| (iv) informs the purchaser that the prepaid benefits
may not be honored by the funeral provider due to the non-forfeiture
or delinquent status of the funding policy; and
(C) for a reduced paid-up or extended term policy,
copies of an election form indicating the purchaser has chosen reduced
paid-up or extended term status, unless the policy has automatic non-forfeiture
provisions.
(e) Reports. A permit holder subject to this section
must maintain the following records regarding its prepaid funeral
benefits operations for both new and conversion sales:
(1) a report detailing new business issued within the
reporting period sorted by policy type and maintained either chronologically
by date of policy issuance, alphabetically by the insured's name,
or serially by policy number. The new issue report must balance to
the reconciliation report required under paragraph (4) of this subsection.
Information required to be in separate columns includes:
(A) the insured's name;
(B) the policy number or numbers;
(C) the prepaid contract total;
(D) the date of policy issuance; and
(E) the death benefit, or insurance in force, whichever
is applicable.
(2) reports detailing out-of-force and non-forfeiture
policies, sorted by policy type, and subtotaled in count and reduced
coverage amount by status codes for death maturity, canceled, surrendered,
lapsed, reduced paid-up, extended term, voided, not taken, or such
other codes which may be used to designate policies no longer in force,
maintained either chronologically by date of policy issuance, alphabetically
by the insured's name, or serially by policy number. If the reports
cannot be sub-totaled, a separate report must be generated for each
type of termination status or non-forfeiture change. The reports must
balance to the reconciliation report required under paragraph (4)
of this subsection. Information required to be in separate columns
includes:
(A) the insured's name;
(B) the date of policy issuance;
(C) the policy number or numbers;
(D) the date the policy matured, lapsed, or was surrendered
or canceled; and
(E) the death benefit amount that has been paid, reduced,
deleted, or transferred.
(3) an in-force policy report, sorted by policy type
and maintained either chronologically by date of policy issuance,
alphabetically by the insured's name, or serially by policy number.
The in-force report must balance to the reconciliation report required
under paragraph (4) of this subsection. The report must provide the
grand total number of policies or prepaid funeral contracts in force
and the grand total of death benefit or insurance in force. Information
required to be included in separate columns includes:
(A) the insured's name;
(B) the policy number or numbers;
(C) the prepaid contract total;
(D) the date of policy issuance;
(E) the death benefit, or insurance in force, whichever
is applicable; and
(F) growth, e.g., dividends and interest, attributable
to outstanding policies for the reporting period unless maintained
on a separate report.
(4) a reconciliation report that shows the activity
related to each policy that was identified in the new issue report
required under paragraph (1) of this subsection and the out-of-force
and non-forfeiture policy reports required under paragraph (2) of
this subsection. In addition to the required reports detailed above,
the permit holder must provide documentation to support any other
changes to contract/policy count and/or death benefit reported. The
ending totals of the respective reconciliation period for contract/policy
count and death benefit reported, must balance to the totals on the
corresponding in-force policy report required under paragraph (3)
of this subsection. The permit holder may use the department's Annual
Report Recapitulation of Policy Activity format to complete this report.
The report must at a minimum be balanced as of June 30 and December
31 of each year; and
(5) a suspense report of all premiums being held on
paid-up policies and premium paying policies where the premiums in
suspense are equal to or greater than the modal premium amount.
(f) Exceptions.
(1) A permit holder that sells only insurance-funded
contracts is not required to maintain records that are applicable
only to trust-funded contracts.
(2) With respect to contracts sold prior to the effective
date of this section, a permit holder will not violate this section
if it cannot produce records required under this section which were
not previously required by statute or rule. However, basic reporting
of in-force benefit amounts and policy activity from the last examination
date to the current examination date will be required of all permit
holders for insurance companies that have outstanding insurance policies
funding prepaid contracts in Texas.
(3) A permit holder may apply to the commissioner for
an exception to the requirements of this section. An exception may
be granted or revoked for good cause only by prior written direction
of the commissioner.
(g) Relocation of records. Prior to changing the location
where required records are maintained or where the examination is
to be performed pursuant to §154.053(a) of the Texas Finance
Code, a permit holder must notify the department, specifying the new
address in writing, and, if the change in location requires the granting
of an exception, comply with subsection (f)(3) of this section before
required records are moved to the new location. The commissioner may
revoke a records location if the commissioner determines that such
action is necessary to effectively regulate the permit holder and
examine the records.
(h) Maintenance of files. Documents and records required
to be maintained under this section must be filed within 30 days of
receipt. Cash withdrawn on death maturity must be posted within 30
days of actual withdrawal.
(i) Disaster recovery plan. If required records are
maintained electronically, the permit holder must provide evidence
of a disaster recovery plan, including documentation to substantiate
periodic testing and test results or compliance with TDI business
continuity planning requirements if applicable, that includes offsite
data storage capabilities regarding all records and documentation
related to prepaid funeral contracts.
|
| Source Note: The provisions of this §25.10 adopted to be effective November 8, 2007, 32 TexReg 7897; amended to be effective July 8, 2010, 35 TexReg 5804; amended to be effective May 7, 2020, 45 TexReg 2829 |
