SUBCHAPTER D. Risk Retention Groups and Purchasing Groups
28 TAC §13.313
1. INTRODUCTION.The Texas Department of Insurance proposes an amendment to §13.313, concerning the annual registration filing date for purchasing groups. The proposed amendment is necessary to change the current annual registration filing dates and to establish a single annual registration filing date requirement for purchasing groups of on or before July 1 of each year. The proposed amendment to §13.313(c) requires each purchasing group to file current information on or before July 1 of each year instead of the existing requirement that such current information be filed on or before each purchasing group’s policy anniversary date each year. This change to a single annual registration filing date is necessary because the current registration filing requirement, which allows for multiple registration filing dates, results in an inefficient use of Department resources, and this problem can be eliminated by requiring the same annual registration filing date for all purchasing groups. In addition, purchasing group industry representatives have requested that the Department consider adopting a single annual registration filing date for all purchasing groups because the majority of states have already done so. A single annual registration filing date will help standardize the requirements in Texas with those in other states. The proposed amendment also requires each purchasing group to file its current information on Form PG1R instead of Form PG1. This change is necessary because Form PG1R specifically requires only information directly relevant to the renewal of a purchasing group’s registration, whereas Form PG1 requires all information relevant to the initial registration of a purchasing group. The proposed amendments also amend §13.313(a) and (b) to replace the reference to the State Board of Insurance with a reference to the Commissioner of Insurance. This change is necessary because the State Board of Insurance was abolished effective September 1, 1994, and the Commissioner of Insurance was granted the authority previously granted to the State Board of Insurance, pursuant to Acts 1993, 73rd Legislature, ch. 685, §1.23. Amendments to §13.313(a) and (b) are also proposed to update statutory references in accordance with the nonsubstantive revised Insurance Code. The proposed amendments also delete §13.313(b)(6) which requires the use of Form PG2, a form no longer used because the collection of premium taxes from purchasing groups is a function of the Texas Comptroller of Public Accounts, and not the Department.
2. FISCAL NOTE. Kathy Wilcox, Registrations Officer, Company Licensing and Registration Division, has determined that for each year of the first five years the proposed amendments are in effect, there will be no fiscal implications for state or local government as a result of the amendments, and there will be no effect on local employment or the local economy.
3. PUBLIC BENEFIT/COST NOTE. Ms. Wilcox also has determined that for each year of the first five years the proposed amendments are in effect, the public benefit will be more efficient review of registration statements filed by purchasing groups resulting in more efficient and uniform regulation of purchasing groups subject to the provisions of the Insurance Code Chapter 2201 (formerly Article 21.54), relating to the regulation of purchasing groups and risk retention groups. The proposed amendments will also result in more consistent reporting by domestic and foreign purchasing groups registered to conduct business in Texas. There is no financial cost to persons required to comply as a result of the adoption, enforcement or administration of the proposed amendments. This is because the proposal does not add any new requirements or costs with which businesses, regardless of size, must comply that are not already required. Under the proposal, purchasing groups seeking to maintain their registration to do business in Texas will continue to file annually on a promulgated form.
4. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. As required by the Government Code §2006.002(c), the Department has determined that the proposed amendments to §13.313(c), concerning the establishment of a single annual registration filing date for purchasing groups and the use of Form PG1R will not have an adverse economic effect on small businesses or micro businesses that are required to comply with the proposal. This is because the proposal does not add any new requirements or costs with which businesses, regardless of size, must comply that are not already required. Under the proposal, small or micro business purchasing groups seeking to maintain their registration to do business in Texas will continue to file annually on a promulgated form. In accordance with the Government Code §2006.002(c), the Department has, therefore, determined that a regulatory flexibility analysis is not required because the proposal will not have an adverse impact on small or micro businesses.
5. TAKINGS IMPACT ASSESSMENT. The Department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner’s right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.
6. REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on March 24, 2008, to Gene C. Jarmon, General Counsel and Chief Clerk, Texas Department of Insurance, Mail Code 110-1A, Austin, Texas 78703. An additional copy of the comments must be submitted simultaneously to Kathy Wilcox, Registrations Officer, Company Licensing and Registration Division, Texas Department of Insurance, Mail Code 305-2C, P.O. Box 149104, Austin, Texas 78714-9104. Any request for a public hearing on the proposal should be submitted separately to the Office of the Chief Clerk before the close of the public comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.
7. STATUTORY AUTHORITY. The amendments are proposed under the Insurance Code Chapter 2201 and §36.001. Insurance Code §2201.008 authorizes the Commissioner to adopt rules that are necessary to carry out Chapter 2201, relating to the regulation of risk retention groups and purchasing groups. Insurance Code §36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Department under the Insurance Code and other laws of this state.
8. CROSS REFERENCE TO STATUTE. The following statutes are affected by the proposal: Insurance Code Chapter 2201.
§13.313. Forms Required for Risk Retention Groups and Purchasing Groups.
(a) Requirement for use of specific forms. Risk retention group or purchasing group filings and registrations under the Insurance Code Chapter 2201, [
Article 21.54,] must be effected by using forms promulgated by the commissioner[ State Board] of insurance [ Insurance].
(b) Adoption by reference of forms. The commissioner [
State Board] of insurance [Insurance] adopts by reference standard forms as specified in paragraphs (1) – (6) of this subsection and subsection (c) of this section for use by risk retention groups and purchasing groups which are subject to the provisions of this subchapter and the Insurance Code, Chapter 2201 [ Article 21.54]. The forms are published by the Texas Department [ State Board] of Insurance, and copies of the forms are available from the Company Licensing and Registration Division, Texas Department of Insurance, Mail Code 305-2C, P.O. Box 149104, Austin, Texas 78714-9104 [ Risk Retention Unit, Mail Code 014-5, State Board of Insurance, 1110 San Jacinto Boulevard, Austin, Texas 78701]. The following forms must be utilized, as applicable, under the provisions of this subchapter and the Insurance Code, Chapter 2201 [ Article 21.54].
(1) Risk retention groups seeking to be chartered in this state pursuant to the Insurance Code Chapters 822, 861, and 883, [
Chapters 2, 8, and 15] must utilize Form RRG-A-120.
(2) Risk retention groups seeking to be chartered in this state pursuant to the Insurance Code, Chapter 942 [
Chapter 19] must utilize Form RRG-A-121.
(3) Foreign or alien risk retention groups seeking to do business as a risk retention group in this state must utilize Form RRG-A-122.
(4) All risk retention groups and purchasing groups seeking to do business in this state must utilize Form RRG/PG PC1, for appointing the commissioner as agent for service of process.
(5) Purchasing groups filing a notice of intent and registering to do business in this state under the Insurance Code, §§2201.255 and 2201.256, [
Article 21.54, §7(a),] must utilize Form PG1.
(6) Purchasing groups filing taxes not filed by agent or insurer must utilize Form PG2.]
(7)] Agents filing annual reports as required by the Insurance Code, §2201.007 [ Article 21.54, §10(e),] must use Form PG3.
(c) Annual filing by purchasing groups. On or before July 1 [
its policy anniversary date] each year, beginning in 2008, every purchasing group doing business in this state shall provide the commissioner of insurance with current information on Form PG1R [ PG1, referred to in subsection (b) of this section]; however, there shall be no filing fee for annual filings of Form PG1R [ PG1] after payment of the initial filing fee described in §13.312 of this title (relating to Regulatory Fees).
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