28 Tex. Admin. Code § 7.18 - National Association of Insurance Commissioners Accounting Practices and Procedures Manual
(a) The commissioner
reserves all authority and discretion to resolve any issues in Texas concerning
the proper accounting treatment for an insurance or health plan transaction.
When determining the proper accounting treatment for an insurance or health
plan transaction, the commissioner, insurers, and health maintenance
organizations will refer to the sources in paragraphs (1) - (6) of this
subsection in the respective order of priority listed for guidance on how to
properly record business transactions for the purpose of accurate statutory
reporting and for preparing all financial statements filed with TDI. The
sources in paragraphs (1) - (3) of this subsection preempt any contrary
provisions in the National Association of Insurance Commissioners' (NAIC)
Accounting Practices and Procedures Manual (manual).
(1) Texas statutes;
(2) TDI rules;
(3) directives, instructions, and orders of
the commissioner;
(4) except as
provided in the exceptions, modifications, and exemptions set forth in
subsections (c) and (d) of this section, the manual;
(5) other NAIC handbooks, manuals, and
instructions adopted by TDI; and
(6) Generally Accepted Accounting
Principles.
(b) The
manual described in subsection (a)(4) of this section includes the manual as
amended from time to time, and all the substantive and nonsubstantive changes
to the manual that have been adopted since its last publication. TDI will
maintain a copy of the current manual and all substantive and nonsubstantive
changes that have been adopted since the last publication for public inspection
at its offices.
(c) The
commissioner adopts the following exceptions and modifications to the manual:
(1) Settlement requirements for intercompany
transactions are subject to the accounting treatment in Statement of Statutory
Accounting Principles (SSAP) No. 25 (previously SSAP No. 96 located in Appendix
H), except that amounts owed to the reporting entity must be settled by the due
date in accord with the written agreement and the requirements of §
7.204 of this title. Intercompany
balances must be settled within 90 days of the period for which the amounts are
being billed or the balances will be nonadmitted.
(2) Electronic machines, constituting a data
processing system or systems, and operating systems software used in connection
with the business of an insurance company acquired after December 31, 2000, may
be admitted assets as permitted by Insurance Code §§
841.004,
861.255,
862.001, and any other
applicable law and must be amortized as provided by the manual.
(3) Furniture, labor-saving devices,
machines, and all other office equipment may be admitted as assets as permitted
by Insurance Code §§
841.004,
861.255,
862.001, and any other
applicable law and, for property acquired after December 31, 2000, depreciated
in full over a period not to exceed five years.
(d) A farm mutual insurance company,
statewide mutual assessment company, local mutual aid association, or mutual
burial association that has less than $6 million in annual direct written
premiums is not required to comply with the manual.
(e) Preemptions.
(1) Insurance Code provisions preempting any
contrary provisions in the manual include: §§2551.251 - 2551.261 and
3503.202.
(2) TDI rules preempting
any contrary provisions in the manual include: §§3.1501 - 3.1505, 3.1601 -
3.1608, 3.4505(f), 3.6101, 3.6102, 3.7001 - 3.7009, 3.9101 - 3.9106, 3.9401 -
3.9404, 7.7, 7.85, and 11.803 of this title.
(f) In the event a domestic insurer or health
maintenance organization desires to deviate from the accounting guidance in a
Texas statute or any applicable regulation, the insurer or health maintenance
organization must file a written request for a permitted accounting practice
and obtain approval prior to using the accounting deviation in a financial
statement. The filing must be sent to: Deputy Commissioner, Financial
Regulation Division, Texas Department of Insurance, Mail Code 305-2A, P.O. Box
149104, Austin, Texas 78714-9104, at least 30 days before filing the financial
statement that would be affected by the deviated accounting practice. A
domestic insurer or health maintenance organization must not use a deviated
accounting practice without TDI's prior approval.
(g) This section must not be construed to
either broaden or restrict the authority provided under the Insurance Code to
insurers or health maintenance organizations.
Notes
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