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Subchapter A. Examination and Financial Analysis

28 TAC §7.65

The Texas Department of Insurance proposes new §7.65 concerning 2002 annual and quarterly statement blanks, other reporting forms, electronic data filings with the National Association of Insurance Commissioners (NAIC) via the Internet and instructions to be used by insurers and certain other entities regulated by the Texas Department of Insurance when reporting their financial condition and business operations and activities of the 2002 calendar year. The information provided by the completion of the forms is necessary to allow the department to monitor the solvency, business activities and statutory compliance of the insurers and other entities regulated by the department. The new section defines terms relevant to the statement blanks and reporting forms; provides the dates by which certain reports are to be filed; and proposes to adopt by reference the NAIC 2002 annual and 2002 quarterly statement blanks, other reporting forms and instructions for reporting the financial condition and business operations and activities; and requires insurance companies and certain other regulated entities to file such annual and quarterly statements and other reporting forms with the department and/or the NAIC as directed. Subsection (a) explains the purpose of the section and adopts by reference the forms described in the section. Subsection (b) defines terms used in the section. Subsection (c) describes the hierarchy of laws in the event of a conflict between the Insurance Code, this section and other regulations. Subsections (d)-(l) describe the forms, instructions and filing requirements for the various types of insurers and other regulated entities. Subsection (m) provides the department may request financial reports other than those specified in this section. Copies of the forms and instructions are available for inspection in the office of the Financial Analysis and Examinations Activity of the Texas Department of Insurance, William P. Hobby Jr. State Office Building, 333 Guadalupe, Building 3, Third Floor, Austin, Texas. The new section will replace existing §7.65 which concerned the adoption of the 1995 annual and 1996 quarterly statement filings and is proposed for repeal elsewhere in this issue of the Texas Register.

Betty Patterson, CPA, AFE, Senior Associate Commissioner, Financial Program, has determined that for the first year the section will be in effect, there will not be fiscal implications for state government as a result of enforcing or administering the section. There will be fiscal implications in connection with the filing of annual statements in 2003 as a result of Insurance Code Article 1.11. Under Article 1.11, insurers are required to file a copy of their annual statement with the NAIC. However, Article 1.11 also provides that insurers cannot be required to pay any costs or expenses (other than the expense of preparing and furnishing the annual statement to the NAIC) for the filing of the annual statement with the NAIC; therefore such costs are paid by the department to the NAIC. There will be no effect on local government or local employment for the first year of the five-year period the section will be in effect. There will not be fiscal implications for the remaining four years the section is in effect since the section is applicable to financial reporting for 2002 with the final report being due in 2003.

Ms. Patterson has also determined that, for each year of the first five years this section, as proposed, is in effect, the public benefits anticipated as a result of enforcing this section are the ability of the department to provide financial information to the public and other regulatory bodies as requested, and to monitor the financial condition of insurers and other regulated entities licensed in Texas to better assure financial solvency. Such insurers and other regulated entities are generally required by statute to provide the department with annual reports on their operations. These reports generally summarize information already captured or created by the insurer or other regulated entity in its normal course of business. The probable economic cost to insurers and other regulated entities required to comply with this proposed section is estimated to be no more than $3,500. Such estimated cost may be lower based upon factors such as the type of company (e.g. life, accident and health, or property and casualty); the size of the company (e.g. large or small); the type of business written within a company; and the cost of annual statement software. The department assumes that micro, small and large businesses will utilize employees who are familiar with the records of the insurer or health maintenance organization and accounting practices in general. Such individuals are compensated from $17 to $30 per hour based on the department´s experience. 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 reduce the effect of the proposed section on micro or small insurers subject to the section since the information required by the forms is necessary to effectively regulate and monitor the activities of insurers and other regulated entities 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 July 15, 2002, to Lynda H. Nesenholtz, 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 should be submitted to Betty Patterson, CPA, AFE, Senior Associate Commissioner, Financial Program, Mail Code 305-2A, Texas Department of Insurance, P. O. Box 149099, Austin, Texas 78714-9099. A request for a public hearing on the proposal should be submitted separately to the Office of the Chief Clerk.

The new section is proposed under the Insurance Code Articles 1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.39, 21.43, 21.49, 21.52F, 21.54, 22.06, 23.02, 23.26, and §§32.041 and 36.001. Article 1.11 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 business, and requires certain insurers to make filings with the National Association of Insurance Commissioners. Articles 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.49, 21.54, 22.06, 23.02, and 23.26 require the filing of financial reports and other information by insurers and other regulated entities, and specify particular rulemaking authority of the commissioner relating to those insurers and other regulated entities. Article 21.39 requires insurers to establish adequate reserves and provides for the adoption of each current formula for establishing reserves applicable to each line of insurance. Article 21.43 provides the conditions under which foreign insurers are permitted to do business in this state and requires foreign insurers to comply with the provisions of the Insurance Code. Article 21.52F authorizes the commissioner to adopt rules to implement the regulation of nonprofit health corporations holding a certificate of authority under that article. Section 32.041 requires the department to furnish the statement blanks and other reporting forms necessary for companies to comply with the filing requirements. Section 36.001 provides that the commissioner may adopt rules for the conduct and execution of the duties and functions of the department as authorized by statute for general and uniform application.

The following articles and section of the Insurance Code will be affected by this proposed section: Articles 1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.39, 21.43, 21.49, 21.52F, 21.54, 22.06, 23.02 and 23.26, and §32.041.

§7.65. Requirements for Filing the 2002 Quarterly and 2002 Annual Statements, Other Reporting Forms, and Electronic Data Filings with the NAIC.

(a) Scope. This section provides insurers and other regulated entities with the requirements for the 2002 quarterly statements, 2002 annual statement, other reporting forms, and electronic data filings via the Internet with the National Association of Insurance Commissioners (NAIC) necessary to report information concerning the financial condition and business operations and activities of insurers. This section applies to all insurers and other regulated entities authorized to do the business of insurance in this state and includes, but is not limited to, life insurers; accident insurers; life and accident insurers; life and health insurers; accident and health insurers; life,accident and health insurers; mutual life insurers; stipulated premium insurers; group hospital service corporations; fire insurers; fire and marine insurers; U.S. Branch of an alien insurer; Mexican casualty insurers; general casualty insurers; fire and casualty insurers; mutual insurers other than life; exempt associations; county mutual insurers; Lloyd's plans; reciprocal and inter-insurance exchanges; domestic risk retention groups; domestic joint underwriting associations; title insurers; fraternal benefit societies; farm mutual insurers; health maintenance organizations; nonprofit health corporations; nonprofit legal services corporations; the Texas Health Insurance Risk Pool; the Texas Mutual Insurance Company (successor to the Texas Workers´ Compensation Insurance Fund); and the Texas Windstorm Insurance Association. The commissioner adopts by reference, the 2002 NAIC quarterly statement blanks, the 2002 NAIC annual statement blanks and the related instruction manuals, and other reporting forms specified in this section. The annual and quarterly statement blanks and other reporting forms are available from the department, Financial Analysis and Examinations Activity, Mail Code 303-1A, P. O. Box 149099, Austin, Texas 78714-9099. Insurers and other regulated entities shall properly report to the department and the N AIC by completing the appropriate annual and quarterly statement blanks, prepared with laser quality print (hand written copies must be prepared legibly using black ink), other reporting forms, and electronic data filings with the NAIC via the Internet following the applicable instructions as outlined in subsections (d) - (m) of this section.

(b) Definitions. The following words and terms, when used in this section, shall have the following meanings:

(1) Association edition - Blanks and forms promulgated by the NAIC.

(2) Commissioner - The commissioner of insurance appointed under the Texas Insurance Code.

(3) Department - The Texas Department of Insurance.

(4) Texas edition - Blanks and forms promulgated by the commissioner.

(c) Conflicts with other laws. In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, instructions, or any specific requirement of this section and the NAIC instructions listed in this section, then and in that event, the Insurance Code, the department's promulgated rule, form, instruction, or the specific requirement of subsections (d) ­ (m) of this section shall take precedence and in all respects control.

(d) Filing requirements for life, accident and health insurers. Each life, life and accident, life and health, accident, accident and health, mutual life, or life, accident and health insurance company, stipulated premium insurance company, group hospital services corporation and the Texas Health Insurance Risk Pool shall complete and file the blanks, forms, or electronic data filings as directed in this subsection. (This subsection does not apply to health maintenance organizations. Filing requirements for health maintenance organizations are described in subsection (h) of this section.) The forms and reports identified in paragraphs (1)(A)-(C); (1)(F) and (G); (2)(A)-(C); and (3)(A)-(J) of this subsection shall be completed in accordance with the 2002 NAIC Annual Statement Instructions, Life, Accident and Health. The forms and reports identified in paragraphs (1)(D)-(G); (2)(A) and (B); (3)(B), (D) and (E) of this subsection shall be completed in accordance with the 2002 NAIC Health Annual Statement Instructions. The electronic data filings with the NAIC via the Internet identified in paragraph (3)(K) and (L) of this subsection shall be in accordance with the NAIC data specifications and instructions for internet filing and shall include PDF format filing. Insurers described under this subsection that reported 100% of their total direct premiums as health premiums for the calendar year ending December 31, 2001 may elect to file on the NAIC Health statement blank for the three quarters of 2002 and the calendar year 2002 if the insurer wrote "health premiums" as defined in the 2002 NAIC Health Annual Statement Instructions. Those instructions describe health premiums to include hospital, surgical and major medical; Medicare supplement business reportable in the Medicare Supplement Insurance Experience Exhibit of the annual statement; dental and vision only coverage issued as stand alone or as a rider to a medical policy that is not related to the medical policy through deductibles or out of pocket limits ; federal employees health benefits plan premiums (FEHBP); Title XVIII ­ Medicare premiums; Title XIX ­ Medicaid premiums that result from an arrangement between the company and a Medicaid state agency for services to a Medicaid beneficiary; and other health premiums such as stop loss, disability income, long term care, and other. If a reporting entity qualifying under this subsection, elects to use the health annual statement, it must continue to use that annual statement for a minimum of three years or obtain written approval from its domestic state to change to another type of annual statement. Foreign companies that wrote less than 100% of health premiums in 2001 may file on the health annual statement blank if permitted or required by their domiciliary state.

(1) Reports to be filed both with the department and the NAIC include the following:

(A) 2002 Life, Accident and Health Annual Statement (association edition) for the 2002 calendar year to be filed on or before March 1, 2003 (stipulated premium insurance companies, April 1, 2003);

(B) 2002 Life, Accident and Health Annual Statement of the Separate Accounts (association edition) for the 2002 calendar year (required of companies maintaining separate accounts), to be filed on or before March 1, 2003 ;

(C) 2002 Life, Accident and Health Quarterly Statements (association edition), to be filed on or before May 15, August 15, and November 15, 2002. However, a Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file quarterly statements with the department or the NAIC if it meets all three of the following conditions:

(i) it is authorized to write only life insurance on its certificate of authority;

(ii) it collected premiums in the prior calendar year of less than $1 million; and

(iii) it had a profit from operations in the prior two calendar years.

(D) 2002 Health Quarterly Statements (association edition), to be filed on or before May 15, August 15, and November 15, 2002 if the company qualifies as described in this subsection;

(E) 2002 Health Annual Statement (association edition) for the 2002 calendar year, to be filed on or before March 1, 2003 if the company qualifies as described in this subsection;

(F) Management's Discussion and Analysis, to be filed as part of the 2002 Life, Accident and Health Annual Statement on or before April 1, 2003, or if the 2002 Health Annual Statement is required, then filed as part of the 2002 Health Annual Statement on or before April 1, 2003;

(G) Actuarial Opinion, to be attached to the Life, Accident and Health Annual Statement or Health Annual Statement, as applicable, and in accordance with paragraph (4) of this subsection;

(2) Reports to be filed only with the department:

(A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), to be filed on or before March 1, 2003. This filing is also required if filing a Health Annual Statement, as applicable;

(B) Supplemental Compensation Exhibit (association edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003 (stipulated premium companies, April 1, 2003). This filing is also required if filing a Health Annual Statement, as applicable;

(C) The Texas Health Insurance Risk Pool shall file the 2002 Life, Accident and Health Annual and Quarterly Statements as follows:

(i) 2002 Life, Accident and Health Annual Statement (association edition), with only pages 1 - 5, the Notes to Financial Statements on page 19 and Schedule E Part 1 on page E24 to be completed and filed on or before March 1, 2003.; and

(ii) 2002 Life, Accident and Health Quarterly Statement (association edition), with only pages 1-5, the notes on page 7 and Schedule E on page E08 to be completed and filed on or before May 15, August 15, and November 15, 2002.

(iii) The Texas Health Insurance Risk Pool is not required to file any reports, diskettes, or electronic data filings with the NAIC.

(D) Texas Overhead Assessment Form (Texas edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003 (stipulated premium insurance companies, April 1, 2003);

(E) Analysis of Surplus (Texas edition) for life, accident and health insurers, to be filed on or before March 1, 2003 (stipulated premium insurance companies, April 1, 2003);

(F) Supplemental Investment Income Exhibit (Texas edition) (shows percent of net investment income by type of investment), to be filed with the annual statement on or before March 1, 2003 (stipulated premium companies, April 1, 2003); and

(G) Texas Supplemental Form - Number of Persons Covered Under Texas Health Policies, as an attachment to the Texas state page of the annual statement. This filing is also required if filing a Health Annual Statement, as applicable.

(3) Reports or electronic data filings via the Internet filed only with the NAIC:

(A) Trusteed Surplus Statement (association edition), Life, Accident and Health Supplement (required of the U. S. branch of an alien insurer), to be filed on or before May 15, August 15, November 15, 2002 and March 1, 2003 with the annual statement;

(B) Medicare Supplement Insurance Experience Exhibit (association edition) (for insurers writing Medicare supplement business), to be filed on or before March 1, 2003. This filing is also required if filing a Health Annual Statement, as applicable;

(C) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit business), to be filed on or before April 1, 2003;

(D) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), to be filed on or before March 1, 2003 (stipulated premium insurance companies, April 1, 2003). This filing is also required if filing a Health Annual Statement, as applicable;

(E) Long-Term Care Experience Reporting Forms (association edition) (required of companies writing long-term care business), to be filed on or before April 1, 2003. This filing is also required if filing a Health Annual Statement, as applicable;

(F) Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), to be filed on or before April 1, 2003;

(G) Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), to be filed on or before April 1, 2003;

(H) Adjustments to the Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), to be filed on or before April 1, 2003;

(I) Workers' Compensation Carve-Out Supplement, to be filed on or before March 1, 2003;

(J) Supplemental Investment Risks Interrogatories, to be filed on or before April 1, 2003;

(K) Electronic data filings via the Internet containing annual statement data, to be filed on or before March 1, 2003 (stipulated premium insurance companies, April 1, 2003); and

(L) Electronic data filings via the Internet containing quarterly statement data, to be filed on or before May 15, August 15, and November 15, 2002. A Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file quarterly electronic data filings via the Internet with the NAIC if it meets all three of the following conditions:

(i) it is authorized to write only life insurance on its certificate of authority;

(ii) it collected premiums in the prior calendar year of less than $1 million; and

(iii) it had a profit from operations in the prior two calendar years.

(4) Actuarial opinions required by paragraph (1)(G) of this subsection shall be in accordance with the following:

(A) Unless exempted, the statement of actuarial opinion, attached to either the Life, Accident and Health Annual Statement or the Health Annual Statement, should follow the applicable provisions of §§3.1601-3.1611 of this title (relating to Actuarial Opinion and Memorandum Regulation).

(B) For those companies exempted from §§3.1601-3.1611 of this title, instructions 1-12, established by the NAIC, must be followed.

(C) Any stipulated premium company subject to §§3.1601-3.1611 of this title which does not insure or assume risk on contracts with death benefits, cash value, or accumulation values on any one life in excess of $15,000, except as permitted by Insurance Code Article 22.13, §1(b), is exempt from submission of a statement of actuarial opinion in accordance with §3.1608 of this title (relating to Statement of Actuarial Opinion Based on an Asset Adequacy Analysis), but must submit an actuarial opinion pursuant to §3.1607 of this title (relating to Statement of Actuarial Opinion Not Including an Asset Adequacy Analysis).

(D) Any company required by §3.4505(b)(3)(I) of this title (relating to General Calculation Requirements for Basic Reserves and Premium Deficiency Reserves) to opine on the application of X factors, shall attach this opinion to the Life, Accident and Health Annual Statement or the Health Annual Statement, as applicable.

(e) Requirements for property and casualty insurers. Each fire, fire and marine, general casualty, fire and casualty, or U.S. Branch of an alien insurer, county mutual insurance company, mutual insurance company other than life, Lloyd's plan, reciprocal or inter-insurance exchange, domestic risk retention group, life insurance company that is licensed to write workers' compensation, any farm mutual insurance company that filed an NAIC property and casualty annual statement for the 2001 calendar year or had gross written premiums in 2002 in excess of $5,000,000, any Mexican non-life insurer licensed under any article of the Insurance Code other than, or in addition to, Insurance Code Article 8.24, domestic joint underwriting association, the Texas Mutual Insurance Company (successor to the Texas Workers´ Compensation Insurance Fund) and the Texas Windstorm Insurance Association shall complete and file the following blanks, forms, and diskettes or electronic data filings as directed by this subsection. The forms and reports identified in paragraphs (1)(A)-(E); (2)(A)-(C); and (3)(A)-(H) of this subsection shall be completed in accordance with the 2002 NAIC Annual Statement Instructions, Property and Casualty. The diskettes or electronic version of the filings with the NAIC via the Internet identified in paragraph (3)(I)-(K) of this subsection shall be in accordance with the NAIC data specifications and instructions and shall include PDF format filing.

(1) Reports to be filed both with the department and the NAIC:

(A) 2002 Property and Casualty Annual Statement (association edition), to be filed on or before March 1, 2003;

(B) 2002 Property and Casualty Quarterly Statements (association edition), to be filed on or before May 15, August 15, and November 15, 2002;

(C) 2002 Combined Property/Casualty Annual Statement (association edition), to be filed on or before May 1, 2003. This statement is required only for those affiliated insurers that wrote more than $35 million in direct premiums as a group in calendar year 2002, as disclosed in Schedule T of the Annual Statement(s);

(D) Management's Discussion and Analysis, to be filed on or before April 1, 2003;

(E) Actuarial Opinion to be filed with the annual statement; and

(2) Reports to be filed only with the department:

(A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), to be filed on or before March 1, 2003;

(B) Supplemental Compensation Exhibit (association edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(C) The Texas Windstorm Insurance Association (Insurance Code Article 21.49) shall complete and file only the following:

(i) Property and Casualty Annual Statement (association edition), to be filed on or before March 1, 2003;

(ii) Property and Casualty Quarterly Statement (association edition), to be filed on or before May 15, August 15, and November 15, 2002; and

(iii) Management's Discussion and Analysis, to be filed on or before April 1, 2003.

(iv) The Texas Windstorm Insurance Association is not required to file any reports with the NAIC.

(D) Supplemental Investment Income Exhibit (Texas edition) (shows percent of net investment income by type of investment), to be filed with the annual statement on or before March 1, 2003;

(E) Texas Overhead Assessment Form (Texas edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(F) Analysis of Surplus (Texas edition) for property and casualty insurers except Texas county mutual companies, to be filed on or before March 1, 2003;

(G) Supplement for County Mutuals (Texas edition) (required of Texas county mutual companies), to be filed with the annual statement on or before March 1, 2003;

(H) Texas Supplemental A for County Mutuals (Texas edition) (required of Texas county mutual companies), to be filed with the annual statement on or before March 1, 2003; and

(I) Texas Supplemental Form-Number of Persons Covered Under Texas Health Policies), as an attachment to the Texas state page of the annual statement.

(3) Reports or electronic data filings via the Internet filed only with the NAIC:

(A) Medicare Supplement Insurance Experience Exhibit (association edition) (for insurers writing Medicare supplement business), to be filed on or before March 1, 2003;

(B) Trusteed Surplus Statement (association edition) (required of the U. S. branch of an alien insurer), to be filed on or before May 15, August 15, November 15, 2002, and March 1, 2003 with the annual statement;

(C) Supplement "A" to Schedule T, Exhibit of Medical Malpractice Premiums Written (association edition) (required of companies writing medical malpractice business), to be filed on or before March 1, 2003;

(D) Insurance Expense Exhibit (association edition), to be filed on or before April 1, 2003;

(E) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit accident and/or health business), to be filed on or before April 1, 2003;

(F) Long-Term Care Experience Reporting Forms (association edition) (required of companies writing long-term care business), to be filed on or before April 1, 2003;

(G) Financial Guaranty Insurance Exhibit (association edition) (required of companies writing financial guaranty business), to be filed on or before March 1, 2003;

(H) Supplemental Investment Risks Interrogatories, to be filed on or before April 1, 2003;

(I) Electronic data filings via the Internet containing annual statement data, to be filed on or before March 1, 2003;

(J) Electronic data filings via the Internet containing combined annual statement data, to be filed on or before May 1, 2003; and

(K) Electronic data filings via the Internet containing quarterly statement data, to be filed on or before May 15, August 15, and November 15, 2002.

(f) Requirements for fraternal benefit societies. Each fraternal benefit society shall complete and file the following blanks, forms, and electronic data filings for the 2002 calendar year and the three quarters for the 2002 calendar year. The forms and reports identified in paragraphs (1)(A)-(D), (2)(A)-(C), and (3)(A)-(D), (F) and (G) of this subsection shall be completed in accordance with the 2002 NAIC Annual Statement Instructions, Fraternal. The electronic data filings with the NAIC via the Internet identified in paragraph (3)(E) of this subsection shall be in accordance with the NAIC data specifications and instructions and shall include PDF format filing.

(1) Reports to be filed both with the department and the NAIC:

(A) Annual Statement, Fraternal (association edition), to be filed on or before March 1, 2003;

(B) Annual Statement of the Separate Accounts, Fraternal, (association edition) (required of companies maintaining separate accounts), to be filed on or before March 1, 2003;

(C) Management's Discussion and Analysis, to be filed on or before April 1, 2003; and

(D) Actuarial Opinion to be filed with the annual statement.

(2) Reports to be filed only with the department:

(A) Fraternal Quarterly statement (association edition), to be filed on or before May 15, August 15, and November 15, 2002;

(B) Supplemental Compensation Exhibit (association edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(C) Fraternal Benefit Societies Supplement to Valuation Report (association edition) to be filed on or before June 30, 2003; and

(D) Texas Overhead Assessment Form (Texas edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(E) Analysis of Surplus (Texas Edition) for fraternal benefit societies to be filed on or before March 1, 2003; and

(F) Supplemental Investment Income Exhibit (Texas edition) (shows percent of net investment income by type of investment), to be filed with the annual statement on or before March 1, 2003.

(3) Reports and diskettes or electronic data filings via the Internet to be filed only with the NAIC:

(A) Trusteed Surplus Statement (association edition, Fraternal Supplement) (required of the U. S. branch of an alien insurer), to be filed on or before March 1, 2003 with the annual statement;

(B) Medicare Supplement Insurance Exhibit (association edition) (for insurers writing Medicare supplement business) to be filed on or before March 1, 2003;

(C) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), to be filed on or before March 1, 2003;

(D) Long-Term Care Experience Reporting Forms (association edition) (required of companies writing long-term care business), to be filed on or before April 1, 2003;

(E) Electronic data filings via the Internet containing annual statement data, to be filed on or before March 1, 2003; and

(F) Fraternal Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), to be filed on or before April 1, 2003.

(G) Supplemental Investment Risks Interrogatories, due on or before April 1, 2003.

(g) Requirements for title insurers. Each title insurance company shall complete and file the following blanks and forms for the 2002 calendar year and the three quarters of the 2002 calendar year. The reports and forms identified in paragraphs (1)(A)-(C), (2)(A)-(C), and (3)(A) of this subsection shall be completed in accordance with the 2002 NAIC Annual Statement Instructions, Title. The electronic version of the filings with the NAIC via the Internet identified in paragraph (3)(B) of this subsection shall be in accordance with the NAIC data specifications and instructions and shall include PDF format filing.

(1) Reports to be filed with the department and the NAIC:

(A) Title Annual Statement (association edition), to be filed on or before March 1, 2003;

(B) Management's Discussion and Analysis, to be filed on or before April 1, 2003; and

(C) Actuarial Opinion to be filed on or before March 1, 2003;.

(2) Reports to be filed only with the department:

(A) Title Quarterly Statement (association edition), to be filed on or before May 15, August 15, and November 15, 2002;

(B) Supplemental Compensation Exhibit (association edition), (required of Texas domestic companies only), to be filed on or before March 1, 2003; and

(C) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), to be filed on or before March 1, 2003.

(D) Texas Overhead Assessment Form (Texas edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(E) Analysis of Surplus (Texas Edition) for title companies to be filed on or before March 1, 2003; and

(F) Supplemental Investment Income Exhibit (Texas edition) (shows percent of net investment income by type of investment), to be filed with the annual statement on or before March 1, 2003;

(3) Reports to be filed only with the NAIC:

(A) Supplemental Investment Risk Interrogatories, to be filed on or before April 1, 2003; and

(B) Electronic data filings via the Internet containing annual statement data, to be filed on or before March 1, 2003.

(h) Requirements for health maintenance organizations. Each health maintenance organization shall use the NAIC Health blank to file the 2002 annual and 2002 quarterly information. The forms and reports, identified in paragraphs (1)(A)-(D); (2)(A); and (3)(C)-(E) of this subsection shall be completed in accordance with the 2002 NAIC Annual and Quarterly Statement Instructions, Health. The actuarial opinion shall include the additional requirements of the department set forth in paragraph (1)(D) of this subsection. The forms, reports, and diskettes identified in paragraphs (1)(A) and (B), and (2)(B), (C), and (D) of this subsection shall be completed in accordance with instructions provided by the department. The electronic data filings with the NAIC via the Internet identified in paragraph (3)(A) and (B) of this subsection shall be in accordance with NAIC data specifications and instructions and shall include PDF format filing.

(1) Reports to be filed both with the department and the NAIC:

(A) 2002 Health Annual Statement (association edition), to be filed on or before March 1, 2003;

(B) NAIC Health Quarterly Statements (association edition), on or before May 15, August 15, and November 15, 2002. As part of each quarterly filing, include a completed copy of Schedule E ­ part 2 ­ Special Deposits, from the 2002 NAIC Health Annual Statement;

(C) Management´s Discussion and Analysis, to be filed on or before April 1, 2003;

(D) Actuarial Opinion to be filed with the annual statement. In addition to the requirements set forth in the 2002 NAIC Annual Statement Instructions, Health, the department requires that the actuarial opinion include the following:

(i) The statement of actuarial opinion must include assurance that an actuarial report and underlying actuarial workpapers supporting the actuarial opinion will be maintained at the company and available for examination for seven years. The foregoing must be available by May 1 of the year following the year-end for which the opinion was rendered or within two weeks after a request from the commissioner. The suggested wording used will depend on whether the actuary is employed by the company or is a consulting actuary. The wording for an actuary employed by the company should be similar to the following: "An actuarial report and any underlying actuarial workpapers supporting the findings expressed in this Statement of Actuarial Opinion will be retained for a period of seven years in the administrative offices of the company and available for regulatory examination." The wording for a consulting actuary retained by the company should be similar to the following: "An actuarial report and any underlying actuarial workpapers supporting the findings expressed in this Statement of Actuarial Opinion have been provided to the company to be retained for a period of seven years in the administrative offices of the company and available for regulatory examination."

(ii) Under the scope paragraph requirements of section 5 of the instructions relating to the Actuarial Certification in the 2002 NAIC Annual Statement Instructions, Health, the department requires that the actuarial opinion specifically list the premium deficiency reserve as an item and disclose the amount of such reserve.

(2) Reports to be filed only with the department:

(A) Supplemental Compensation Exhibit (association edition), (required of Texas domestic companies only), to be filed on or before March 1, 2003;

(B) HMO Supplement (Texas edition), to be filed quarterly on or before May 15, August 15, November 15, 2002;

(C) Department formatted diskettes containing annual statement data (diskettes provided by the department for entering of health maintenance organization financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before March 1, 2003; and

(D) Department formatted diskettes containing quarterly statement data (diskettes provided by the department for entering of health maintenance organization financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before May 15, August 15, and November 15, 2002.

(E) Texas Overhead Assessment Form (Texas edition) (required of Texas domestic companies only), to be filed on or before March 1, 2003; and

(F) HMO Supplement 2002 Annual Data (Texas edition), to be filed on or before March 1, 2003.

(3) Reports and electronic data filings via the Internet to be filed only with the NAIC.

(A) Diskettes or electronic data filings via the Internet containing annual statement data, to be filed on or before March 1, 2003;

(B) Diskettes or electronic data filings via the Internet containing quarterly statement data, to be filed on or before May 15, August 15, and November 15, 2002;.

(C) Medicare Supplement Insurance Experience Exhibit (association edition) (for insurers writing Medicare supplement business) to be filed on or before March 1, 2003;

(D) Long-Term Care Experience Reporting Form (association edition) (for those insurers writing long-term care), to be filed on or before April 1, 2003;

(E) Supplemental Investment Risk Interrogatories, to be filed on or before April 1, 2003.

(i) Requirements for farm mutual insurers not subject to the provisions of subsection (e) of this section relating to filing requirements for property and casualty insurers. Each farm mutual insurance company shall file the following completed blanks and forms for the 2002 calendar year with the department only, on or before March 1, 2003:

(1) Annual statement (Texas edition);

(2) Texas Overhead Assessment Form (Texas edition);

(3) Actuarial Opinion, unless otherwise exempted.

(j) Requirements for statewide mutual assessment companies, local mutual aid and mutual burial associations, and exempt companies. Each statewide mutual assessment company, local mutual aid association, local mutual burial association, and exempt company shall complete and file the following blanks and forms for the 2002 calendar year with the department only, on or before April 1, 2003:

(1) Annual Statement (Texas Edition) (exempt companies are required to complete all pages except lines 22, 23, 24, 25, and 26 on page 3, the special instructions at the bottom of page 3, and pages 4 - 7);

(2) Texas Overhead Assessment Form (Texas edition);

(3) Release of Contributions Form (Texas edition);

(4) 3 1/2 % Chamberlain Reserve Table (Reserve Valuation) (Texas edition);

(5) Reserve Summary (1956 Chamberlain Table 3 1/2 %) (Texas edition);

(6) Inventory of Insurance in Force by Age of Issue or Reserving Year (Texas edition); and

(7) Summary of Inventory of Insurance in Force by Age and Calculation of Net Premiums (Texas edition).

(k) Requirements for Non-profit Legal Service Corporations. Each non-profit legal service corporation doing business as authorized by a certificate of authority issued under the Insurance Code Chapter 23 shall complete and file the following blanks and forms for the 2002 calendar year with the department only. An actuarial opinion is not required. The following forms are required to be filed on or before March 1, 2003:

(1) Annual Statement (Texas edition);

(2) Texas Overhead Assessment Form (Texas edition);

(l) Requirements for Mexican casualty companies. Each Mexican casualty company doing business as authorized by a certificate of authority issued under the Insurance Code Article 8.24, shall complete and file the following blanks and forms for the 2002 calendar year with the department only. All submissions shall be printed or typed in English and all monetary values shall be clearly designated in United States dollars. The form identified in paragraph (1) of this subsection shall be completed in accordance with the 2002 NAIC Annual Statement Instructions, Property and Casualty, except as provided by this subsection. An actuarial opinion is not required. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. The following blanks or forms are to be filed on or before March 1, 2003:

(1) Annual Statement (association edition); provided, however, only pages 1 - 4, 24, and 108 are required to be completed;

(2) A copy of the balance sheet and the statement of profit and loss from the Mexican financial statement (printed or typed in English);

(3) A copy of the official documents issued by the COMISION NACIONAL DE SEGUROS Y FIANZAS approving the 2002 annual statement; and

(4) A copy of the current license to operate in the Republic of Mexico.

(m) Other financial reports. Nothing in this section prohibits the department from requiring any insurer or other regulated entity from filing other financial reports with the department.



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