| (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.
|
| Source Note: The provisions of this §7.18 adopted to be effective January 1, 2001, 25 TexReg 12806; amended to be effective January 1, 2002, 26 TexReg 10897; amended to be effective January 1, 2003, 27 TexReg 12281; amended to be effective March 15, 2004, 29 TexReg 2647; amended to be effective March 7, 2005, 30 TexReg 1287; amended to be effective February 26, 2006, 31 TexReg 1035; amended to be effective October 22, 2007, 32 TexReg 7470; amended to be effective April 27, 2008, 33 TexReg 3293; amended to be effective August 6, 2009, 34 TexReg 5134; amended to be effective January 9, 2011,35 TexReg 11866; amended to be effective October 22, 2012, 37 TexReg 8329; amended to be effective February 11, 2013, 38 TexReg 661; amended to be effective December 2, 2014, 39 TexReg 9358 |
