| (a) Single state company. A single state company is
a domestic company that is licensed and doing business only in this
state. A domestic company is doing business only in this state if
the company does not have direct or assumed risks for policies issued
outside of this state.
(b) Single state exemption. The commissioner may grant
a single state company a single state exemption from the NAIC Valuation
Manual principle-based valuation requirements for specific product
forms or product lines. This exemption is a single state exemption.
(1) To request approval for a single state exemption,
a company must submit a written request to TDI and include detailed
information regarding the request for the exemption. The request should
identify the product forms or product lines proposed for the single
state exemption. An exemption is not considered approved until written
approval is issued by the commissioner or his designee.
(2) A single state company granted a single state exemption
must compute reserves using the assumptions and methods that it used
before January 1, 2017. Single state company business exempted by
the commissioner with a single state exemption must be reserved with
assumptions and methods required by the NAIC Valuation Manual other
than the principle-based valuation requirements.
(3) A single state company granted a single state exemption
must comply with all other requirements of the NAIC Valuation Manual,
including the actuarial opinion and memorandum requirements of the
NAIC Valuation Manual.
(4) The commissioner may revoke a single state exemption
by revoking the exemption in writing if the reserving methods and
assumptions do not adequately reflect the company's risks or if the
company no longer qualifies for the exemption under Insurance Code
§425.077. A single state exemption may also be revoked if the
commissioner determines that the NAIC Valuation Manual principle-based
reserving would be more appropriate for protection of Texas policyholders
and industry.
(c) Adequacy analysis requirement exemption. A single
state company may be granted an exemption by the commissioner from
the asset adequacy analysis requirement for the actuarial opinion
in the NAIC Valuation Manual. This exemption is an asset adequacy
analysis exemption.
(1) A single state company must request an asset adequacy
analysis exemption in writing to the commissioner and provide support
as to why an asset adequacy analysis is not needed for its business.
An exemption is not considered approved until written approval is
issued by the commissioner or his designee.
(2) A single state company granted an asset adequacy
analysis exemption must comply with other requirements for the actuarial
opinion in the NAIC Valuation Manual.
(3) The commissioner may revoke an asset adequacy analysis
exemption by revoking the exemption in writing if the asset adequacy
analysis is needed to assess risks or if it is needed for the protection
of Texas policyholders and industry. The commissioner may also revoke
an asset adequacy analysis exemption if the company no longer qualifies
as a single state company.
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