| (ii) Audit committee. Every controlled insurer must
have an audit committee of the board of directors composed of independent
directors. The audit committee must annually meet with management,
the controlled insurer's independent certified public accountants,
and an independent casualty actuary or other independent loss reserve
specialist acceptable to the commissioner to review the adequacy of
the controlled insurer's loss reserves.
(iii) Reporting requirements.
(I) In addition to any other required loss reserve
certification, the controlled insurer must annually, on April 1 of
each year, file with the commissioner an opinion of an independent
casualty actuary, or other independent loss reserve specialist acceptable
to the commissioner, reporting loss ratios for each line or subline
of business written and attesting to the adequacy of loss reserves
established for losses incurred and outstanding as of year-end, including
incurred but not reported losses, on business placed by the controlling
producer.
(II) The controlled insurer must annually report to
the commissioner in its registration statement filed under §7.203(g)
of this title the amount of commissions paid to the controlling producer,
the percentage the amount represents of the net premium written, and
comparable amounts and percentages paid to noncontrolling producers
for placements of the same kinds of insurance.
(iv) Disclosure requirements. The controlling producer,
prior to the effective date of the policy, must deliver written notice
to the prospective insured disclosing the relationship between the
controlling producer and the controlled insurer, except that, if the
business is placed through a subproducer who is not a controlling
producer, the controlling producer must retain in the records a signed
commitment from the subproducer that the subproducer is aware of the
relationship between the controlled insurer and the controlling producer
and that the subproducer has notified or will notify the insured.
(2) The contract referred to in paragraph (1)(B)(i)
of this subsection does not provide to or expand any rights or privileges
of a controlling producer, including, but not limited to, authority
to place or write business, that do not otherwise exist or could not
otherwise be exercised under the laws of the State of Texas or another
state.
(p) A producer controlled insurer is subject to all
the provisions of the Act absent a determination that the laws of
its domiciliary state are substantially similar as provided by the
Act, §823.014.
|
| Source Note: The provisions of this §7.205 adopted to be effective January 1, 1976; amended to be effective November 30, 1984, 9 TexReg 5926; amended to be effective April 29, 1988, 13 TexReg 1761; amended to be effective April 13, 1992, 17 TexReg 2273; amended to be effective December 24, 1993, 18 TexReg 9310; amended to be effective July 14, 1994, 19 TexReg 5098; amended to be effective May 15, 1996, 21 TexReg 3798; amended to be effective May 5, 2002, 27 TexReg 3559; amended to be effective May 26, 2013, 38 TexReg 3033 |
