Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013 Page: 8,374
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(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 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 (relating to Captive Insurance Company Biograph-
ical Information) who provide necessary functions to operate and gov-
ern the captive insurance company;
(6) the name of the ultimate controlling person;
(7) proposed organizational documents for the captive in-
surance company;
(8) a description of how the captive insurance company fits
into the affiliated group's risk management plan and the group's signif-
icant 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 unaffili-
ated 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 disclo-
sure of the assumptions the applicant is using to develop the projected
financial statements; and
(ii) if applicable, the most recent three years of op-
erational 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 cov-
erage;
(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 ofthe ap-
plicant's affiliated group;
(F) agreements with any captive management compa-
nies the applicant proposes to use;
(G) a copy of the applicant's investment strategy;(H) an explanation of how the applicant intends to han-
dle profits, including a statement about how dividends will be evalu-
ated;
(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.
(b) An application for a redomestication must include:
(1) the current domicile jurisdiction;
(2) the date of last examination;
(3) a copy of the most recent examination report;
(4) information required in 6.407 and 6.408 of this title
(relating to Loans to Affiliates and Letters of Credit) for existing loans
to affiliates; and
(5) a letter of no objection or release from the captive in-
surance company's current domicile.
(c) If the applicant proposes to insure a controlled unaffiliated
business, the following documentation must be provided with the ap-
plication:
(1) copies of the agreement(s) that evidence an existing
contractual relationship between parties, one of which must be a cap-
tive insurance company affiliate;
(2) a description and any supporting documentation that
evidences the captive insurance company affiliate bears the risk of a
potential financial loss associated with the contract beyond the affiliate
having to pay a fee; and
(3) a description and any supporting policies that document
that a captive insurance company affiliate controls the risk management
function of the controlled unaffiliated business.
(d) The department may accept similar information prepared
in a similar format for a nonaffiliated third party, including a regulator,
bank, or similar user, to the extent that the information satisfies one or
more of the requirements in subsections (a) - (c) of this section to the
satisfaction of the commissioner.
(e) The department will review the information submitted un-
der subsections (a) - (d) of this section. The applicant may submit
amended documents and information during the review process.
(1) If the department determines that the documents and
information meet the standards required for a certificate of authority
under Insurance Code 964.059 and this chapter, the department will
issue a certificate of general good to the applicant. The certificate of
general good does not bind the Texas Secretary of State to accept any
subsequent filing by the applicant, nor does it bind the department to
issue a certificate of authority.
(2) If the commissioner determines that the documents and
information do not to meet the standards required for a certificate of au-
thority under Insurance Code 964.059 and this chapter, the commis-38 TexReg 8374 November 22, 2013 Texas Register
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Texas. Secretary of State. Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013, periodical, November 22, 2013; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth379965/m1/62/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.