28 TAC §3.309
Subchapter M. Minimum Valuation Standards For Plans With Varying Nonforfeiture Benefits
28 TAC §§3.1201-3.1204
The Texas Department of Insurance proposes the repeal of §3.309 concerning minimum reserves for indeterminate premium reduction policies and §§3.1201-3.1204 concerning minimum valuation standards for plans with varying nonforfeiture benefits. The repeal of §3.309 is necessary to eliminate an obsolete provision. Section 3.309 is no longer required since Subchapter NN, Valuation of Life Insurance Policies was adopted. Sections 3.1201-3.1204 are being proposed for repeal to eliminate the differences between its requirements and §7.18. Section 7.18 adopts by reference the NAIC Accounting Practices and Procedures Manual (Manual). Actuarial Guideline XXXIII in the Manual also prescribes minimum valuation standards for plans with varying nonforfeiture benefits. The repeal of §3.1201-3.1204 will further the objective of the Manual to codify statutory accounting guidance into a single source in order to improve consistency in the regulations applicable to the accounting standards, treatments and practices of insurers doing business in Texas.
Betty Patterson, Senior Associate Commissioner, Financial Program has determined that, for the first five-year period the repeal of the sections will be in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal, and there will be no effect on local employment or local economy.
Ms. Patterson also has determined that, for each year of the first five years the repeal of the sections will be in effect, the public benefit anticipated as a result of the repeal of the sections will be improved consistency in the regulations applicable to the accounting standards, treatments and practices of insurers doing business in Texas and enhanced comparability of financial statements of insurers domiciled in different states. There is no economic cost to persons who are required to comply with the repeal as proposed. The department finds it is neither legal nor feasible to reduce the effect of the proposed repeal for micro or small businesses. The solvency of an insurer is measured, in part, by the reserves it is required to keep. These reserves must be calculated fairly and objectively, regardless of the size of the insurer.
To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on December 9, 2002 to Gene C. Jarmon, Acting 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 must be simultaneously submitted to Betty Patterson, Senior Associate Commissioner, Financial Program, Mail Code 305-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. A request for a public hearing should be submitted separately to the Office of the Chief Clerk.
The repeal of the sections is proposed under the Insurance Code Article 3.28 and §36.001. Article 3.28 is the Standard Valuation Law for life insurance policies. Article 3.28, §§3 and 11 authorize the commissioner to adopt actuarial tables and regulations concerning computations under the Standard Valuation Law. Section 36.001 authorizes the commissioner to adopt rules for the conduct and execution of the duties and functions of the department as authorized by statute.
Insurance Code Article 3.28 is affected by this proposal.
§3.309. Minimum Reserves.
§3.1201. Scope.
§3.1202. Minimum Valuation Standards for Life Insurance Plans.
§3.1203. Minimum Valuation Standards for Certain Annuity Contracts and Annuity Riders.
§3.1204. Minimum Valuation Standards for Other Annuity Plans.