Texas Register, Volume 30, Number 43, Pages 6973-7094, October 28, 2005 Page: 6,999
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TRD-200504647
Charles Horton
Executive Director
Texas State Board of Social Worker Examiners
Earliest possible date of adoption: November 27, 2005
For further information, please call: (512) 458-7236
TITLE 28. INSURANCE
PART 1. TEXAS DEPARTMENT OF
INSURANCE
CHAPTER 7. CORPORATE AND FINANCIAL
REGULATION
SUBCHAPTER A. EXAMINATION AND
FINANCIAL ANALYSIS
28 TAC 7.9
The Texas Department of Insurance proposes new 7.9, con-
cerning the examination of the actuarial opinion of an insurer
which is required to file an actuarial opinion with its property and
casualty annual statement adopted by the commissioner. The
proposed section will require a domestic property and casualty
insurer to submit to the department an Actuarial Opinion Sum-
mary which will facilitate the examination of the actuarial opinion
submitted in accordance with Insurance Code 802.002 which
requires an actuarial opinion to be submitted with an insurer's
annual statement. In addition, the proposed section will provide
that the commissioner may request a domestic property and ca-
sualty insurer to furnish its Actuarial Report and Workpapers and
a foreign insurer to furnish its Actuarial Opinion Summary and
Actuarial Report and Workpapers. The proposed section will fur-
ther provide that the Actuarial Opinion Summary and the Actuar-
ial Report and Workpapers be completed in accordance with the
National Association of Insurance Commissioners' Annual State-
ment Instructions, Property and Casualty (Instructions) which
are adopted annually by the department in conjunction with its
adoption of the annual statement forms.
Ms. Betty Patterson, Senior Associate Commissioner, Financial
Program, has determined that for each year of the first five years
the proposed section will be in effect, there will be no fiscal im-
pact to state and local governments as a result of the enforce-
ment or administration of the rule. There will be no measurable
effect on local employment or the local economy as a result of
the proposal.
Ms. Patterson has also determined that for each year of the first
five years the section is in effect, the public benefits anticipated
as a result of the section will be improved identification of insur-
ers in hazardous financial condition. The proposed section will
require an Actuarial Opinion Summary to be submitted to the
department annually on or before March 15th. It is a summary
of the Actuarial Report and Workpapers and will provide infor-
mation on the opining actuary's point estimate and/or range of
reasonable estimates, explanation of any exceptional adverse
development, and other information required by the Instructions.
The Actuarial Opinion Summary will assist the department in
identifying insurers requiring further analysis to determine their
financial condition. Conversely, it will help the department de-
termine which insurers do not need further examination. Basedon the department's experience, the probable economic cost to
persons required to comply with the proposed section will be
less than $1,000. The section requires the appointed actuary
to prepare the Actuarial Opinion Summary in accordance with
the Instructions. The department estimates that this will take the
appointed actuary no more than four hours. Consulting actuary
rates range from $200 to $300 per hour and represent the high
end of the cost per hour, so the cost of compliance should not
exceed $1,000. On the basis of cost per hour of labor, there is no
expected difference in cost of compliance between micro, small
and larger businesses affected by this section. The department
finds it neither legal nor feasible to waive or reduce the effect of
the proposed section on micro or small insurers subject to the
section since the information required by the section is neces-
sary to effectively regulate and monitor the financial condition of
property and casualty insurers licensed in Texas, regardless of
their size.
To be considered, written comments on the proposal must be
submitted no later than 5:00 p.m. on November 28, 2005 to Gene
C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A,
Texas Department of Insurance, P. O. Box 149104, Austin, Texas
78714-9104. An additional copy of the comments must be simul-
taneously submitted to Betty Patterson, Senior Associate Com-
missioner, Financial Program, Mail Code 305-2A, Texas Depart-
ment of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
A request for a public hearing should be submitted separately to
the Office of the Chief Clerk.
The new section is proposed under the Insurance Code Article
1.15, which authorizes the commissioner to examine each in-
surer doing business in this state; Article 1.32, which authorizes
the commissioner to establish criteria for hazardous conditions;
Article 21.39, which requires insurers to establish adequate
reserves and provides for the adoption of each current formula
for establishing reserves applicable to each line of insurance;
802.001 which authorizes the commissioner to make changes
in the forms of the annual statements required of insurance
companies of any kind, as shall seem best adapted to elicit a
true exhibit of their condition and methods of transacting busi-
ness; 802.002, which requires an insurance company's annual
statement to include an actuarial opinion relating to the loss and
loss adjustment expense reserves for property and casualty
risks; Article 21.54, 861.254, 862.001, 883.203, 883.204,
885.401, 911.002, 911.304, 912.301, 941.252, 942.201,
982.004, 984.153, and 984.202, which require insurers subject
to the proposed section to file an annual statement, other
financial reports and other information and specify particular
rulemaking authority of the commissioner relating to those
insurers; and 36.001, which provides that the commissioner
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 this state.
The following statutes are affected by this proposal: Insurance
Code Articles 1.15 and 1.32, and 802.002.
7.9. Examination of Actuarial Opinion for Property and Casualty
Insurers.
(a) Scope. This section applies to all insurers that are required
to file an actuarial opinion with the property and casualty annual state-
ment adopted by the commissioner under Insurance Code 802.001,
including fire, fire and marine, general casualty, fire and casualty, or
U.S. branch of an alien insurer, county mutual insurance company, mu-
tual insurance company other than a life insurance company, Lloyd's
plan, reciprocal or inter-insurance exchange, domestic risk retentionPROPOSED RULES October 28, 2005 30 TexReg 6999
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Texas. Secretary of State. Texas Register, Volume 30, Number 43, Pages 6973-7094, October 28, 2005, periodical, October 28, 2005; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth97316/m1/26/?q=%22%22~1: accessed July 15, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.