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You are here: Home . rules . 2002 . 0505B-059
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Subchapter A. Submission Requirements for Filings and Departmental Actions Related to Such Filings

28 TAC §§3.1 - 3.8

The Commissioner of Insurance adopts new Subchapter A, §§3.1 ­ 3.8, concerning requirements for filing of policy forms, certificates, riders, amendments, and endorsements for life, accident, and health insurance and annuities. Sections 3.3, 3.4 and 3.8 are adopted with changes to the proposed text as published in the December 6, 2002 issue of the Texas Register (27 TexReg 11455). Sections 3.1. 3.2, 3.5 ­ 3.7 are adopted without changes and will not be republished.

Sections 3.1 ­ 3.8 are necessary to streamline and clarify the overall process by which forms and related documents concerning life insurance products, annuities, accident and health insurance products, credit life insurance, credit accident and health insurance, and prepaid legal forms are filed for statutory and regulatory review and approval. To further streamline the filing process, the sections allow companies to electronically file forms with the department using a form and format determined by the department, which currently is the National Association of Insurance Commissioners (NAIC) supported SERFF (System for Electronic Rate and Form Filing) system. The department will be able to receive SERFF filings after all necessary rules are adopted. The new sections further streamline the filing process by enabling the department to notify companies of the department's decisions by letter in lieu of stamping the duplicate copy, thus eliminating the need for filing of duplicate copies of forms.

The new sections will facilitate consistent and appropriate filing of forms and rates with the department and will improve communications and understanding of the filing requirements. The sections will further combine the existing filing requirements for the regular, general and expedited review processes into one filing process by consolidating the information into one transmittal checklist with a transmittal form for miscellaneous documents. This will eliminate the use of the previously promulgated certification transmittal checklists for the regular, general and expedited review processes.

In conjunction with the adoption of the new subchapter, the department is adopting the repeal of existing Subchapter A, §§3.1 - 3.21, which is published elsewhere in this issue of the Texas Register.

New §3.1 sets out the scope of the subchapter to identify the types of forms and miscellaneous documents that must be filed under Chapter 3, Subchapter A. Section 3.2 defines terms used in this subchapter. Section 3.3 establishes the information that must be included in a transmittal checklist and transmittal form which must accompany all filings. Section 3.4 specifies the general submission requirements, which include information concerning the contact person, form specifications, specimen language, variable material, matrix and insert page filings, limited/partial refilings, outlines of coverage, supplemental coverage, policy or contract forms, and rates/actuarial information. Section 3.4(q)(5) clarifies that if, during any 12-month period, the cumulative increase in premium rate is equal to or greater than 50%, actuarial information must be provided to support the rate increase. For example, for a particular 12-month period, the premium rate for the first 2 months is $100. The premium increases by 10% in month three, 10% in month five and 25% in month eleven. The cumulative increase for purposes of applying the 50% test under this paragraph is 51.25% (1.10 x 1.10 x 1.25). Section 3.4(r) specifies required filing fees. Section 3.4(r)(1)(D) increases the filing fee from $50 to $100 for rates filed separately from the policy or contract that are subject to review and approval by the department. The department currently assesses a fee of $100 for other rates filed for review. Section 3.4(r)(1)(J) and (2)(H) require a filing fee of $50 for each form with a maximum fee of $500 for each matrix filing as these filings can be used to create multiple contracts or policies through the combination of various matrix provisions.

Section 3.5 sets forth the appropriate statutory and/or regulatory authorities to utilize when submitting filings to the department and the description of each filing such as: new, informational, substantially similar, exact copy, substitution, pending, and resubmission. Section 3.6 addresses information concerning certifications, attachments, and other additional information required for a complete and comprehensive review of the submitted forms. Section 3.7 contains the requirements for form acceptance and the final disposition of the form. Section 3.8 establishes an effective date for the adopted rules.

Section 3.3 was changed to correct two clerical errors and section 3.4 was changed to clarify sentence structure. In §3.8, the date has been changed to June 1, 2003 in order to complete technical and administrative tasks necessary to implement the billing system.

General: A commenter expresses support of the proposed rules providing requirements for policy forms and related filings.

Agency Response: The department appreciates the commenter´s support and believes the more efficient and effective policy form filing and review process will benefit all parties involved.

Matrix filings: A commenter asks for confirmation that following the approval of various matrix provisions, new form filings may reference previously approved provisions and thus only submit for review new provisions for a particular filing.

Agency Response: The commenter is correct that matrix filings submitted to the department should only include new provisions for review. Carriers should not include previously approved provisions with the new filing. Carriers must determine how they will file new product filings. A carrier may file forms for a specific policy, certificate, rider, endorsement form or for a matrix filing, however; it may not file a specific form as both.

§3.2(6)(D): A commenter asks for clarification regarding limited, partial refilings due to a change to the separate account for variable products when the separate account is bracketed as variable text on the initial filing. The commenter´s specific concern is whether a change in funds in the separate account triggers this requirement.

Agency Response: The rule does not require limited or partial refilings for a change to the funds of the separate account if, when the form reflecting the funds was filed and approved, the fund names were bracketed as variable text.

§3.4(r)(1)(A)-(J): A commenter asks whether companies, when submitting a new filing, are required to pay for use of matrix filings in addition to new form filing fees.

Agency Response: Insurers are required to choose between either a matrix filing or single form filing (policy, certificate, rider, endorsement, etc.). An insurer may use a matrix filing only with other approved or exempted matrix filings, not in conjunction with single form filings. The department will charge the appropriate fee as provided by §3.4(r)(1)(A)-(J). Matrix filings are always $50 per form with a maximum of $500 (see §3.4(r)(1)(J) and (2)(H)), whether they are a new filing, an exempt filing, or a resubmission.

For with changes: New York Life Insurance Company.

Against:

The new sections are adopted pursuant to Insurance Code Articles 3.42, 3.51-6, 3.53, 3.64, 3.70-1, 3.70-12, 3.74, 5.13-1, and 21.42, Chapters 23 and 26 and §36.001. Insurance Code Article 3.42(p) provides that the commissioner is authorized to adopt reasonable rules that are within the standards and purposes of Insurance Code Article 3.42 and necessary to implement and accomplish the specific provisions of Article 3.42. Insurance Code Article 3.51-6 §5 provides that the department is authorized to issue rules necessary to accomplish the specific provisions of Article 3.51-6. Insurance Code Article 3.53 §7(H) authorizes the department to charge a fee for forms or schedules filed under Article 3.53 in an amount to be determined by the department. Insurance Code Article 3.64(f) provides that the commissioner is authorized to adopt rules to implement and accomplish the specific provisions of Article 3.64. Insurance Code Articles 3.70-1 and 3.70-12 require the department to issue reasonable rules necessary to carry out the purposes of the articles. Insurance Code Article 3.74 provides that the department shall adopt rules in accordance with federal law applicable to the regulation of Medicare supplement insurance coverage that are necessary for the state to obtain or retain certification as a state with an approved regulatory program under 42 U.S.C. 1395ss. Insurance Code Article 5.13-1(d) authorizes the department to promulgate and enforce rules concerning legal service contracts that in the discretion of the department are deemed necessary to accomplish the purposes of the article. Insurance Code Article 21.42 provides that Texas laws govern any insurance contract that is payable to any citizen or inhabitant of Texas. Insurance Code Article 23.19 authorizes the commissioner to adopt rules concerning participation contracts and agreements related to non-profit legal services. Insurance Code Article 26.04 requires the commissioner to adopt rules as necessary to implement Chapter 26 and to meet the minimum requirements of federal law and regulations. Insurance Code §36.001 authorizes the commissioner of insurance to adopt rules for the conduct and execution of the powers and duties of the department as authorized by statute.

§3.1. Scope. This subchapter applies to all contracts, policies, applications, certificates of insurance, insert pages, riders, limited partial refilings, matrix filings, disclosure forms, rates, outline of coverage, and other documents subject to be filed with the Texas Department of Insurance pertaining to the following:

(1) individual and group life insurance;

(2) individual and group annuities;

(3) individual and group accident and health insurance (including Medicare supplement under Insurance Code Chapter 3, Subchapter G and long-term care);

(4) individual and group combination life and accident and health insurance;

(5) individual and group combination annuity and accident and health insurance;

(6) point of service products as described in Insurance Code Article 3.64 and §21.2901 of this title (relating to Definitions);

(7) individual and group credit life and individual and group credit accident and health insurance under Insurance Code Articles 3.50, 3.51-6, and 3.53;

(8) individual and group prepaid legal insurance under Insurance Code Chapter 23 and Article 5.13-1 and Chapter 23 of this title (relating to Prepaid Legal Service);

(9) rates, subject to review and approval by the department including, but not limited to:

(A) individual and group credit life;

(B) individual and group credit accident and health insurance;

(C) Medicare supplement; and

(D) changes in rating methodologies for small employer plans;

(10) Medicare SELECT plans of operation and amendments;

(11) miscellaneous documents and information necessary to make a filing complete or for a comprehensive review of the filing including, but not limited to:

(A) documents which must be accompanied by the transmittal checklist described in §3.3(b) of this subchapter (relating to Transmittal Information) as follows:

(i) articles of incorporation;

(ii) constitutions and bylaws and/or trust agreements;

(iii) disclosures;

(iv) outlines of coverage;

(v) rates, other than the rates listed in paragraph (9) of this section, including the following:

(I) individual accident and health;

(II) long-term care;

(III) life; and

(IV) prepaid legal.

(vi) certifications related to form filings, readability scores, and actuarial memoranda (other than Figure Number 47 of §26.27 of this title (relating to Forms)).

(B) documents which must be accompanied by the transmittal form described in §3.3(c) of this subchapter as follows:

(i) life insurance illustration information;

(ii) Medicare supplement refund calculations;

(iii) preferred provider health benefit plan provider directories;

(iv) preferred provider service or geographic descriptions;

(v) certifications including those related to small or large employer health benefit plans (except for Figure Number 45 of §26.27 of this title); and

(vi) annual reports including:

(I) long-term care lapse and replacement reports;

(II) long-term care rescission reports;

(III) long-term care denial of claims reports;

(IV) long-term care report required by Insurance Code Article 3.70-12 §4;

(V) Medicare supplement rate reports; and

(VI) Medicare SELECT grievance reports.

§3.2. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Alternate face page--A face page of a group policy, certificate, or contract, which may be used in place of the face page of a previously approved or exempted group policy, certificate, or contract when the group policy, certificate, or contract will be issued to a different or specific group (e.g., a policy that was filed as an "ABC Multiple Employer Trust (MET)" that is later issued to a specific MET).

(2) Department--The Texas Department of Insurance.

(3) Filing--A submission, made to the department by a company, that is accompanied by either a transmittal checklist or a transmittal form, and which may include policies, certificates, contracts, applications, certifications, informational materials, insert pages, riders, limited partial refilings, matrix filings, and rates.

(4) General use--A filing that will be used with other forms submitted in the filing or with previously approved and exempted forms for a certain product or products or a subset of a product or type (e.g., an application that will be used with all life products; an application that will be used with all universal life products; an application that will be used with group life and accident and health products; an application that will be used with major medical and hospital surgical products.)

(5) Insert page--A page used to replace an existing page of a previously approved or exempted contract.

(6) Limited, partial refilings--A change to a previously approved or exempted life or annuity form that meets one or more of the criteria set forth in subparagraphs (A) - (D) of this paragraph as follows:

(A) a change in the text, interest rate, guaranteed charges, or mortality table used to compute non-forfeiture values for life insurance or annuities;

(B) a change in the current interest rate, where such rates are guaranteed and shown in the policy or contract;

(C) a change in the reserves (if the change in reserves impacts the text of the policy);

(D) a change to the separate account for variable products when the separate account is bracketed as variable text on the initial filing.

(7) Matrix filing--A filing consisting of individual provisions, each with its own unique identifiable form number, allowing the flexibility to create multiple policies, certificates, contracts or applications by using numerous combinations of the individual provisions approved or exempted.

(8) New filing--A filing that has not been previously reviewed, approved, or disapproved by the department, or a filing that has been previously withdrawn and is being resubmitted as a new filing (not to include the withdrawal of a filing containing corrections to a form subsequent to the company receiving a disapproval from the department);

(9) Purpose and use--For each submitted form, the purpose and use will be a brief description to include at least the following:

(A) how a form will be used (e.g., the application will be used on a general use basis; or used with specific policy(ies) or contract form(s) previously approved or exempted);

(B) the type of coverage provided by the form (e.g., whole life, term life, universal life, variable annuity, major medical, specified disease, accident only, or hospital indemnity);

(C) any key or unique provisions contained in the form (e.g., for life and annuities -- bonus interest, additional interest credits, two-tier values, bail-out, market value adjustments, and long term care; for accident and health -- preferred provider benefits, prescription drugs, and innovative benefit in a Medicare supplement policy);

(D) if applicable, how the form will be marketed (e.g., direct, agent, or electronic);

(E) if applicable, to whom the form is to be marketed (e.g., specific groups such as an annuity contract marketed to issue ages 25-60, or a health benefit plan issued to children only, including Insurance Code Chapter 27).

(10) Rider--An amendment or endorsement that changes a policy, certificate, or contract to add, expand, limit, or remove provisions and/or benefits, which may be optional or mandatory, and when used, becomes a part of the policy, certificate, or contract.

§3.3. Transmittal Information.

(a) All filings submitted pursuant to this subchapter shall be accompanied by the department´s transmittal checklist except for the documents listed in §3.1(11)(B) of this subchapter (relating to Scope), which shall be accompanied by the department´s transmittal form as described in this section. Copies of the transmittal checklist and transmittal form are available from the Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas, 78701, or by accessing the department´s website at www.tdi.state.tx.us

(b) The transmittal checklist shall:

(1) provide complete and accurate information about the filing;

(2) include, at a minimum, the following information:

(A) the name and address of the submitting company;

(B) the contact person information as required in §3.4(b) of this subchapter (relating to General Submission Requirements);

(C) the unique identifying form number of each form submitted;

(D) an explanation of the purpose and use of each form as defined in §3.2 of this subchapter (relating to Definitions);

(E) an indication of the product and type;

(F) an indication of whether the filing is prompted by a business change such as an assumption, a name change, or a demutualization/conversion;

(G) the applicable authority from the Insurance Code or the Administrative Code under which the form is being submitted as described in §3.5 of this subchapter (relating to Filing Authorities and Categories);

(H) an indication of whether the filing is a matrix filing;

(I) rate filing information, if applicable;

(J) a statement that the submission will be used:

(i) on a general use basis, only with the policy being filed, or with previously approved or exempted forms; and

(ii) if the submission will be used with previously approved or exempted forms, a listing of the following:

(I) the form numbers of the previously approved or exempted forms;

(II) the approval or exemption dates of the previously approved or exempted forms; and

(III) a brief description of when or how each submitted form will be used with the previously approved or exempted forms;

(K) if the filing is a group filing, it must contain:

(i) A statement specifying the specific group type as set forth in §3.6(c)(1) of this subchapter (relating to Certifications, Attachments, and Additional Information Requirements).

(ii) A separate policy and certificate for each type of group. A submission of a single policy and certificate for use with more than one type of group is prohibited.

(iii) The following as applicable:

(I) a statement specifying the size of the group if issued under Chapter 26 of this title (relating to Small Employer Health Insurance Regulations);

(II) a copy of the trust agreement if issued to a trust;

(III) a copy of the constitution, bylaws, and articles of incorporation if issued to an association; or

(IV) certification and evidence that the master policy for the group was lawfully issued and delivered in a state in which the company was authorized to do insurance business;

(L) any certifications and attachments, including summary of differences, if applicable, or any additional information required by §3.6 of this subchapter, or variable information in accordance with §3.4(e) of this subchapter (relating to General Submission Requirements).

(3) be completed, signed, and certified by an attorney licensed to practice law in this state, an actuary familiar with the requirements of the Insurance and Administrative Codes, the chief executive officer of the filing company, or a person with authority to bind the company.

(c) The transmittal form shall:

(1) provide complete and accurate information about the filing;

(2) include, at a minimum, the following information:

(A) the name and address of the submitting company;

(B) the contact person information as required by §3.4(b) of this subchapter;

(C) an identification of the type of miscellaneous document or information being submitted as described in §3.1(11)(B) of this subchapter; and

(D) for filings to be used with previously approved or exempted forms:

(i) the form numbers of the previously approved or exempted forms;

(ii) the approval or exemption dates of the previously approved or exempted forms;

(iii) a general statement of the types of previously approved or exempted forms (e.g., waiver of surrender charge rider); and

(iv) a brief description of when or how each submitted form will be used with the previously approved or exempted forms;

(d) Notwithstanding subsections (b)(2) and (c)(2) of this section, the commissioner may prescribe a transmittal document prescribed by the NAIC for purposes of standardization.

(e) Filings that are not accompanied by a completed transmittal checklist or transmittal form, or which do not include all required certifications or signatures will not be accepted by the department and will be returned to the company as incomplete.

§3.4. General Submission Requirements.

(a) Submission. Companies shall submit one copy of the filing to the Filings Intake Division at the address set forth in §3.3(a) of this subchapter (relating to Transmittal Information). A filing submitted electronically shall be submitted in such form and format as determined by the department.

(b) Contact Person. A company submitting a filing to the department shall:

(1) have one person designated as the contact person for that filing;

(2) provide the contact person´s name, address, telephone number, and if available, fax number on the transmittal checklist or transmittal form;

(3) provide, for any filing submitted by anyone other than the company, a dated letter of specific authorization which shall:

(A) designate the consulting firm, actuary, legal counsel, or other person as the designated contact person for that filing; and

(B) be signed by an officer of the company or a person with authority to bind the company; and

(4) notify the department immediately of any change of information with regard to the contact person for a pending filing, regardless of whether the contact person is the company´s employee or other authorized representative.

(c) Form Specifications. Any filing submitted pursuant to this subchapter shall comply with the following:

(1) Filings submitted in paper format shall:

(A) be submitted on 8 ½ by 11 inch paper;

(B) not be submitted in bound booklets;

(C) be legible;

(D) be in typewritten, computer generated, or printer´s proof format; and

(E) not contain any color highlighting.

(2) Any form submitted shall be designated by a form number that:

(A) is sufficient to distinguish it from all other forms used by the company;

(B) is located in the lower left-hand corner of the cover page or on the first page of the form if the form number is visible with the cover closed;

(C) has the additional identifying form number requirements set forth in Subchapter FF of this chapter (relating to Credit Life and Accident and Health Insurance), if the form is submitted for consideration pursuant to Insurance Code Article 3.53; and

(D) has the additional identifying form number requirements set forth in §26.14(g) of this title (relating to Coverage), if the form is submitted for consideration pursuant to Insurance Code Chapter 26.

(d) Specimen Language and Specimen Fill-in Material.

(1) For all forms, specimen language and fill-in material shall reflect the most restrictive option available under variability. Additional descriptions of variability options shall be provided upon request or as otherwise required.

(2) Life and annuity forms shall be completed with fill-in material for specimen age 35. If the form is not issued at age 35, the fill-in material shall be completed for the youngest age at which the form may be issued. If reduced death benefits are provided for any age at issue, the specimen form shall be filled in for the age at issue for which the greatest reduction in benefits is made. The fill-in material shall be for the longest premium paying period available under the form.

(e) Variable Material.

(1) For all forms, any variable material in a form shall be bracketed and shall contain a clear explanation of how the material will vary. It is acceptable for certain materials to vary due solely to the age, sex, classification of the insured, plan type such as 403(b) and IRA, telephone numbers, and addresses depending on the manner in which the company intends to use the variations. The unique form number on a form may not be bracketed as variable.

(2) For individual life forms, the text and specifications of non-forfeiture assumptions generally cannot be considered variable material.

(f) Matrix Filings. Policies, certificates, contracts, or applications may be submitted as a matrix filing. Any company submitting a matrix filing:

(1) shall identify each provision with a unique form number that:

(A) is sufficient to distinguish it from all other provisions used by the company; and

(B) is located at the lower left-hand corner of the provision;

(2) may use the same provision filed under one form number for all products, provided the language is applicable to each product; however, any changes in the language to comply with the requirements for each product will require a unique form number;

(3) shall list the form number for each provision on the transmittal checklist and provide a statement indicating how the provision will be used and the type of product for which the provision will be used; and

(4) shall provide the certifications required in §3.6(a)(8) of this subchapter (relating to Certifications, Attachments, and Additional Information Requirements).

(g) Insert Page Filings. Policies, certificates, and contracts may be submitted with insert pages, or an insert page may be filed subsequent to the approval of a policy, certificate, or contract. Any company submitting an insert page filing:

(1) shall identify each insert page with a unique form number that:

(A) is sufficient to distinguish it from all other forms used by the company; and

(B) is located in the lower left-hand corner of the page;

(2) may use the same insert page filed under one form number for all products, provided the language is applicable to each product type; however, any changes in the language to comply with the requirements for each product type will require a unique form number;

(3) may use the same insert page to replace an existing page of a previously approved or exempted contract, if used in this manner, the replaced page, as originally filed, must reflect a unique form number that distinguishes it from the other pages of the form or contract;

(4) shall list the form number for each insert page on the transmittal checklist and provide a statement indicating how the insert page will be used and the type of product for which the insert page will be used; and

(5) shall provide the certifications required in §3.6(a)(8) of this subchapter.

(h) Limited, Partial Re-filings. Limited, partial refilings shall contain the change and any additional actuarial information necessary for a comprehensive review of the filing(s).

(i) Outline of Coverage. An outline of coverage shall be filed with each individual accident and health policy, group or individual Medicare supplement policy and/or certificate, or group or individual long-term care policy and/or certificate.

(j) Supplemental Coverages.

(1) Individual accident and health forms submitted pursuant to §3.3080 of this title (relating to Supplemental Coverage) shall be accompanied by the certification required in §3.6(a)(7) of this subchapter;

(2) Group life forms submitted pursuant to Insurance Code Article 3.50 §1(1) or (5) shall be accompanied by the certification required in §3.6(a)(7) of this subchapter.

(k) Complete Submission of Policy or Contract Forms. For a submission to be considered complete, the submission shall include the following:

(1) the toll-free notice unless the company is exempt under §1.601(c) of this title (relating to Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures) or has on file a toll-free notice which is current with the requirements set forth in §1.601 of this title;

(2) the application, if applicable;

(3) in the case of group policies or contracts, the certificate;

(4) any rider which will or can be included in all issues of the form; and

(5) disclosures and other information, if applicable.

(l) Riders Included with Filing. For any rider included with the policy or contract filing, indicate whether the rider is to be used:

(1) only with the policy being filed; or

(2) with other clearly identified previously approved or exempted forms.

(m) Previously Approved or Exempted Forms. Any previously approved or exempted form (e.g., application or rider) to be used with the policy or contract filing need not be resubmitted; however, the filing shall indicate the type of form (e.g., rider, policy, application, etc.), form number, and the approval or exemption date of the previously approved or exempted form. If there is a change in the use of the previously approved or exempted form, the filing must state the form number of the form(s) with which the previously approved or exempted form was designed to be exclusively used, as well as the updated forms list.

(n) Appropriate Use of Previously Approved or Exempted Forms. The company is responsible for assuring the appropriate use of previously approved or exempted forms. This includes the appropriate use of any riders or other forms such as matrix and insert pages.

(o) Submission of a Certificate for Policies or Contracts Issued Outside of Texas. A copy of the master policy or contract issued outside of Texas must accompany any life, annuity, credit, or accident and health certificate filed for review or filed as exempt, along with certification and evidence that the master policy for the group was lawfully issued and delivered in a state in which the company was authorized to do insurance business.

(p) Rates. Initial and subsequent rate filings shall include all specific descriptions and required information as follows:

(1) policy forms for which the rate filing applies shall be specified on the transmittal checklist or the transmittal form, as applicable;

(2) credit life and credit accident and health filings submitted under Insurance Code Article 3.53 and Chapter 3, Subchapter FF of this title (relating to Credit Life and Accident and Health Insurance) shall include the rate information;

(3) group and individual Medicare supplement filings submitted under Insurance Code Article 3.74 §4, and Chapter 3, Subchapter T of this title (relating to Minimum Standards for Medicare Supplement Policies) shall include the applicable rate schedule and experience by plan;

(4) group and individual long-term care forms submitted under Insurance Code Article 3.70-12 and Chapter 3, Subchapter Y (relating to Standards for Long-Term Care Insurance Coverage Under Individual and Group Policies) shall include the rate schedule;

(5) all individual accident and health filings submitted under Insurance Code Article 3.42 shall include the rate schedule; and

(6) rate schedules submitted shall be accompanied by the actuarial information set forth in subsection (q) of this section.

(q) Actuarial Information.

(1) Each life filing, including riders, insert pages, or limited partial refilings, which changes the non-forfeiture values of a particular policy or certificate shall be accompanied by the information set forth in subparagraphs (A) - (C) of this paragraph:

(A) The mathematical formulas and sample calculations for the items set forth in clauses (i) - (iv) of this subparagraph.

(i) net premiums for the specimen age and plan of insurance;

(ii) specimen non-forfeiture calculations necessary to verify consistency between the non-forfeiture values and the text of the form for years one, 20, and 50;

(iii) terminal reserves for the specimen age and plan; and

(iv) any other calculations necessary to verify non-forfeiture values and reserves.

(B) An actuarial memorandum as specified in clauses (i) and (ii) of this subparagraph, as applicable:

(i) for universal life and interest sensitive forms:

(I) an actuarial memorandum shall provide the mortality table, guaranteed interest rates, maximum surrender charges, maximum expense charges, maximum risk rates (cost of insurance rates), maximum loads, and maximum fees at issue. Upon a change in basic coverage, bands and risk classes for all ages shall be provided.

(II) actuarial proof shall be provided that:

(-a-) cash surrender values meet the minimum requirements of Insurance Code Article 3.44a;

(-b-) cash surrender values will always equal or exceed the minimum values required by law; and

(-c-) provide a comparison table of all guaranteed cash surrender values, standard nonforfeiture law minimum cash surrender values, guaranteed death benefits, and reserves. Such comparison should be based on the fill-in issue age (usually age 35) as defined in subsection (d) of this section, a premium which will provide coverage to the latest available maturity date, the minimum issue amount, minimum guaranteed interest rates, maximum guaranteed cost of insurance rates (mortality rates), maximum guaranteed charges, and a month-by-month calculation of the values shown in the comparison for the first and fiftieth years.

(ii) for variable life forms, actuarial information shall be provided as required by §3.804 of this chapter (relating to Insurance Contract and Filing Requirements), and as required by this section.

(C) A statement shall be provided certifying that all policies or certificates, in addition to the specimen language and fill-in material, will have premiums, reserves, and non-forfeiture values calculated in a manner consistent with the information furnished with the specimen language and fill-in material. Any qualifications to such certification shall be specified, including any variation in formulas at different ages at issue or at time of a change.

(2) For each annuity filing, an actuarial memorandum shall be provided to meet the minimum requirements of Insurance Code Article 3.44b and specify the guaranteed interest rates, the maximum surrender charges, and any other maximum charges applicable in the determination of non-forfeiture values. If the company intends to change the guaranteed interest rates specified in the form, notification shall be submitted to the department prior to the change. The notification shall specify the new guaranteed interest rate and the date when the new guaranteed interest rate will be effective for new issues of a specified policy form, as required by §3.1004 of this chapter (relating to Policy Form Review).

(A) For variable annuities, the actuarial information shall provide the information required in paragraph (2) of this subsection and the information required by §3.705 of this chapter (relating to Contract Requirements), to the extent such material is applicable.

(B) For policies or contracts that contain a market-value adjustment, the actuarial memorandum shall:

(i) identify the name of the separate account;

(ii) indicate the basis for the market-value adjustment formula and that the formula provides reasonable equity to both the contract holder and the company;

(iii) detail that the reserve liabilities are established in accordance with actuarial procedures that recognize that assets of the separate account are based on market values, the variable nature of the benefits provided, and any mortality guarantees;

(iv) include a table of minimum guaranteed policy values and cash surrender values which:

(I) are based on the longest guaranteed investment period,

(II) reflect both upward and downward market-value adjustments; and

(III) show that the minimum guaranteed values prior to the adjustment are not less than the minimum non-forfeiture values required by law; and

(v) provide a numerical illustration reproducing the values shown in the table for the first, second, and third years of investment, and at the end of the guaranteed investment period.

(3) Group and individual Medicare supplement (including Medicare SELECT) rate filings shall be accompanied by supporting actuarial information as required by Chapter 3, Subchapter T of this title (relating to Minimum Standards for Medicare Supplement Policies).

(4) Group and individual long-term care:

(A) rate filings shall be accompanied by supporting actuarial information as required by Chapter 3, Subchapter Y of this title (relating to Standards for Long-Term Care Insurance coverage Under Individual and Group Policies); and

(B) annual reports shall include the rates, rating schedule, and supporting documentation as required by Insurance Code Article 3.70-12, Sec.4(b).

(5) Individual accident and health premium rate increases which result in any policyholder experiencing an increase in premium rate greater than or equal to 50% in any 12-month period must be accompanied by actuarial information which includes, at a minimum, the items of information specified in subparagraphs (A)-(E) of this paragraph. For the purpose of this paragraph, an increase in premium rate greater than or equal to 50% in any 12-month period shall mean the cumulative increase with respect to such premium considered over a 12-month period.

(A) The form number or numbers to which the submitted rate increase applies.

(B) The planned effective date of the increased rate.

(C) The schedule or schedules of rates to be used.

(D) A concise explanation of the rating process, including assumptions, claims data, methodology, and formulas used in development of gross premium rates.

(E) A statement of actual and projected experience as a basis for the rate adjustments.

(6) Discretionary group filings shall be accompanied by supporting actuarial information as required by Insurance Code Articles 3.50 §1(6) and 3.51-6 §1(a)(6).

(r) Filing Fee.

(1) The appropriate filing fee for filings for approval (excluding prepaid legal filings) are set forth in subparagraphs (A) - (J) of this paragraph.

(A) For each contract or policy, including Certification Form for Prototype Forms Figure Number 45, its certificate, approved or exempted application, and all approved or exempted riders filed as part of the entire policy or contract, a fee of $100 is required.

(B) For a filing of applications filed separately from the policy or contract to which it will be attached, a fee of $100 is required.

(C) For a filing of riders filed separately from the policy or contract to which it will be attached, a fee of $100 is required.

(D) For a filing of rates filed separately from the policy(ies) or contract(s) to which it is applicable, that require approval by the department as specified in §3.1(9) of this subchapter (relating to Scope), a fee of $100 is required.

(E) For a filing of alternate face pages with constitution and bylaws, articles of incorporation, or trust agreements, a fee of $100 is required.

(F) For a filing of insert pages filed subsequent to the original approval of a policy, a fee of $100 is required.

(G) For filings which normally would be considered exempt, but which, due to certain reasons specified in Subchapter Z of this chapter (relating to Exemption from Review and Approval of Certain Life, Accident, Health and Annuity Forms and Expedition of Review) are required to be submitted to the department for approval, a fee of $100 is required.

(H) For filing a resubmission of a previously disapproved form, a fee of $50 is required.

(I) For each refiling of a previously withdrawn form, a fee of $50 is required.

(J) For a filing of matrix provisions, due to the ability to create multiple contracts or policies from matrix provisions, a fee of $50 per form with a maximum fee of $500 is required.

(2) The appropriate filing fee for a filing exempt under Subchapter Z of this chapter is set forth in subparagraphs (A) - (H), as follows:

(A) For each exempt policy or contract filed simultaneously with its certificate, application, and exempt riders which are filed as part of the entire policy or contract, a fee of $50 is required.

(B) For a filing of exempt applications filed separately from the exempt policy or contract to which it will be attached, a fee of $50 is required.

(C) For a filing of exempt riders filed separately from the exempt policy or contract to which it will be attached, a fee of $50 is required.

(D) For a filing of rates filed separately from the exempt policy or contract to which it is applicable, and which is not subject to approval by the department as specified in §3.1(11)(A) of this subchapter, a fee of $50 is required.

(E) For a filing of outlines of coverage filed separately from the exempt policy or contract to which it is applicable, and which is not subject to approval by the department as specified in §3.1(11)(A) of this subchapter, a fee of $50 is required.

(F) For a filing of alternate face pages filed subsequent to the original approval of a policy for use with multiple employer trusteed arrangements as defined in Insurance Code Articles 3.50, §1(5) and 3.51-6, §1(a)(3), a fee of $50 is required.

(G) For a filing of exempt insert pages filed separately from the exempt policy or contract to which it is applicable, a fee of $50 is required.

(H) For a filing of exempt matrix provisions to be used with only exempt products, a fee of $50 per form with a maximum fee of $500 is required.

(3) The appropriate filing fees for filings other than those specified in paragraphs (1) and (2) are set forth in subparagraphs (A) ­ (C), as follows:

(A) For a filing of outlines of coverage filed separately from the policy or contract to which it is applicable, and which is subject to review by the department, a fee of $50 is required.

(B) For a filing of PPO disclosures filed separately from the policy or contract to which it is applicable, and which is subject to review by the department, a fee of $50 is required.

(C) For a filing of Accident and Health or Life rates filed separately from the policy or contract to which it is applicable, and which is subject to review by the department, a fee of $50 is required.

(4) Filings as described in §3.1(11)(B) of this subchapter shall require no filing fee.

§3.5. Filing Authorities and Categories.

(a) All filings submitted pursuant to this subchapter shall be identified under specific filing authorities as defined by the Insurance Code or Administrative Code. The authorities under which all filings are identified are described in paragraphs (1) ­ (5) of this subsection as follows:

(1) review pursuant to Insurance Code Article 3.42(d);

(2) file and use pursuant to Insurance Code Article 3.42(c); however, any form that has been previously disapproved pursuant to §3.7(d) of this subchapter (relating to Form Review, Acceptance, Approval, Disapproval, Correction, Exemption, Withdrawals, and Notice of Action) is not eligible for filing under this category;

(3) exempt pursuant to Insurance Code Article 3.42(h) and Subchapter Z of this chapter (relating to Exemption from Review and Approval of Certain Life, Accident, Health and Annuity Forms and Expedition of Review);

(4) credit life insurance or credit accident and health insurance pursuant to Insurance Code Articles 3.50, 3.51-6(4), and 3.53; and

(5) prepaid legal insurance pursuant to Insurance Code Chapter 23 and Article 5.13-1 and Chapter 23 of this title (relating to Prepaid Legal Service).

(b) Each filing submitted pursuant to subsection (a) of this section shall be identified according to the category of filing. The filing categories are described as follows:

(1) Informational. A filing that is submitted for informational purposes only and is not subject to approval.

(2) Substantially Similar to a Previously Approved Form. A filing that is substantially similar to a form that was previously approved by the department. This type of filing requires the information and certification specified in §3.6(a)(3) of this subchapter (relating to Certifications, Attachments, and Additional Information Requirements).

(3) Exact Copy of a Previously Approved Form. A filing which, except for the company´s name, address, telephone number, or other similar identification information, is an exact copy of a form that was previously approved by the department and is still compliant with current statutes and regulations. This type of filing requires the information and certifications specified in §3.6(a)(3) of this subchapter.

(4) Substitution of a Previously Approved or Exempted Form that has Never Been Issued or Used in Texas. A filing which substitutes a form previously approved or exempted by the department wherein the previously approved or exempted form has not been issued, or otherwise used in Texas, and will not be used in Texas at any time by the company. This type of filing requires the information and certifications specified in §3.6(a)(4) of this subchapter and the form number must be the same as the originally approved form.

(5) Correction to a Pending Form. A filing containing corrections to a pending form submitted subsequent to the company receiving notification of the form´s deficiencies from the department. This type of filing requires the information and certifications specified in §3.6(a)(5) of this subchapter, and is subject to the requirements set forth in §3.7(c) and (e)(1) of this subchapter.

(6) Resubmission of a Previously Disapproved Form. A filing containing corrections to a form subsequent to the company receiving a disapproval letter from the department. This type of filing requires the information and certifications specified in §3.6(a)(6) of this subchapter.

§3.6. Certifications, Attachments, and Additional Information Requirements.

(a) A company shall include the certification(s), attachment(s), and additional information referred to in this section as follows:

(1) A filing shall include the following certifications, as applicable:

(A) Specific certification. Filings submitted as file and use pursuant to §3.5(a)(2) of this subchapter (relating to Filing Authorities and Categories) shall certify that:

(i) the certification is on behalf of the company;

(ii) the company is bound thereby;

(iii) the company has reviewed, and is familiar with, all applicable statutes and regulations of this state and of the United States;

(iv) the company has reviewed the filing; and

(v) to the best of the company´s knowledge, information, and belief, the filing complies in all respects with the applicable statutes and regulations of this state.

(B) General certification. Filings submitted other than file and use shall certify that:

(i) the certification is on behalf of the company;

(ii) the company is bound thereby;

(iii) the company has reviewed the filing, and

(iv) to the best of the company´s knowledge, information, and belief, the filing complies with the applicable statutes and regulations of this state.

(2) A company submitting a filing as file and use shall, in addition to providing the certification specified in paragraph (1) of this subsection, complete the appropriate certification on the transmittal checklist certifying that:

(A) no corrections to the form have been requested by the department; and

(B) the form has not been previously disapproved by the department.

(3) A company submitting a form substantially similar to a previously approved form or an exact copy of a previously approved form shall provide the certification specified in paragraph (1) of this subsection, and on the transmittal checklist shall provide the following information and certification(s):

(A) the form number and approval date of the previously approved form, including the company´s name if different from the submitting company;

(B) a summary of the difference(s) between the previously approved form and the new form, including a description of any deleted text, and a clear identification of all changes with new or modified text underlined; and

(C) a certification that no changes have been made to the form other than those identified.

(4) A company submitting a form as a substitution of a previously approved or exempted form shall provide the certification specified in paragraph (1) of this subsection, and on the transmittal checklist shall provide the following information and certification(s):

(A) the form number and approval or exemption date of the previously approved or exempted form;

(B) a summary of the difference(s) between the previously approved or exempted form and the new form, including a description of any deleted text, and a clear identification of all changes with new or modified text underlined;

(C) a certification that no changes have been made to the form other than those identified; and

(D) a certification that the original version of the form has not been issued or otherwise used in Texas, and will not be issued or used in Texas at any time.

(5) A company submitting a form as a correction to a pending form shall provide the certification specified in paragraph (1) of this subsection, and on the transmittal checklist shall provide the following information and certification(s):

(A) the form number of the pending form;

(B) the name of the department´s form review specialist who reviewed the form;

(C) the date of notification of any form deficiencies;

(D) the tracking number of the pending form as assigned by the department;

(E) a summary of the difference(s) between the previously reviewed form and the corrected form, including a description of any deleted text, and a clear identification of all changes, with new or modified text underlined; and

(F) a certification that no changes have been made to the form other than those identified.

(6) A company submitting a form as a resubmission of a previously disapproved form shall provide the certification specified in paragraph (1) of this subsection, and on the transmittal checklist shall provide the following information and certification(s):

(A) the form number of the disapproved form;

(B) the name of the department´s form review specialist who reviewed the form;

(C) the date of disapproval by the department;

(D) the tracking number of the disapproved form as assigned by the department;

(E) a summary of the difference(s) between the disapproved form and the new form, including a description of any deleted text, and a clear identification of all changes, with new or modified text underlined; and

(F) a certification that no changes have been made to the form other than those identified.

(7) A company submitting a supplemental coverage filing pursuant to §3.3080 of this title (relating to Supplemental Coverage) or Insurance Code Article 3.50 §1(1) or (5) shall complete the appropriate certification on the transmittal checklist certifying that the policy shall be marketed only as supplemental coverage.

(8) A company submitting a filing as a matrix filing or as an insert page pursuant to §3.4(f) and (g) of this subchapter (relating to General Submission Requirements) shall, in addition to providing the certification specified in paragraph (1) of this subsection, complete the appropriate certification on the transmittal checklist certifying that, when issued, the policies, certificates, contracts, riders, or applications created from such forms comply in all respects with the applicable statutes and regulations of this state and of the United States with regard to the final product issued.

(9) A company submitting a filing as exempt pursuant to §3.5(a)(3) of this subchapter (relating to Filing Authorities and Categories) shall, in addition to the certification specified in paragraph (1) of this subsection, complete the appropriate certification on the transmittal checklist certifying:

(A) the form filed is not deceptive or misleading;

(B) the form filed does not contain exceptions or conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverages of the policy;

(C) the form filed meets the criteria specified in §3.4004 of this chapter (relating to Exempt Forms);

(D) the form filed does not contain any new, uncommon, or unusual provisions, conditions, or concepts as provided in §3.4006 of this chapter (relating to New, Uncommon and Unusual Forms);

(E) the company submitting the filed form has had a certificate of authority to do such business in Texas for a period not less than two years as required in §3.4007 of this chapter (relating to Newly Licensed Insurers); and

(F) the use of the form filed will be discontinued in the event of future changes in laws or rules that would prohibit the use of such forms.

(b) A company shall include any applicable readability certifications, in accordance with Subchapter G of this chapter (relating to Plain Language Requirements for Health Benefit Policies), §3.3092(c) of this chapter (relating to Format, Content, and Readability for Outline of Coverage), §3.3102(g) of this chapter (relating to Language Readability), or any other statutes and regulations of this state.

(c) A company submitting a filing for a group policy or contract shall:

(1) On the transmittal checklist, specify the specific group type under which the form is being filed by indicating the appropriate paragraph as set forth in Insurance Code Articles 3.50 §1 and 3.51-6 §§(1)(a) and (2)(a), or §21.2702(1) and (2) of this title (relating to Definitions) and for Chapter 26 filings, specify the size of the group. Any filing submitted under an ineligible group type will not be accepted for review by the department, and will be returned to the company as incomplete.

(2) Submit a separate policy and certificate, each with a unique identifying form number, for each group type that the filing will be issued to.

(3) Submit the following required information for certain group filings:

(A) Filings subject to Insurance Code Chapter 26 shall comply with all filing requirements set forth in Chapter 26 of this title (relating to Small Employer Health Insurance Regulations);

(B) Filings to be issued to an association must include a copy of the association´s constitution, bylaws, and articles of incorporation that demonstrate that the association meets the requirements of Insurance Code Articles 3.50 §1(10), 3.51-6 §1(a)(2), or §§21.2702(1) or (2) of this title;

(C) Filings to be issued to an association may be submitted on an "ABC association" basis provided that, if approved, each time the form is issued to a different eligible association the company shall submit:

(i) a copy of the eligible association´s constitution, bylaws, and articles of incorporation; and

(ii) an alternate face page which identifies the association with either the policy number assigned or a unique form number;

(D) Accident and health filings to be issued to associations participating in a multiple association trusteed arrangement shall be accompanied by:

(i) a listing of all the associations participating in the multiple association trusteed arrangement;

(ii) a copy of the trust agreement; and

(iii) a copy of each eligible association´s constitution, bylaws, and articles of incorporation;

(E) A company that has received approval for a filing to be issued to associations participating in a multiple association trusteed arrangement shall notify the department of any subsequent additions of participating associations upon enrollment and shall include the documentation required in subparagraph (D) of this paragraph for each association that joins the trust after approval of the initial filing;

(F) Filings to be issued to a multiple employer trusteed group:

(i) shall be accompanied by a copy of the trust agreement;

(ii) shall include an alternate face page for each related industry group, with a unique form number assigned; and

(iii) may be submitted on an "ABC Trust" basis provided that, if approved, each time the form is issued to a different eligible trust, the company shall submit:

(I) a copy of the individual trust agreement; and

(II) an alternate face page, identifying the policyholder, the industry, and the policy number assigned to each industry.

(d) The department may request any additional information necessary for a comprehensive review of any form.

§3.7. Form Acceptance and Procedures.

(a) Acceptance or Rejection.

(1) A filing received by the department which is in compliance with the requirements of this subchapter and §7.1302 of this title (relating to Billing System) will be accepted and processed according to subsection (b) of this section.

(2) A filing received by the department which fails to comply with this subchapter and §7.1302 of this title will be rejected and returned to the company with a letter or electronic notification indicating the reason(s) for the rejection.

(b) Accepted Filings.

(1) Review period for filings subject to approval. Filings subject to approval will be reviewed for compliance with the Insurance Code, this title, or any other applicable law of this state or the United States. Such filings, after review, will be affirmatively approved or disapproved within the applicable statutory deemer period, unless the department initiates a request for correction as set forth in subsection (c) of this section.

(2) Date for exempt filings. Filings submitted pursuant to Subchapter Z of this chapter (relating to Exemption from Review and Approval of Certain Life, Accident, Health, and Annuity Forms and Expedition of Review) are considered exempt as of the date received by the department; however, such filings are subject to audit as specified in §3.4008 of this chapter (relating to Procedures for Corrections to Non-Compliant Exempt Forms).

(3) Date for informational filings. Informational filings are considered filed as of the date received by the department.

(c) Request for Correction.

(1) In lieu of issuing a disapproval of a filing, the department may request corrections be made to a form which contains compliance deficiencies provided that at the time of initial notification of any deficiencies, the company either:

(A) requests a 45-day extension of the review period for purposes of bringing the submission into compliance; or

(B) provides a waiver of the company´s right to deem the filing approved.

(2) If the company fails to comply with paragraph (1) of this subsection, a disapproval letter or electronic notification will be sent by the department.

(3) The department may notify a company of a request for corrections by telephone, facsimile transmission, or by written or electronic request.

(4) If a company fails to submit corrections to the department within 30 days after notification of any deficiencies and request for corrections, the department will consider the form withdrawn from review by the company. The department will not give any withdrawn form consideration until the company resubmits the form as a new filing.

(5) If the department finds a form violates or does not comply with the insurance or administrative code and requests corrections, the department may request or, after notice and opportunity for hearing, order that the company either replace any previously used, issued, or delivered form with a corrected form, correct the form by rider, or discontinue using the form.

(d) Disapproval of a Form.

(1) The department may disapprove any form if:

(A) the form fails to comply with any applicable statutes or regulations of this state or the United States;

(B) the content of the form is unjust, encourages misrepresentation, or is in any way deceptive; or

(C) the form is a group filing that has been submitted and accepted for review under a group type that is ineligible under the provisions of the Insurance Code Articles 3.50 §1 and 3.51-6 §§1(a) and 2(a), and §21.2702 (1) and (2) of this title (relating to Definitions).

(2) When the department disapproves a form pursuant to paragraph (1) of this subsection, the department may request that the company replace any form previously used, issued, or delivered, with a corrected form, or correct the form by rider. The department may also request that the company discontinue using the form if, prior to receiving approval from the department, any form has been used, issued, or delivered.

(e) Withdrawal of Approval.

(1) The department may notify any company, by telephone, facsimile transmission, or by written or electronic request, of compliance deficiencies in a previously approved or exempted form. The department may accompany such notice with a request that the company either replace any previously used, issued, or delivered form with a corrected form, correct the form by rider, or discontinue using the form.

(2) The department may, after notice and opportunity for hearing, withdraw previous approval of forms pursuant to Insurance Code Article 3.42(i), (j), or (k).

(3) When the department withdraws approval of a form pursuant to paragraphs of this subsection and the company has previously used, issued, or delivered the form in this state, the department may direct that the company either replace any previously used, issued, or delivered form with a corrected form, correct the form by rider, or discontinue using the form.

(f) Departmental Notice of Action. The department shall send written or electronic notification, when the processing of the filing has been completed, of any actions taken by the department including, but not limited to, approval, disapproval, withdrawal, or exemption of any filing under this subchapter.

(1) Notices of approval will be in the form of a letter or electronic notification stating the form number, if applicable, and the effective date of the approval.

(2) Notices of disapproval will be in the form of a letter or electronic notification stating the form number, if applicable, the effective date of the disapproval, and the compliance deficiencies.

(3) Notices of acceptance for exemption, substitution, and filing for information will be in the form of a letter or electronic notification stating the form number, if applicable, and the date of acceptance of such filing.

(4) Notice of other actions including, but not limited to, audits, deficiencies, non-compliance, and withdrawals will be in the form of a letter or electronic notification stating the form number and any deficiencies, if applicable.

(5) Notices of disapproval that result from a filing being submitted under an ineligible group type as described in subsection (d)(1)(C) of this section will be in the form of a letter or electronic notification stating the form number, if applicable, the effective date of the decision, and that the disapproval resulted from the filing of an ineligible group type. A comprehensive review of the text of the form will not be completed for forms filed for use with ineligible group types.

(6) Companies shall retain the written notification or a copy of the electronic notification as documentation of the department´s action on a form.

(7) The department will maintain copies of the filing and the notice of departmental action and such shall be the official record.

§3.8. Effective Date. The provisions of these sections shall apply to any form received by the department on or after June 1, 2003. Forms received by this department prior to June 1, 2003 shall be governed by the laws in effect at the time of the submission.



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