28 Tex. Admin. Code § 6.202 - Captive Insurance Company Certificate of Authority Application Contents and Process
(a) An applicant
seeking to redomesticate an existing captive insurance company or to form a new
captive insurance company must provide the following information to the
department:
(1) the name of the entity, the
entity's federal employer identification number, and the location and means of
contacting the entity;
(2) the
physical location of the books and records and means of maintaining the books
and records;
(3) the registered
agent for service;
(4) a list of
the service providers that the captive insurance company will use, including
qualified accountants, qualified actuaries, and licensed attorneys;
(5) biographical affidavits for the
individuals described in §
6.303 of this title who provide
necessary functions to operate and govern the captive insurance
company;
(6) the name of the
ultimate controlling person;
(7)
the organizational documents for the captive insurance company, other than a
captive insurance company formed as a captive exchange, including:
(A) a certificate of filing from the Texas
Secretary of State indicating that the entity has been formed or redomesticated
to Texas as an entity under the Business Organizations Code, other than a risk
retention group or general partnership, for the purpose of providing captive
insurance;
(B) an affidavit
satisfactory to the Commissioner from the incorporators, organizers, or
officers of the captive insurance company stating that:
(i) the capital and surplus are the bona fide
property of the company; and
(ii)
the certificate of filing is true and correct; and
(C) if necessary, an affidavit by the
incorporators, organizers, or officers of the captive insurance company
stating:
(i) the number of shares or other
type of equity instrument without par value that are subscribed; and
(ii) the actual consideration received by the
captive insurance company for those shares or other type of equity
instrument;
(8)
a description of how the captive insurance company fits into the affiliated
group's risk management plan and the group's significant operations in the
State of Texas;
(9) if the
application is for the redomestication of a captive insurance company,
information listed in subsection (b) of this section;
(10) if the applicant proposes to insure
controlled unaffiliated business, the information listed in subsection (c) of
this section;
(11) a plan of
operation, including:
(A) the asset page;
liability, capital, and surplus page; income statement page; and cash flow page
for the applicant from the Texas Captive Annual Report that are certified by
two principal officers who have submitted biographical affidavits and:
(i) four years of financial projections, with
a disclosure of the assumptions the applicant is using to develop the projected
financial statements; and
(ii) if
applicable, the most recent three years of operational results, in United
States dollars; however, if the applicant has not been in operation for three
or more years, the applicant must submit operational results, in United States
dollars, for each year it has been in operation;
(B) a description of the lines of business
and perils that the captive insurance company proposes to cover and the limits
of coverage;
(C) a list of the
affiliates that the applicant proposes to insure;
(D) a description of the reinsurance programs
proposed including the lines of business that are affected, limits of
reinsurance coverage, and the counterparties that will be involved;
(E) an organizational chart listing all
affiliates of the applicant's affiliated group;
(F) agreements with any captive management
companies the applicant proposes to use;
(G) a copy of the applicant's investment
strategy;
(H) an explanation of how
the applicant intends to handle profits, including a statement about how
dividends will be evaluated;
(I) an
independent actuarial report that evaluates the feasibility of the applicant's
plan of operation;
(J) details of
how the parent entity will maintain and support the captive insurance company,
including ensuring compliance with Texas statutes and rules; and
(K) evidence of the financial wherewithal of
the affiliate group, including affiliated persons, to retain the risk using the
captive insurance company; and
(12) an affidavit by two principal officers
or members of the governing committee who have submitted biographical
affidavits that the information provided in paragraphs (1) - (11) of this
subsection is true and correct.
(b) An application for a redomestication must
include:
(1) the applicant's current domicile
jurisdiction;
(2) if the applicant
has been examined:
(A) the date of the most
recent examination; and
(B) a copy
of the most recent examination report;
(4) a
letter of no objection or release from the captive insurance company's current
domicile.
(c) If the
applicant proposes to insure a controlled unaffiliated business, the following
documentation must be provided with the application:
(1) copies of the agreement(s) that evidence
an existing contractual relationship between the parties, one of which must be
a captive insurance company affiliate;
(2) a description and any supporting
documentation that evidences that the captive insurance company affiliate bears
the risk of a potential financial loss associated with the contract beyond the
affiliate having to pay a fee; and
(3) a description and any supporting policies
that document that a captive insurance company affiliate controls the risk
management function of the controlled unaffiliated business.
(d) If the applicant proposes to
form as a captive exchange under Insurance Code Chapter 964, Subchapter C, the
applicant must provide the following information:
(1) A copy of the power of attorney executed
by each subscriber appointing the attorney in fact;
(2) A copy of the subscriber declaration
meeting the requirements of Insurance Code §
964.101(a)(2)
and §
964.106;
(3) A copy of the attorney in fact's articles
of incorporation, or other governing document, that details the composition of
the governing body and what constitutes a quorum;
(4) a certificate of filing from the Texas
Secretary of State indicating that the attorney in fact has been formed or
redomesticated to Texas as an entity under the Business Organizations Code,
other than a risk retention group or general partnership, for the purpose of
providing captive insurance;
(e) The department may accept similar
information prepared in a similar format for a nonaffiliated third party,
including a regulator, bank, or similar user, to the extent that the
information satisfies one or more of the requirements in subsections (a) - (d)
of this section to the satisfaction of the Commissioner.
(f) The applicant may submit a written
request for the Commissioner to waive or grant a conditional exception to any
portion of the application or information required under this section. At the
Commissioner's sole discretion, the Commissioner may grant the waiver in
writing, if the Commissioner determines the requirement or information is not
applicable or provides no additional value in reviewing the application. At the
Commissioner's sole discretion, the Commissioner may grant a conditional
exception that will be listed in the certificate of authority issued as
described in §
6.203(b) of this
title.
Notes
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