Texas Register, Volume 38, Number 47, Pages 8313-8478, November 22, 2013 Page: 8,380
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Section 964.067 requires captive management companies to
register with the commissioner before providing administrative
services to a captive insurance company by providing the
required registration information on a form adopted by the
commissioner.
Section 964.069 authorizes the commissioner to adopt reason-
able rules as necessary to implement the purposes and provi-
sions of this chapter.
Section 964.071(a) provides that an authorized foreign or alien
captive insurance company licensed under laws of any jurisdic-
tion may become a domestic captive insurance company in this
state on a determination by the commissioner that the captive in-
surance company has complied with the requirements of Insur-
ance Code Chapter 964. Section 964.071(c) provides that the
commissioner may postpone or waive the imposition of any fees
or taxes under this code for a period not to exceed two years for
any foreign or alien captive insurance company redomesticating
to this state.
Section 36.001 provides that the commissioner of insurance may
adopt any rules necessary and appropriate to implement the
powers and duties of the Texas Department of Insurance under
the Insurance Code and other laws of the state.
CROSS REFERENCE TO STATUTE. The proposal affects
the following statutes: Insurance Code 401.002, 401.006,
401.051, 803.005, 803.008, 964.002, 964.051, 964.052,
964.053, 964.054, 964.055, 964.056, 964.057, 964.057,
964.058, 964.059, 964.060, 964.062, 964.063, 964.065,
964.066, 964.067, 964.069, 964.071, 36.001 and Government
Code 411.083, 411.087, and 411.106.
6.401. Annual Report.
(a) The department adopts the Texas Captive Annual Report,
including all forms, instructions, and requirements by reference. The
adopted forms and instructions will be available on the department's
website.
(b) Except as provided in 6.404 of this title (relating to
Captive Insurance Companies Using Other Than Calendar Year Fiscal
Years), on or before March 1 of each year, a captive insurance company
must electronically submit its annual report of the captive insurance
company's financial condition as of December 31 of the prior year
using the adopted Texas Captive Annual Report form and instructions.
6.402. Basis of Accounting.
Under Insurance Code 964.054(c), the basis of accounting for captive
insurance company financial statements is current and future gener-
ally accepted accounting principles issued by the Financial Accounting
Standards Board for use in the United States.
6. 403. Audited Financial Statements.
(a) As required in Insurance Code 964.060(b)(2) and subject
to the filing requirements of Insurance Code Chapter 401, Subchap-
ter A, the captive insurance company must file with the department by
June 1 of each year, a report of the captive insurance company's fi-
nancial condition at last year end. The report must include a qualified
accountant's opinion of the captive insurance company's financial con-
dition.
(b) The opinion must meet the requirements of Insurance Code
Chapter 401, Subchapter A, and 7.85 and 7.88 of this title (relating
to Audited Financial Reports and Independent Audits of Insurer and
HMO Financial Statements and Insurer and HMO Internal Control over
Financial Reporting).6.404. Captive Insurance Companies Using Other Than Calendar
Year Fiscal Years.
(a) A captive insurance company may submit a written request
to the commissioner for permission to use a fiscal year end other than a
calendar year end. The commissioner may grant the request in writing
at the commissioner's sole discretion. A captive insurance company
may not use a fiscal year other than a calendar year without the com-
missioner's written authorization.
(b) As required under Insurance Code 964.060(c)(3), to sup-
port the premium tax return due March 1 of each year, a captive in-
surance company granted a fiscal year end date other than December
31, must submit the asset page and liability, capital, and surplus page;
income statement, and statement of cash flow, as verified by two exec-
utive officers, on or before March 1 of each year for the prior calendar
year and in the annual report format established in the Texas Captive
Annual Report adopted under 6.401 of this title (relating to Annual
Report). The executive officers verifying the report must have submit-
ted biographical affidavits under 6.303 of this title (relating to Captive
Insurance Company Biographical Information).
(c) Under Insurance Code 964.060(c), a captive insurance
company granted a fiscal year end date other than December 31 must:
(1) not later than the 60th day after the captive insurance
company's fiscal year end, submit to the department the captive insur-
ance company's annual report for the prior fiscal year using the Texas
Captive Annual Report form and instructions under 6.401 of this title;
and
(2) not later than the 150th day after the date the annual re-
port is due, submit to the department the captive insurance company's
audited financial statements as required under 6.403 of this title (re-
lating to Audited Financial Statements).
6. 405. Capital and Surplus Requirements.
(a) Capital and surplus requirements will be determined by the
commissioner under Insurance Code 964.056. In addition to the fac-
tors listed in Insurance Code 964.056, the commissioner may consider
any factor the commissioner deems relevant in making this determina-
tion, including:
(1) net writings to policyholders' surplus ratio;
(2) net reserves to policyholders' surplus ratio; and
(3) net retention of an individual loss per occurrence as a
percentage of policyholders' surplus.
(b) Following the captive insurance company's submission of
the annual report or any material change in the plan of operation, the
commissioner may require increased capital and surplus after consid-
ering factors in Insurance Code 964.056 and this section.
,6.406. Financial Projections.
(a) A captive insurance company must provide financial pro-
jections covering the next four years of operations:
(1) with its application under 6.202 of this title (relating to
Captive Insurance Company Certificate of Authority Application Con-
tents and Process);
(2) as required under 6.304(c) of this title (relating to Ma-
terial Change in the Plan of Operations);
(3) not later than 30 days after a request by the department;
and
(4) with its annual report every third year, except as pro-
vided in subsection (b) of this section.38 TexReg 8380 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/m1/68/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.