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You are here: Home . rules . 2008 . 0703-059

SUBCHAPTER A. Examination and Financial Analysis

28 TAC §§7.8, 7.15, 7.27, and 7.71
SUBCHAPTER F. Reinsurance 28 TAC §7.613 SUBCHAPTER J. Examination Expenses and Assessments 28 TAC §7.1012
SUBCHAPTER Q. Taxation of Administrative Services 28 TAC §§7.1701 - 7.1711

1. INTRODUCTION. The Commissioner of Insurance adopts the repeal of §§7.8, 7.15, 7.27, 7.71, 7.613, 7.1012, and 7.1701 - 7.1711, concerning corporate and financial regulation. The repeals are adopted without changes to the proposed text published in the April 18, 2008 issue of the Texas Register (33 TexReg 3158). Insurance Code §§404.005(a)(2), 492.055(c), 493.054(c), 802.001, 802.052, 843.151, and 843.155 were added to this adoption order as additional statutory authority for the repeal of the sections.

2. REASONED JUSTIFICATION. Repeal of §7.8, concerning annual statement filing instructions for county mutual insurance companies, is necessary because it is superseded by 28 TAC §7.7(f), concerning insurer accounting requirements for subordinated indebtedness. Repeal of §7.15, concerning premium taxes in Insurance Code §982.114, is necessary because the Department no longer collects premium taxes, and the functions of administering, collecting, and enforcing these premium taxes are the responsibility of the Comptroller of Public Accounts pursuant to the Insurance Code §201.051. Repeal of §7.27, concerning the regulation of accounting for reinsurance agreements by life, accident and health, and annuity insurers, is necessary to eliminate a redundancy between §7.27 and §7.18, and the potential for conflicting interpretations. The substantive provisions of §7.27 are contained in Statement of Statutory Accounting Principle No. 61 and Appendix A-791, which are part of The Accounting Practices and Procedures Manual (Manual) published by the National Association of Insurance Commissioners and adopted by reference in §7.18. Repeal of §7.71, concerning requirements for filing quarterly and annual statements, is necessary because the 2001 quarterly and 2001 annual statements and other reports adopted under the section have been filed and the due dates for such filings have passed. Repeal of §7.613, concerning reinsurance ceded to nonlicensed reinsurers during the transitional period (from September 1, 1989 to the inception, anniversary, or renewal date not less than four months after September 1, 1989), is necessary because the transitional period has expired, and therefore, there no longer is a need for this rule. The repeal of §7.1012, concerning the 2006 foreign and domestic insurance company examination assessments, is adopted because the due dates for filing the overhead assessments assessed under the section have passed; therefore, the repealed section is no longer necessary. Repeal of §§7.1701 - 7.1711, concerning taxation of administrative services, is necessary because the enactment of HB 3315, 80th Legislature, Regular Session, effective June 15, 2007, repealed the administrative service tax under Insurance Code Article 4.11A, and thus, the Department no longer needs these rules to administer this tax function.

The Department identified these sections for repeal as part of the Department's ongoing review of existing rules pursuant to Government Code §2001.039.

3. HOW THE SECTIONS WILL FUNCTION. The adoption of the repeal will result in the removal of obsolete and potentially confusing provisions from the Texas Administrative Code.

4. SUMMARY OF COMMENTS. The Department did not receive any comments on the proposed repeal.

5. STATUTORY AUTHORITY. The repeal is adopted pursuant to the Insurance Code §§404.005(a)(2), 492.055(c), 493.054(c), 802.001, 802.052, 843.151, 843.155, and 36.001. Section 404.005(a)(2) authorizes the Commissioner to establish standards for evaluating the financial condition of an insurer. Sections 492.055(c) and 493.054(c) authorize the Commissioner to adopt reasonable rules relating to the accounting and financial statement requirements of this section and the treatment of reinsurance contracts between insurers, including minimum risk transfer standards, asset debits or credits, reinsurance debits or credits, and reserve debits or credits relating to the transfer of all or any of an insurer's risks or liabilities by reinsurance contracts; and any contingencies arising from reinsurance contracts. Sections 802.001 and 802.052 authorize the Commissioner, as necessary to obtain an accurate indication of the company's condition and method of transacting business, to change the form of any annual statement required to be filed by any kind of insurance company. Section 843.151 authorizes the Commissioner to promulgate rules as are necessary to carry out the provisions of Chapter 843 of the Insurance Code (Health Maintenance Organizations). Section 843.155 requires Health Maintenance Organizations to file annual reports with the Commissioner, which include financial statements of the Health Maintenance Organizations, certified by independent public accountants. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.

6. TEXT.

SUBCHAPTER A. Examination and Financial Analysis

§7.8. Annual Statement Filing Instructions for County Mutual Insurance Companies.

§7.15. Premium Taxes Provided for under the Insurance Code, Art. 3.25.

§7.27. Regulation of Accounting for Reinsurance Agreements by Life, Accident and Health, and Annuity Insurers.

§7.71. Requirement for Filing the 2001 Quarterly and 2001 Annual Statements, Other Reporting Forms, and Diskettes or Electronic Filings with the NAIC via the Internet.

SUBCHAPTER F. Reinsurance

§7.613. Reinsurance Ceded to Nonlicensed Reinsurers during the Transitional Period.

SUBCHAPTER J. Examination Expenses and Assessments

§7.1012. Domestic and Foreign Insurance Company Examination Assessments, 2006.

SUBCHAPTER Q. Taxation of Administrative Services

§7.1701. Definitions.

§7.1702. Form Filings.

§7.1703. Tax Payment Requirements.

§7.1704. Collection and Payment of Tax.

§7.1705. Date for Filing Tax Return and Paying Tax.

§7.1706. Payment under Protest.

§7.1707. Quarterly Prepayment of Taxes.

§7.1708. Application of Other Laws.

§7.1709. Tax Additional.

§7.1710. 1987 Annual Administrative Service Tax Return.

§7.1711. Quarterly Tax Return for Administrative Services--1988.



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