Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013 Page: 8,378
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(b) All material changes to the plan of operation require prior
approval of the commissioner.
(c) The captive insurance company must provide updated fi-
nancial projections if a material change in the plan of operation will
result in a variation in the most recently filed projections equal to an
amount greater than 15 percent of projected net equity. The updated
financial projections must be submitted with the notice of a material
change.
(d) The department will reassess the captive insurance com-
pany's minimum capital and surplus when there is an update to the
captive insurance company's plan of operations. The captive insurance
company must provide an actuarial opinion on the effect of the change
in the plan of operation if requested by the department.
6.305. Sale of a Covered Affiliate.
(a) Except as provided in subsection (b) of this section, a cap-
tive insurance company is prohibited from providing insurance cover-
age to a former affiliate or reinsurance to an insurer covering the oper-
ational risks of the former affiliate after the effective date on which the
affiliation ceases, including the effective date of the sale of the affiliate.
(b) The captive insurance company may provide insurance
coverage to the former affiliate if the captive insurance company
provides information acceptable to the commissioner that the cov-
erage being provided meets the requirements to be categorized as a
controlled unaffiliated business under 6.202(c) of this title (relating
to Captive Insurance Company Certificate of Authority Application
Contents and Process).
6.306. Books and Records.
(a) The books and records of a captive insurance company
must be located and maintained within the United States and its ter-
ritories at all times. The books and records of a captive insurance com-
pany must be located and maintained within the State of Texas, unless
the commissioner authorizes in writing that the books and records may
be located or maintained outside the state. A captive insurance com-
pany may not locate or maintain records outside of the state until after
the captive insurance company receives the commissioner's written au-
thorization, and then may only locate or maintain those records outside
of the state in the manner and to the extent that the commissioner has
authorized.
(b) The captive insurance company must provide the depart-
ment with a complete list of all of the locations where its records are
located or maintained. Record location and maintenance locations out-
side of the state must comply with the commissioner's authorization
described in subsection (a) of this section.
(c) A captive insurance company must make a written request
for authorization from the commissioner to locate or maintain records
outside of the state. The written request must:
(1) identify the specific physical address outside the State
of Texas where the captive insurance company's books and records will
be located or maintained;
(2) identify the types of books and records that will be lo-
cated or maintained outside the state, including books and records in
an electronic format;
(3) if applicable, identify the vendor of a leased or pur-
chased software or electronic platform that will provide services to the
captive insurance company related to the maintenance of the captive
insurance company's books and records; and
(4) if applicable, include the captive insurance company's
continuity plan in the event of cancellation or termination of the ar-rangement with a vendor identified by the captive insurance company
under paragraph (3) of this subsection.
(d) All books and records of a captive insurance company must
be:
(1) electronically or physically accessible to the depart-
ment upon the department's request; and
(2) maintained in a manner that provides an audit trail be-
tween the captive insurance company's general ledger and the captive
insurance company's source documents.
(e) A captive insurance company's books and records must be
maintained with reasonable controls to ensure the integrity, accuracy,
and reliability of the storage system and to prevent the deterioration of
the books and records.
(f) A captive insurance company must ensure that it can re-
cover its electronic books and records up to one week before the loss
of it primary source of records.
(g) A captive insurance company must be able to access a com-
plete and current set of its electronic books and records or a complete
and current recovery of its electronic books and records from a location
within the state at all times.
6.307. Changes to Formation Documents.
To comply with Insurance Code 964.062, the captive insurance com-
pany must submit any proposed change of information in its formation
documents to the department and request approval of the change in ad-
vance. If the commissioner approves the change, the department will
notify the captive insurance company in writing. Submission to the
department is not a filing with the Texas Secretary of State, and the
commissioner's approval does not constitute acceptance or affect any
review of the proposed amendment by the Texas Secretary of State.
The agency certifies that legal counsel has reviewed the pro-
posal and found it to be within the state agency's legal authority
to adopt.
Filed with the Office of the Secretary of State on November 8,
2013.
TRD-201305157
Sara Waitt
General Counsel
Texas Department of Insurance
Earliest possible date of adoption: December 22, 2013
For further information, please call: (512) 463-6327
SUBCHAPTER E. FINANCIAL INFORMATION
AND REPORTING
28 TAC 6.401 - 6.410
STATUTORY AUTHORITY. The department proposes the new
sections under the Government Code 411.083, 411.087, and
411.106, and Insurance Code 401.002, 401.006, 401.051,
803.005, 803.008, 964.002, 964.051 - 964.060, 964.062,
964.063, 964.065 - 964.067, 964.069, 964.071, and 36.001.
Government Code 411.106 authorizes the department to re-
ceive criminal history information from DPS regarding insurance
company principals and officers and applicants for any entity
holding or seeking a license, certificate, permit, registration, or
other authorization issued by the department to engage in a
regulated activity under the Insurance Code. Government Code38 TexReg 8378 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/m1/66/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.