Withdrawal Guidelines

 Withdrawal Guidelines

To withdraw or cease writing a line or lines of insurance in the state of Texas an insurance company needs
prior approval of the Commissioner of Insurance (refer to Texas Insurance Code (TIC), 827 and Title 28 of the Texas Administrative Code (TAC) 7.1801 - 7.1808).

In general, there are five (5) types of withdrawals:

Total withdrawal from the State of Texas;
2. Deletion of a line or lines of insurance from the Certificate of Authority;
3. Cease writing a line of insurance, including non-renewal of personal or commercial lines;
4. Reduction of annual premium in a line or lines of insurance by 75% or more; or
5. Reduction of annual premium in a personal line of motor vehicle comprehensive or residential property
insurance by 50% or more.                                                            

Approval of the withdrawal plan is required before notifications of termination or non-renewal are sent to
agents or policyholders.

A separate withdrawal plan must be filed for each insurance company intending to withdraw that meets the
criteria under TIC Chapter 827 Insurance code chapter 827.withdrawal and restriction plans)
and TAC 7.1804(b) (When a Plan is Required Rules & Meetings)

Additional securities may be required to be deposited in Texas in the name of the Commissioner of
Insurance upon finding that there is reasonable cause to conclude that interests of Texas policyholders
would be best served by such deposit.

If the company wishes to surrender its Certificate of Authority at the end of the withdrawal period:

• A Certificate of Authority cannot be canceled until all policyholder obligations are met as provided in the plan of withdrawal.
• A company that has outstanding Texas policyholder liabilities or policies in force, will not receive approval for cancellation of the Certificate of Authority or dissolution of charter.
• A company whose Certificate of Authority has not been canceled must continue to make all statutory filings and pay all statutory fees and assessments until such time as the Certificate of Authority is canceled.
• Statutory deposits will not be released until all policies are terminated or expired and all outstanding losses are paid.

Items to be submitted

•  Withdrawal plan

A withdrawing insurance company must file a plan of orderly withdrawal, the plan must be signed by at least
one officer of the insurer and must contain the following:

• Identification, in accordance with the line of insurance designations in §7.1803 (What Constitutes a
  Line of Insurance Home - Rules & Meetings), of the line or lines of insurance being withdrawn.
• Identification of the policy forms by number and type affected by the withdrawal.
• The dates the insurance company intends to begin and complete its withdrawal.
• An explanation of the reasons for the withdrawal.

(What other options did the insurance company consider other than non-renewing policyholders?
What are the insurance company’s plans going forward?)

• Provisions for notifying all the affected Texas policyholders and certificate holders of the dates of
  the beginning and completion of the total or substantial withdrawal and how the withdrawal will
  affect them, including, but not limited to:   

        1. A copy of the notice and an explanation of how the notice will be provided to policyholders and certificate holders. All notices and other related correspondence to the
           affected insureds should include a reference to www.helpinsure.com for property and casualty lines or www.texashealthoptions.com for health and also reference TDI’s Consumer Protection Help Line at 1-800-252-3439

        2. Either affirmation that such notice will be provided within 30 days of the approval of the withdrawal plan or a request to provide the notice at some other specified date or time, and such request must be approved by the Commissioner;and

        3. Identification of any provision of the TIC or TAC under which notice is mandated.

• Provisions for meeting all the insurance company's contractual obligations, including, but not
  limited to:

     1.  Notification of all affected agents of the date the insurance company intends to begin and complete the withdrawal (disclose if the affected agents are exclusive or independent);

     2.  For fire and casualty insurance companies, a statement affirming compliance with the provisions of TIC 4051, Subchapter H, relating to cancellation of agency contracts
             Insurance code chapter 4051.Property and casualty agents);

     3.  For insurance companies writing liability coverage, a statement affirming the insurance company's compliance with the provisions of TIC Chapter 551, Subchapter B, relating to cancellation and nonrenewal of certain liability insurance coverage Insurance code chapter 551. Practices relating to declination, cancellation and nonrenewal of insurance policies.

     4. For insurance companies writing property and casualty coverage, a statement affirming the insurance company's compliance with the provisions of TIC Chapter 551, Subchapter C, relating to cancellation and nonrenewal of certain property and casualty policy              Insurance code chapter 551.Practices relating to declination,cancellation, and non renewal of insurance policies; 

     5. For insurance companies writing guaranteed renewable or non- cancellable coverage, a statement affirming the insurance company's compliance with the provisions of TIC 1202.051 Insurance code chapter 1202. cancellation and continuation of policies in general relating to cancellation and nonrenewal of certain property and casualty policies.

•  Provisions for providing service to the insurance company's Texas policyholders and claimants. (Will the company or the agents assist affected policyholders in finding coverage? If so, what is the proposed process under consideration?)
•  Information on Texas business, including

          1. the total annual premium volume and the number of policies and certificates and covered persons in Texas for each line to be withdrawn in Texas by county for each line to be withdrawn and the estimated total annual premium volume and number of        policies and certificates and covered persons in Texas by county after withdrawal

          2. an estimate of what percentage of the market for each affected line of insurance in each county the withdrawal impacts; 

          3.  any other information necessary to assist the Commissioner in determining whether a market availability problem is created by the withdrawal; and

          4.  if an insurer is unable to provide the exact number of policies and certificates and covered persons, the insurer must provide estimates and explain how the estimates were determined;

• Provisions for identifying policyholders or certificate holders of special circumstances
• Identification of any third-party contracts which may provide for the continuity of care to enrollees of special circumstances.
• Number of and estimated amount of all losses outstanding in Texas, including claims incurred but not reported.
• A plan to handle the losses specified in paragraph (11) of this subsection, including, but not limited to

         1.  identification of what assets will be available for paying outstanding incurred but not reported claims, claims in the course of settlement, and associated loss adjustment expenses; and

         2.  identification of who specifically will administer the run-off of the business

• If Texas policyholders or certificate holders are to be reinsured, the filing of a reinsurance under all statutory and regulatory requirements and, when applicable, the filing of an assumption certificate;
• Provisions for meeting any applicable statutory obligations, including, but not limited to

        1. payment of any guaranty fund assessments;

        2. participation in any assigned risk plan, pool, fund, facility, or joint underwriting arrangement; and 

        3. payment of any taxes.

• A list of any other products the insurance company will continue to offer in Texas; and
• affirmation that the insurer will comply with §7.1808 of this title (relating to Requirements To Resume Writing Insurance TAC 7.1808