28 Tex. Admin. Code § 6.407 - Loans to Affiliates
(a) Except as
provided in subsection (d) of this section, the captive insurance company must
submit a written request to the commissioner for prior approval of a loan
agreement with an affiliate.
(b)
Terms of the loan agreement under subsection (a) of this section must:
(1) be fair and equitable;
(2) prohibit advancement of funds by the
captive insurance company to the affiliate except as defined in the
agreement;
(3) include standards
for termination of the agreement with and without cause; and
(4) specify that, if the captive insurance
company is placed in receivership or seized by the commissioner under Insurance
Code Chapter 443:
(A) all of the rights of
the captive insurance company under the agreement extend to the receiver or
commissioner; and
(B) all books and
records will immediately be made available to the receiver or the commissioner
and must be turned over to the receiver or commissioner immediately on the
receiver's or the commissioner's request.
(c) The request under subsection (a) of this
section must be labeled as "Loans to Affiliates - Captives" and include the
following information:
(1) the name of the
captive insurance company and affiliate;
(2) the home office address of the
affiliate;
(3) the relationship of
the affiliate to the captive insurance company, for example, parent entity or
affiliate;
(4) a description of the
loan, including:
(A) a statement of the nature
of the loan and the reasons for entering into or changing the loan;
(B) a statement of how the loan complies with
subsection (b) of this section;
(C)
the proposed effective date of the loan;
(D) the financial impact of the loan on the
captive insurance company;
(E) a
description of the maximum amount the captive insurance company will be
obligated to make available under the loan, the date on which the loan will
terminate, and any provisions for the accrual or deferral of interest;
and
(F) a description of the amount
and source of funds or any other assets for the loan.
(d) If the captive insurance
company is affiliated with an insurer that is part of an insurance holding
company system and subject to Insurance Code Chapter 823, the captive insurance
company must comply with the requirements under §
6.410 of this title (relating to
Application of Holding Company Requirements).
Notes
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