Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 6 - CAPTIVE INSURANCE › Subchapter C - CAPTIVE INSURANCE COMPANY APPLICATION PROCESS › Section 6.202 - Captive Insurance Company Certificate of Authority Application Contents and Process

Current through Reg. 49, No. 28; July 12, 2024
(a) An applicant
				  seeking to redomesticate an existing captive insurance company or to form a new
				  captive insurance company must provide the following information to the
				  department:
(1) the name of the entity, the
				  entity's federal employer identification number, and the location and means of
				  contacting the entity;
(2) the
				  physical location of the books and records and means of maintaining the books
				  and records;
(3) the registered
				  agent for service;
(4) a list of
				  the service providers that the captive insurance company will use, including
				  qualified accountants, qualified actuaries, and licensed attorneys;
(5) biographical affidavits for the
				  individuals described in §
											6.303
				  of this title who provide necessary functions to operate and govern the captive
				  insurance company;
(6) the name of
				  the ultimate controlling person;
(7) the organizational documents for the
				  captive insurance company, other than a captive insurance company formed as a
				  captive exchange, including:
(A) a
				  certificate of filing from the Texas Secretary of State indicating that the
				  entity has been formed or redomesticated to Texas as an entity under the
				  Business Organizations Code, other than a risk retention group or general
				  partnership, for the purpose of providing captive insurance;
(B) an affidavit satisfactory to the
				  Commissioner from the incorporators, organizers, or officers of the captive
				  insurance company stating that:
(i) the
				  capital and surplus are the bona fide property of the company; and
(ii) the certificate of filing is true and
				  correct; and
(C) if
				  necessary, an affidavit by the incorporators, organizers, or officers of the
				  captive insurance company stating:
(i) the
				  number of shares or other type of equity instrument without par value that are
				  subscribed; and
(ii) the actual
				  consideration received by the captive insurance company for those shares or
				  other type of equity instrument;
(8) a description of how the captive
				  insurance company fits into the affiliated group's risk management plan and the
				  group's significant operations in the State of Texas;
(9) if the application is for the
				  redomestication of a captive insurance company, information listed in
				  subsection (b) of this section;
(10) if the applicant proposes to insure
				  controlled unaffiliated business, the information listed in subsection (c) of
				  this section;
(11) a plan of
				  operation, including:
(A) the asset page;
				  liability, capital, and surplus page; income statement page; and cash flow page
				  for the applicant from the Texas Captive Annual Report that are certified by
				  two principal officers who have submitted biographical affidavits and:
(i) four years of financial projections, with
				  a disclosure of the assumptions the applicant is using to develop the projected
				  financial statements; and
(ii) if
				  applicable, the most recent three years of operational results, in United
				  States dollars; however, if the applicant has not been in operation for three
				  or more years, the applicant must submit operational results, in United States
				  dollars, for each year it has been in operation;
(B) a description of the lines of business
				  and perils that the captive insurance company proposes to cover and the limits
				  of coverage;
(C) a list of the
				  affiliates that the applicant proposes to insure;
(D) a description of the reinsurance programs
				  proposed including the lines of business that are affected, limits of
				  reinsurance coverage, and the counterparties that will be involved;
(E) an organizational chart listing all
				  affiliates of the applicant's affiliated group;
(F) agreements with any captive management
				  companies the applicant proposes to use;
(G) a copy of the applicant's investment
				  strategy;
(H) an explanation of how
				  the applicant intends to handle profits, including a statement about how
				  dividends will be evaluated;
(I) an
				  independent actuarial report that evaluates the feasibility of the applicant's
				  plan of operation;
(J) details of
				  how the parent entity will maintain and support the captive insurance company,
				  including ensuring compliance with Texas statutes and rules; and
(K) evidence of the financial wherewithal of
				  the affiliate group, including affiliated persons, to retain the risk using the
				  captive insurance company; and
(12) an affidavit by two principal officers
				  or members of the governing committee who have submitted biographical
				  affidavits that the information provided in paragraphs (1) - (11) of this
				  subsection is true and correct.