(7) A health maintenance organization or health carrier
described in subsection (b)(3) of this section is subject to a trend
test if its total adjusted capital-to-authorized control level risk-based
capital is between 200 percent and 300 percent and triggers the trend
test determined in accord with the trend test calculation included
in the Health RBC instructions. If the result of the trend test as
determined by the RBC formula and RBC instructions is "YES," the health
maintenance organization or certain health carrier triggers regulatory
attention at the company action level.
(8) A fraternal benefit society described in subsection
(b)(4) of this section is subject to a trend test described in the
RBC formula and RBC instructions, if its total adjusted capital-to-authorized
control level risk-based capital is between 200 percent and 300 percent.
Any fraternal benefit society that trends below 190 percent of total
adjusted capital-to-authorized control level risk-based capital triggers
the company action level.
(h) Prohibition on announcements. Except as required
under this section, a carrier, agent, or other person engaged in the
business of insurance under the Insurance Code is prohibited from
making, publishing, disseminating, circulating, or placing before
the public, or causing, directly or indirectly to be made, published,
disseminated, circulated, or placed before the public, in a newspaper,
magazine, or other publication, or in the form of a notice, circular,
pamphlet, letter, poster, over any radio or television station, or
in any other way, an advertisement, announcement, or statement containing
an assertion, representation, or statement with regard to any component
derived in the calculation. Any violation of this subsection may be
considered a violation of Insurance Code Chapter 541, regulating unfair
methods of competition and unfair or deceptive acts or practices.
(i) Prohibition on use in ratemaking. The RBC instructions
and any related filings are intended solely for use by the commissioner
in monitoring the solvency of carriers and in taking corrective action
with respect to carriers. The RBC instructions and any related filings
may not be:
(1) used by the commissioner for ratemaking;
(2) considered or introduced as evidence in any rate
proceeding; or
(3) used by the commissioner to calculate or derive
any elements of an appropriate premium level or rate of return for
any line of insurance that a carrier or any affiliate is authorized
to write.
(j) Limitations. The requirements of this section do
not reduce the amount of capital and surplus otherwise required by
the Insurance Code, TDI rules, or by authority of the commissioner
as provided by law.
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Source Note: The provisions of this §7.402 adopted to be effective February 7, 2008, 33 TexReg 927; amended to be effective October 26, 2009, 34 TexReg 7309; amended to be effective December 12, 2010, 35 TexReg 10961; amended to be effective February 29, 2012, 37 TexReg 1346; amended to be effective August 11, 2013, 38 TexReg 5106; amended to be effective March 12, 2014, 39 TexReg 1720; amended to be effective July 1, 2015, 40 TexReg 4215 |