(a) Purpose and Scope. The purpose of this section
is to describe the procedure an eligible insurer must follow when
it desires to relocate and maintain all or any portion of its books,
records, and accounts and its principal offices outside this state
at a location within the United States. To facilitate brevity, "all
or any portion of its books, records, and accounts and its principal
offices" will be referred to as "records" in this section. Insurance
Code Article 1.28 and this section describe the standards that an
insurer must meet to be eligible to relocate its records outside this
state and sets forth the information an eligible insurer must provide
to the department in its notice of intent to relocate records so that
the Commissioner of Insurance (Commissioner) can make an informed
decision to approve or disapprove the proposed relocation. The normal
records relating to the business produced by an agency of an eligible
insurer are not subject to Insurance Code Article 1.28. The department
interprets the term "agency" in Insurance Code Article 1.28 to mean
a person described in Insurance Code Article 21.02. An eligible insurer
that desires to relocate its records to an out of state location must
provide the information required by subsection (d) of this section.
An eligible insurance company that desires to deliver possession of
its records to another person located out of state who is an affiliate
of the eligible insurer must also provide the information required
by subsections (e) and (f) of this section. When that person is not
affiliated with the eligible insurer, the person must comply with
the provisions of subsections (e) - (g) of this section. Records of
a health maintenance organization relating to its quality assurance
program are not subject to this section.
(b) Definitions. The following words and terms, when
used in this section, have the following meanings, unless the context
clearly indicates otherwise.
(1) Affiliate--As defined in Insurance Code §823.003.
(2) Domestic insurance company--As defined in Insurance
Code §803.001.
(3) Eligible insurer--A domestic insurance company
that is:
(A) an affiliate of an insurance holding company system;
or
(B) a health maintenance organization that is an affiliate
of another health maintenance organization or health care provider.
(4) Health care provider--Is the same as the term "provider"
in Insurance Code §843.002.
(5) Insurance holding company system--As defined in
Insurance Code §823.006.
(c) Notice of Intent to Relocate Records. An eligible
insurer desiring to change the location of its records to a location
outside this state must file with Financial Analysis and Examinations,
333 Guadalupe, Austin, Texas 78701 or P.O. Box 149099, Austin, Texas
78714-9099, Mail Code 303-1A an original and one copy of a notice
of intent to relocate records setting forth the information required
by subsection (d) of this section, accompanied by the required filing
fee established in §7.1301(d)(18) of this title (relating to
Fees). Alternatively, an eligible insurer complies with this section
when it provides the department the information required by this section
in an agreement with an affiliate, and such agreement has been approved
or not disapproved as required by Insurance Code Article 21.49-1, §4.
(d) Contents of Notice of Intent to Relocate Records.
The notice of intent to relocate records required by Insurance Code
Article 1.28 and subsection (c) of this section must provide:
(1) the name of the eligible insurer desiring to relocate
its records outside the state;
(2) the street address of the eligible insurer's principal
office or offices (if there is more than one principal office, identify
the activities that are performed at each principal office; e.g.,
accounting, actuarial, investments, underwriting, claims, marketing,
data processing, human resources and corporate matters);
(3) the street address of the location or locations
of the eligible insurer's records before the proposed relocation of
records (if there is more than one location, identify the records
that are maintained at each location; e.g., accounting, actuarial,
investments, underwriting, claims, marketing, data processing, human
resources and corporate matters);
(4) the street address of the eligible insurer's principal
office or offices after the proposed relocation of records (if there
is more than one principal office, identify the activities that will
be performed at each principal office; e.g., accounting, actuarial,
investments, underwriting, claims, marketing, data processing, human
resources and corporate matters);
(5) the street address of the proposed location or
locations of the eligible insurer's records;
(6) a detailed description of the records that will
be maintained at the proposed location or locations named in paragraph
(5) of this subsection;
(7) the anticipated effective date of the proposed
relocation of the eligible insurer's records;
(8) a description of the eligible insurer's affiliation
with an insurance holding company system or health maintenance organizations
or health care providers;
(9) if the eligible insurer is affiliated with an insurance
holding company system, a statement that the eligible insurer has
made the necessary filings required by the Insurance Code Article
21.49-1;
(10) if the eligible insurer is affiliated with an
insurance holding company system, a statement that the eligible insurer
is in compliance with the Insurance Code Article 21.49-1;
(11) if the eligible insurer is a health maintenance
organization that is not affiliated with an insurance holding company
system, but is affiliated with other health maintenance organizations
or health care providers, the health maintenance organization must
furnish the information as set forth in §7.210 of this title
(relating to Form B);
(12) a description of any actual, proposed, or contemplated
financial involvement with respect to the relocation of the records
by an officer, director or employee or a person who is the beneficial
owner, directly or indirectly, of 10% or more of the voting securities
of the eligible insurer or affiliated insurance holding company system
or health maintenance organization;
(13) an analysis of the benefits to the eligible insurer
anticipated as a result of the relocation of the records, including
the effect on the location being abandoned;
(14) a description of the effect of the relocation
of the records on policyholders and claimants;
(15) a service of process form executed by the eligible
insurer (see subsection (l) of this section to obtain an example of
an acceptable form);
(16) a service of process form executed by a controlling
person of the eligible insurer (see subsection (l) of this section
to obtain an example of an acceptable form);
(17) if the records of the eligible insurer will be
maintained by a person other than the eligible insurer, state the
name of the person who will be maintaining the records of the eligible
insurer;
(18) if a person is named in paragraph (17) of this
subsection, provide the information in subsection (e) of this section;
and
(19) such other related information as the department
may require so that an informed determination can be made to approve
or disapprove the proposed relocation of records out of state.
(e) Additional Information Required for the Relocation
and Possession of Records with a Person Other than the Eligible Insurer.
If the eligible insurer intends for a person other than the eligible
insurer to possess and maintain its records, the following information
must be included in the notice of intent to relocate records:
(1) the name of the person who will possess and maintain
the records;
(2) the names of the directors, executive officers,
principals or principal shareholders of the person named in paragraph
(1) of this subsection;
(3) a statement describing the person's affiliation
with the insurance holding company system or health maintenance organization
or health care providers named in subsection (d)(8) of this section,
if any;
(4) an explanation and description of control mechanisms
in place to assure the effective and efficient reconciliation of the
records to be maintained by the person with those corporate records
maintained by the eligible insurer;
(5) an explanation of how the eligible insurer will
maintain direct supervision, management and control of the records
that are relocated;
(6) a copy of the agreement between the eligible insurer
and the person possessing and maintaining the records. The agreement
must comply with the requirements of subsection (f) of this section;
Cont'd... |