "Actuarial division" means the division within the financial program that conducts actuarial examinations of insurers and other entities regulated by the department and administers state laws relating to the level of reserves required of an insurer.
(2)  "Examination cost" means a cost associated with salary, travel, or other personnel expenses associated with the examination of insurers and other entities regulated by the department by the financial examinations division or actuarial division.
(3)  "Financial examinations division" means the division within the financial program that conducts financial and market conduct examinations of insurers and other entities regulated by the department.
(4)  "Financial program" means the program within the department through which the department regulates the financial and operating conditions of, and issues licenses to, domestic and foreign insurers and other entities regulated by the department.
Added by Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter F. Self-Directed Budget for Certain Divisions › Section 401.252. Self-Directed Budget

Sec. 401.252.  SELF-DIRECTED BUDGET.  (a)  The senior associate commissioner of the financial program shall submit to the commissioner an annual budget of examination costs using generally accepted accounting principles.  Notwithstanding any other provision of law, the budget may be adopted and approved only by the commissioner.  The commissioner shall approve a budget under this subsection not later than August 31 of the year in which the associate commissioner submits the budget to the commissioner.
(b)  The financial program may not directly or indirectly cause the Texas Department of Insurance operating account to incur any examination cost.
(c)  Subject to any limitations in this code or another insurance law of this state, the department may set the amounts of fees required or permitted by statute or rule as necessary to:
(1)  carry out the functions of the financial examinations and actuarial divisions relating to the examination of insurers and other regulated entities; and
(2)  fund the budget adopted and approved under this section.
(d)  Notwithstanding this section, the financial program may receive funds appropriated from the state to fund costs other than examination costs.
(e)  An assessment, fee, charge, or other source of revenue collected by the financial program relating to the examination of insurers and other regulated entities by the financial examinations division or actuarial division shall be deposited to the credit of the account described by Section 401.156(a) for the purposes described by that section.
Added by Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter F. Self-Directed Budget for Certain Divisions › Section 401.253. Audits

Sec. 401.253.  AUDITS.  This subchapter does not affect the duty of the state auditor to audit the financial program.
Added by Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter F. Self-Directed Budget for Certain Divisions › Section 401.254. Records; Reporting Requirements

Sec. 401.254.  RECORDS; REPORTING REQUIREMENTS.  (a)  The financial program shall keep financial and statistical information as necessary to disclose completely and accurately the financial program's receipts and examination costs.
(b)  The financial program shall submit to the commissioner and the Legislative Budget Board an annual report that states:
(1)  the revenue received by the financial program from assessments and fees collected by the department relating to the examination of insurers and other regulated entities;
(2)  the total salary for each financial program employee who performs examinations of insurers and other regulated entities;
(3)  the portion of the salary paid to each employee from the self-directed budget approved under Section 401.252;
(4)  the portion of the salary paid to each employee from funds appropriated to the financial program by the state;
(5)  the total travel expenses incurred by each employee who performs examinations of insurers and other regulated entities;
(6)  the portion of travel expenses paid for each employee from the self-directed budget approved under Section 401.252;
(7)  the portion of travel expenses paid for each employee from funds appropriated to the financial program by the state; and
(8)  all other examination costs of the financial program.
Added by Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 401 - Audits and Examinations › Subchapter F. Self-Directed Budget for Certain Divisions › Section 401.255. Membership in Employees Retirement System

Sec. 401.255.  MEMBERSHIP IN EMPLOYEES RETIREMENT SYSTEM.  Employees of the actuarial division and financial examinations division are members of the Employees Retirement System of Texas under Chapter 812, Government Code, and the transition to a self-directed budget as provided by this subchapter has no effect on their membership or any benefits under that system.
Added by Acts 2011, 82nd Leg., R.S., Ch. 659 (S.B. 1291), Sec. 1, eff. September 1, 2011.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter A. General Provisions › Section 402.001. Applicability of Chapter

Sec. 402.001.  APPLICABILITY OF CHAPTER.  (a)  Except as provided by Subsection (b), this chapter applies to:
(1)  each of the following domestic or commercially domiciled insurers:
(A)  a capital stock insurance company;
(B)  a mutual insurance company;
(C)  a title insurance company;
(D)  a fraternal benefit society;
(E)  a Lloyd's plan;
(F)  a reciprocal or interinsurance exchange;
(G)  a group hospital service corporation or a nonprofit hospital, medical, or dental service corporation;
(H)  a risk retention group; and
(I)  a nonprofit legal services corporation; and
(2)  a domestic or commercially domiciled health maintenance organization.
(b)  This chapter does not apply to a domestic insurer that engages in the business of insurance only in this state or to a domestic health maintenance organization that engages in the business of a health maintenance organization only in this state until the insurer or health maintenance organization is authorized to engage in the business of insurance or the business of a health maintenance organization, as applicable, in another state.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter A. General Provisions › Section 402.002. General Reporting Requirements

Sec. 402.002.  GENERAL REPORTING REQUIREMENTS.  (a)  An insurer or health maintenance organization shall file with the department a report, including any necessary exhibit or other attachment, that discloses:
(1)  the material acquisition or disposition of assets; or
(2)  the material nonrenewal, cancellation, or revision of a ceded reinsurance agreement.
(b)  The insurer or health maintenance organization shall file the report required under Subsection (a) not later than the 15th day after the last day of the calendar month in which any transaction for which a report is required occurs.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter A. General Provisions › Section 402.003. Exceptions to Reporting Requirements

Sec. 402.003.  EXCEPTIONS TO REPORTING REQUIREMENTS.  An insurer or health maintenance organization is not required to file a report under Section 402.002 if:
(1)  the acquisition or disposition of assets or the nonrenewal, cancellation, or revision of a ceded reinsurance agreement is not material; or
(2)  the insurer's or health maintenance organization's material acquisition or disposition of assets or material nonrenewal, cancellation, or revision of a ceded reinsurance agreement has been submitted to the commissioner for review, approval, or information under another provision of this code or another law, regulation, or requirement.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter A. General Provisions › Section 402.004. Report Made on Nonconsolidated Basis

Sec. 402.004.  REPORT MADE ON NONCONSOLIDATED BASIS.  (a)  An insurer or health maintenance organization shall report each material acquisition or disposition and each material nonrenewal, cancellation, or revision of a ceded reinsurance agreement on a nonconsolidated basis unless the insurer or health maintenance organization:
(1)  is part of a consolidated group of insurers or health maintenance organizations that uses a pooling arrangement or a 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's or health maintenance organization's reserves; and
(2)  has ceded substantially all of the insurer's or health maintenance organization's direct and assumed business to the pooling arrangement.
(b)  For purposes of Subsection (a), an insurer or health maintenance organization is considered to have ceded substantially all of the insurer's or health maintenance organization's direct and assumed business to a pooling arrangement if:
(1)  the insurer or health maintenance organization has, during a calendar year, less than $1 million total direct and assumed written premiums that are not subject to a pooling arrangement; and
(2)  the net income of the business that is not subject to the pooling arrangement represents less than five percent of the insurer's or health maintenance organization's capital and surplus.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter A. General Provisions › Section 402.005. Confidentiality of Report

Sec. 402.005.  CONFIDENTIALITY OF REPORT.  (a)  A report obtained by or disclosed to the commissioner under this chapter is confidential and is not subject to a subpoena, other than a grand jury subpoena.
(b)  The report may not be disclosed by the commissioner, the National Association of Insurance Commissioners, or any other person without the prior written consent of the affected insurer or health maintenance organization unless the commissioner, after providing notice and an opportunity for a hearing to the affected insurer or health maintenance organization, determines that the interest of shareholders, holders of policies or evidences of coverage, or the public will be served by publishing the report.  If the commissioner makes that determination, the department may:
(1)  disclose the report to the public; and
(2)  publish any part of the report in a manner the commissioner considers appropriate.
(c)  The report may be disclosed to the insurance department of another state or another authorized governmental agency without complying with Subsection (b).
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter B. Acquisition and Disposition of Assets › Section 402.051. Acquisitions and Dispositions Considered Material

Sec. 402.051.  ACQUISITIONS AND DISPOSITIONS CONSIDERED MATERIAL.  For purposes of this chapter, an acquisition, or the aggregate of a series of related acquisitions during a 30-day period, or a disposition, or the aggregate of a series of related dispositions during a 30-day period, is material if it:
(1)  is not recurring;
(2)  is not in the ordinary course of business; and
(3)  involves more than five percent of the reporting insurer's or health maintenance organization's total admitted assets as reported in the insurer's or health maintenance organization's most recent statutory statement filed with the department.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter B. Acquisition and Disposition of Assets › Section 402.052. Acquisitions and Dispositions Subject to Chapter

Sec. 402.052.  ACQUISITIONS AND DISPOSITIONS SUBJECT TO CHAPTER.  (a)  An asset acquisition subject to this chapter includes a purchase, lease, exchange, merger, consolidation, succession, or other acquisition of assets, except the construction or development of real property by or for the reporting insurer or health maintenance organization or the acquisition of materials for that purpose.
(b)  An asset disposition subject to this chapter includes a sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of a creditor or otherwise, abandonment, destruction, or other disposition of assets.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter B. Acquisition and Disposition of Assets › Section 402.053. Content of Report Concerning Material Acquisitions and Dispositions

Sec. 402.053.  CONTENT OF REPORT CONCERNING MATERIAL ACQUISITIONS AND DISPOSITIONS.  In a report of a material acquisition or disposition of assets under Section 402.002, an insurer or health maintenance organization shall disclose:
(1)  the date of the transaction;
(2)  the manner of acquisition or disposition;
(3)  a description of the assets involved;
(4)  the nature and amount of the consideration given or received;
(5)  the purpose of the transaction;
(6)  the manner by which the amount of consideration was determined;
(7)  the gain or loss recognized or realized as a result of the transaction; and
(8)  the name of each person from whom the assets were acquired or to whom they were disposed.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter C. Nonrenewal, Cancellation, and Revision › Section 402.101. Nonrenewals, Cancellations, and Revisions Considered Material

Sec. 402.101.  NONRENEWALS, CANCELLATIONS, AND REVISIONS CONSIDERED MATERIAL.  For purposes of this chapter, a nonrenewal, cancellation, or revision of a ceded reinsurance agreement is material if, on an annual basis, as reported in an insurer's or health maintenance organization's most recent statutory statement filed with the department, the nonrenewal, cancellation, or revision affects:
(1)  for property and casualty business, including accident and health business when written as property and casualty business, more than 50 percent of the insurer's or health maintenance organization's ceded written premium; or
(2)  for life, annuity, and accident and health business, more than 50 percent of the total reserve credit taken for business ceded by the insurer or health maintenance organization.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter C. Nonrenewal, Cancellation, and Revision › Section 402.102. Conditions Under Which Report Concerning Nonrenewal, Cancellation, or Revision Required

Sec. 402.102.  CONDITIONS UNDER WHICH REPORT CONCERNING NONRENEWAL, CANCELLATION, OR REVISION REQUIRED.  Except as provided by Section 402.103, an insurer or health maintenance organization shall file a report of a material nonrenewal, cancellation, or revision of ceded reinsurance under Section 402.002, without regard to which party initiated the nonrenewal, cancellation, or revision, if:
(1)  the entire cession has been canceled, nonrenewed, or revised, and ceded indemnity and loss adjustment expense reserves after the nonrenewal, cancellation, or revision represent less than 50 percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation, or revision not occurred;
(2)  an authorized or accredited reinsurer has been replaced by an unauthorized reinsurer on an existing cession, and the result of the revision affects more than 10 percent of the cession; or
(3)  a collateral requirement previously established for an unauthorized reinsurer has been reduced, in that the requirement to collateralize incurred but unreported claim reserves has been waived for at least one unauthorized reinsurer newly participating in an existing cession, and the result of the revision affects more than 10 percent of the cession.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter C. Nonrenewal, Cancellation, and Revision › Section 402.103. Conditions Under Which Report Concerning Nonrenewal, Cancellation, or Revision Not Required

Sec. 402.103.  CONDITIONS UNDER WHICH REPORT CONCERNING NONRENEWAL, CANCELLATION, OR REVISION NOT REQUIRED.  An insurer or health maintenance organization is not required to file a report under Section 402.002 if the insurer's or health maintenance organization's ceded written premium of the total reserve credit taken for business ceded is, on an annual basis, less than an amount equal to:
(1)  10 percent of direct and assumed written premiums; or
(2)  10 percent of the statutory reserve requirement before a cession.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 402 - Disclosure of Material Transactions › Subchapter C. Nonrenewal, Cancellation, and Revision › Section 402.104. Content of Report Concerning Material Nonrenewals, Cancellations, and Revisions

Sec. 402.104.  CONTENT OF REPORT CONCERNING MATERIAL NONRENEWALS, CANCELLATIONS, AND REVISIONS.  In a report of a material nonrenewal, cancellation, or revision of a ceded reinsurance agreement under Section 402.002, an insurer or health maintenance organization shall disclose:
(1)  the effective date of the nonrenewal, cancellation, or revision;
(2)  a description of the transaction that identifies the initiator of the transaction;
(3)  the purpose of the transaction; and
(4)  if applicable, the identity of each replacement reinsurer.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter A. Payment of Dividends › Section 403.001. Limitation on Dividends

Sec. 403.001.  LIMITATION ON DIVIDENDS.  An insurer organized under the laws of this state, including a life, health, fire, marine, or inland marine insurance company, may not pay a shareholder dividend except from surplus profits arising from the insurer's business.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 463 (S.B. 1006), Sec. 1, eff. June 14, 2013.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter A. Payment of Dividends › Section 403.002. Dividends to Policyholders in Commercial Lines

Sec. 403.002.  DIVIDENDS TO POLICYHOLDERS IN COMMERCIAL LINES.  (a)  An insurer may pay to a commercial policyholder or group of commercial policyholders a dividend that covers more than one class or line of commercial business only:
(1)  after the insurer establishes on an aggregate basis adequate loss reserves for the classes or lines of commercial insurance included within the dividend; and
(2)  if the insurer has sufficient surplus from which to pay the dividend.
(b)  Not later than the 15th day before an insurer pays a dividend described by Subsection (a), the insurer shall file with the department notice of the insurer's intent to pay the dividend.
(c)  The classes or lines of commercial business for which dividends are authorized under this section include any commercial class or line of commercial business regulated by Title 10 or Chapter 5.
(d)  An insurer's limitation of a dividend on one or more classes or lines of commercial business to a group of commercial policyholders is not unfair discrimination if the group:
(1)  has clearly identifiable underwriting characteristics; or
(2)  is an association or group of business entities engaged in similar undertakings.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter B. Estimate of Profits › Section 403.051. Estimate of Profits

Sec. 403.051.  ESTIMATE OF PROFITS.  An insurer organized under the laws of this state may not include the following in the estimate of the insurer's profits for the purpose of paying dividends under Section 403.001:
(1)  the reserve on all unexpired risks computed in the manner provided by this code;
(2)  the amount of all unpaid losses, whether adjusted or unadjusted; and
(3)  all other debts due and payable, or to become due and payable, by the insurer.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter B. Estimate of Profits › Section 403.052. Estimate of Profits of Certain Insurers

Sec. 403.052.  ESTIMATE OF PROFITS OF CERTAIN INSURERS.  A life, health, fire, marine, or inland marine insurance company organized under the laws of this state may not include the following in the estimate of the company's profits for the purpose of paying dividends under Section 403.001:
(1)  the reserve on all unexpired risks computed in the manner provided by this code;
(2)  the amount of all unpaid losses, whether adjusted or unadjusted;
(3)  each amount due the company on bonds, mortgages, stocks, or book-accounts on which no part of the principal or interest has been paid during the year preceding the estimate of profits and for which:
(A)  a suit for foreclosure or collection has not been commenced; or
(B)  a judgment obtained in a suit for foreclosure or collection has remained unsatisfied for a period of more than two years and no interest has been paid on the judgment; and
(4)  if no interest has been paid on a judgment described by Subdivision (3)(B), any interest that is due or accrued on the judgment and remains unpaid.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter B. Estimate of Profits › Section 403.053. Acquired Earned Surplus

Sec. 403.053.  ACQUIRED EARNED SURPLUS.  (a)  This section applies only to:
(1)  a stock domestic insurance company authorized to engage in the business of life, accident, or health insurance in this state;
(2)  a stock foreign or alien life, health, or accident insurance company;
(3)  a stock insurance company authorized to engage in the business of property, casualty, or fire insurance; and
(4)  a domestic Lloyd's plan, reciprocal or interinsurance exchange, or title insurance company.
(b)  In determining the amount of "surplus profits arising from the insurer's business" or "earned surplus" for the purpose of paying dividends to shareholders, the insurer may include the acquired earned surplus of an insurance subsidiary acquired by the insurer to the extent that:
(1)  the inclusion is permitted by an order of the commissioner made in accordance with commissioner rules; and
(2)  the earned surplus of the acquired subsidiary on the date of acquisition that exists on the date of the commissioner's order is not otherwise reflected in the insurer's earned surplus.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter C. Penalties › Section 403.101. Penalties

Sec. 403.101.  PENALTIES.  (a)  The department may revoke the charter of an insurer organized under the laws of this state that pays a dividend in violation of Sections 403.001 and 403.051.  If the department revokes an insurer's charter under this subsection, the department shall immediately revoke the insurer's certificate of authority.
(b)  Not later than the 10th day before the date on which the department intends to revoke an insurer's certificate of authority under this section, the department shall give the insurer written notice of the department's intent.  The notice must include the specific reasons for the revocation.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 403 - Dividends › Subchapter C. Penalties › Section 403.102. Penalties for Certain Insurers

Sec. 403.102.  PENALTIES FOR CERTAIN INSURERS.  The department may revoke the charter of a life, health, fire, marine, or inland marine insurance company organized under the laws of this state that pays a dividend in violation of Sections 403.001 and 403.052.  If the department revokes a company's charter under this section, the department shall immediately revoke the company's certificate of authority.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.001. Definition

Sec. 404.001.  DEFINITION.  In this subchapter, "insurer" includes:
(1)  a capital stock insurance company;
(2)  a reciprocal or interinsurance exchange;
(3)  a Lloyd's plan;
(4)  a fraternal benefit society;
(5)  a mutual company, including a mutual assessment company;
(6)  a statewide mutual assessment company;
(7)  a local mutual aid association;
(8)  a burial association;
(9)  a county mutual insurance company;
(10)  a farm mutual insurance company;
(11)  a fidelity, guaranty, or surety company;
(12)  a title insurance company;
(13)  a stipulated premium company;
(14)  a group hospital service corporation;
(15)  a health maintenance organization;
(16)  a risk retention group; and
(17)  any other organization or person engaged in the business of insurance.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.002. Applicability of Subchapter

Sec. 404.002.  APPLICABILITY OF SUBCHAPTER.  This subchapter applies to a person or organization engaged in the business of insurance without regard to whether the person or organization is listed in Section 404.001, unless another statute specifically cites this subchapter and exempts the person or organization from this subchapter.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.003. Order to Remedy Condition

Sec. 404.003.  ORDER TO REMEDY CONDITION.  (a)  If the financial condition of an insurer, when reviewed as provided by Subsection (b), indicates a condition that might make the insurer's continued operation hazardous to the insurer's policyholders or creditors or to the public, the commissioner may, after notice and hearing, order the insurer to take action reasonably necessary to remedy the condition.
(b)  The insurer's financial condition must be reviewed under Subsection (a) in conjunction with one or more of the following:
(1)  the kinds and nature of risks insured;
(2)  the loss experience and ownership of the insurer;
(3)  the ratio of total annual premium and net investment income to commission expenses, general insurance expenses, policy benefits paid, and required policy reserve increases;
(4)  the insurer's method of operation, affiliations, or investments;
(5)  any contracts that lead or may lead to contingent liability; or
(6)  agreements in respect to guaranty and surety.
(c)  In an order issued under Subsection (a), the commissioner may take any action the commissioner considers reasonably necessary to remedy the condition described by Subsection (a), including:
(1)  requiring an insurer to:
(A)  reduce the total amount of present and potential liability for policy benefits by reinsurance;
(B)  reduce the volume of new business accepted;
(C)  suspend or limit writing new business for a period;
(D)  reduce general insurance and commission expenses by specified methods; or
(E)  increase the insurer's capital and surplus by contribution; or
(2)  suspending or canceling the insurer's certificate of authority.
(d)  The commissioner may use the remedies available under Subsection (c) in conjunction with the provisions of Chapter 83 if the commissioner determines that the financial condition of the insurer is hazardous and can be reasonably expected to cause significant and imminent harm to the insurer's policyholders or the public.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.004. Construction With Law Relating to Capital and Surplus

Sec. 404.004.  CONSTRUCTION WITH LAW RELATING TO CAPITAL AND SURPLUS.  The commissioner's authority under Section 404.003 to require an increase in an insurer's capital and surplus by contribution, and any capital and surplus requirements imposed by the commissioner under that section, prevail over:
(1)  the capital and surplus requirements of:
(A)  Sections 822.054, 822.201-822.203, 822.205, 822.210-822.212, 841.054, 841.201, 841.204, 841.205, 841.207, 884.206, 884.308, and 884.309; and
(B)  Subchapter G, Chapter 841;
(2)  any other provision of this code or other law establishing capital and surplus requirements for insurers; and
(3)  any rule adopted under a law described by Subdivision (1) or (2).
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.005. Standards and Criteria for Early Warning

Sec. 404.005.  STANDARDS AND CRITERIA FOR EARLY WARNING.  (a)  The commissioner by rule may:
(1)  establish uniform standards and criteria for early warning that the continued operation of an insurer might be hazardous to the insurer's policyholders or creditors or to the public; and
(2)  establish standards for evaluating the financial condition of an insurer.
(b)  Standards established by the commissioner under this section must be consistent with the purposes of Section 404.003.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter A. Hazardous Financial Condition › Section 404.006. Agreement With Another Jurisdiction

Sec. 404.006.  AGREEMENT WITH ANOTHER JURISDICTION.  The commissioner may enter into an agreement with the insurance regulatory authority of another jurisdiction concerning the management, volume of business, expenses of operation, plans for reinsurance, rehabilitation, or reorganization, and method of operations of, and type of risks to be insured by, an insurer that is:
(1)  licensed in the other jurisdiction; and
(2)  considered to be in a hazardous financial condition or in need of a specific remedy that may be imposed by the commissioner and the insurance regulatory authority of the other jurisdiction.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter B. Impairment of Stock or Surplus › Section 404.051. Impairment Prohibited

Sec. 404.051.  IMPAIRMENT PROHIBITED.  (a)  The impairment of the capital stock of a stock insurance company is prohibited.
(b)  Impairment of the following surpluses in excess of that provided by Section 404.053 is prohibited:
(1)  the surplus of a stock insurance company; or
(2)  the minimum required aggregate surplus of a:
(A)  mutual company;
(B)  Lloyd's plan; or
(C)  reciprocal or interinsurance exchange.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
2023 Texas Statutes › Insurance Code › Title 4 - Regulation of Solvency › Subtitle A - General Provisions › Chapter 404 - Financial Condition › Subchapter B. Impairment of Stock or Surplus › Section 404.052. Determination of Impairment

Sec. 404.052.  DETERMINATION OF IMPAIRMENT.  (a)  When determining under this subchapter whether the surplus or the minimum required aggregate surplus of an insurer is impaired, the commissioner shall charge against the insurer:
(1)  the reinsurance reserve required by the laws of this state; and
(2)  all other debts and claims against the insurer.
(b)  This section does not apply to a life insurance company.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.