| (a) Under Insurance Code §843.156 and for purposes
of this section, the term "insurance company" includes a health maintenance
organization as defined in Insurance Code §843.002.
(b) An insurer not organized under the laws of Texas
(foreign insurance company) must pay the costs of an examination as
specified in this subsection.
(1) Under Insurance Code §401.152, a foreign insurance
company must reimburse the department for the salary and examination
expenses of each examiner and other department employee participating
in an examination of the insurance company allocable to an examination
of the company. To determine the allocable salary for each examiner
and other department employee, the department divides the average
annual examiner's and other department employee's salary by the number
of working hours in a year. The department assesses the company the
part of the annual salary attributable to each working hour the examiner
and other department employee examines the company during a year.
The expenses the department assesses are those actually incurred by
the examiner and other department employee to the extent permitted
by law.
(2) Under Insurance Code §401.152(a-1), a foreign
insurance company examined entirely in a single year, or an exam beginning
in one year and completed in the next year will be assessed using
the rate for the year the exam began, and must pay an annual assessment
in an amount sufficient to meet all other expenses and disbursements
necessary to comply with the laws of this state relating to the examination
of insurers. The amount imposed must be computed in the same manner
as the amount imposed for domestic insurers as applicable under subsection
(c) of this section.
(3) A foreign insurance company must pay the reimbursements
and payments required by this subsection to the department as specified
in each itemized bill the department provides to the foreign insurance
company.
(c) Under Insurance Code §401.151, §401.155,
and Chapter 803, a domestic insurance company must pay examination
expenses and rates of overhead assessment in accordance with this
subsection.
(1) A domestic insurance company must pay the salaries
and expenses of the examiners and other department employees allocable
to an examination of the company. The department divides the average
annual examiner's and other department employee's salary by the number
of working hours in a year, and assesses the company the part of the
annual salary attributable to each working hour the examiner and other
department employee examines the company during a year. The expenses
assessed must be those actually incurred by the examiner and other
department employee to the extent permitted by law.
(2) Except as provided in paragraphs (3) and (4) of
this subsection, the overhead assessment to cover administrative departmental
expenses attributable to examination of companies is:
(A) a percentage, as specified in the Commissioner
order addressed in subsection (e) of this section, of the admitted
assets of the company as of December 31 each relevant year, taking
into consideration the annual admitted assets that are not attributable
to 90 percent of pension plan contracts as defined in §818(a)
of the Internal Revenue Code of 1986 (26 U.S.C. §818(a)); and
(B) a percentage, as specified in the Commissioner
order addressed in subsection (e) of this section, of the gross premium
receipts of the company for each relevant year, taking into consideration
the annual premium receipts that are not attributable to 90 percent
of pension plan contracts as defined in §818(a) of the Internal
Revenue Code of 1986 (26 U.S.C. §818(a)).
(3) Except as provided in paragraph (4) of this subsection,
if a company was a domestic insurance company for less than a full
year during a calendar year, the overhead assessment for the company
is the overhead assessment required under paragraph (2)(A) and (B)
of this subsection divided by 365 and multiplied by the number of
days the company was a domestic insurance company during that calendar
year.
(4) If the overhead assessment required under paragraph
(2)(A) and (B) of this subsection or paragraph (3) of this subsection
produces an overhead assessment of less than $25, a domestic insurance
company must pay a minimum overhead assessment of $25.
(5) The department will base the overhead assessments
on the assets and premium receipts, including direct written and assumed
premiums, reported in the annual statements.
(6) For the purpose of applying paragraph (2)(B) of
this subsection, the term "gross premium receipts" does not include
insurance premiums for insurance contracted for by a state or federal
government entity to provide welfare benefits to designated welfare
recipients or contracted for in accordance with or in furtherance
of the Human Resources Code, Title 2, or the federal Social Security
Act (42 U.S.C. §§301 et seq.).
(d) Under Labor Code §407A.252, a workers' compensation
self-insurance group must pay the salaries and expenses of the examiners
and other department employees allocable to an examination of the
group. To determine the allocable salary for each examiner and other
department employee, the department divides the average annual examiner's
and other department employee's salary by the number of working hours
in a year. The department assesses the group the part of the annual
salary attributable to each working hour the examiner and other department
employee examines the company during a year. The expenses the department
assesses are those actually incurred by the examiner and other department
employee to the extent permitted by law.
(e) The Commissioner will set the average annual examiner's
and other department employee's salary rate and overhead assessment
rates for each year by Commissioner order.
(f) The overhead assessment rates set in the Commissioner
order addressed in subsection (e) of this section are calculated as
described in paragraphs (1) and (2) of this subsection.
(1) Overhead assessment revenue need is calculated
as the amount of revenue needed to reach the targeted year-end fund
balance, taking into account the beginning balance, expected direct
billing revenues, and estimated expenditures.
(2) To calculate the assessment rates, the department
allocates a percentage of the revenue need to admitted assets and
a percentage to gross premium receipts, the assessment bases. Then
the department divides the revenue need allocated to each assessment
base by the assessment base.
(g) A domestic insurance company must pay the overhead
assessment required under subsection (c) of this section to the Texas
Department of Insurance as provided in the invoice not later than
30 days from the invoice date.
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| Source Note: The provisions of this §7.1001 adopted to be effective February 1, 2012, 37 TexReg 329; amended to be effective January 30, 2013, 38 TexReg 378; amended to be effective January 6, 2014, 39 TexReg 84; amended to be effective January 6, 2015, 40 TexReg 70; amended to be effective January 5, 2016, 41 TexReg 256; amended to be effective January 4, 2017, 41 TexReg 10622; amended to be effective January 3, 2018, 42 TexReg 7716; amended to be effective January 3, 2019, 43 TexReg 8601; amended to be effective January 5, 2020, 45TexReg159; amended to be effective December 29, 2020, 45 TexReg 9570 |
