|
The following are the
requirements and due dates for filing documentation for 2006
eligibility for surplus lines insurers. Each insurer wanting to
maintain eligibility or to become eligible must meet the listed filing
requirements.
These filing
requirements are in accordance with the Texas Insurance Code, Chapter
981 and related provisions of the Texas Administrative Code, 28 TAC
§15.8. Texas Administrative Code, 28 TAC §15.8 (j) requires the Texas
Department of Insurance to maintain the “Surplus Lines Insurers List”
compiled from the information submitted to meet the eligibility
requirements. Any new information or updates to previously filed
documentation must be submitted to the Texas Department of Insurance
with copy to the Surplus Lines Stamping Office of Texas. This includes
name changes, addresses, changes in officers and directors, etc. All
questions and/or comments pertaining to the Surplus Lines Insurers List
are to be directed to the Texas Department of Insurance.
The minimum capital
and surplus requirement is $15 million as of December 31, 1995. Failure
to maintain at least $15 million capital and surplus may result in the
removal of the insurer from the Texas Department of Insurance "Surplus
Lines Insurers List." Failure to comply with the evidence filing
requirements may also subject the insurer to removal from the list.
Enclosed is a
Business Plan Outline to be used to meet the business plan filing
requirements. Business Plans must be current within 3 years. If the
current business plan on file has financial projections for years prior
to 2003, a new plan will need to be filed by March 31, 2006.
Inquiries about the
contents of this memo should be directed to Company Licensing and
Registration, Texas Department of Insurance.
Attached is a
Checklist for both foreign (U.S. domiciled) and alien (non-U.S.
domiciled) companies. The Checklist must be completed and filed with the
required documents.
NOTE: All Documents must be
submitted in duplicate as follows
Original Documents
Duplicate Copies
Texas Department of Insurance
Surplus Lines Stamping Office of Texas
Company Licensing & Registration, MC 305-2C 805 Las Cimas
Parkway, Suite 150
333 Guadalupe
Austin, TX 78746-5493
P.O. Box 149104
P. O. Box 160170
Austin, TX 78714-9104
Austin, TX 78716-0170
512-322-3535, FAX 512-322-3550
512-346-3274 ext 220, FAX 512-346-3422
registrationteam@tdi.state.tx.us
evidence@slsot.org
Note: Documents filed solely with the Stamping Office are not deemed to
be filed with the Texas Department. All evidence submitted must have
the complete name of the surplus lines insurer clearly displayed.
Due Date
The DUE DATE
for filing documents varies based on the type of evidence required. A
due date is indicated for each type of evidence.
If an insurer is
unable to comply with the due dates, a written explanation must be filed
with the Texas Department of Insurance (with a copy to the Surplus Lines
Stamping Office of Texas) using the Comments Section of the proper
Checklist. The explanation must include date the evidence will be
filed.
An insurer may
also be asked to provide additional information as deemed necessary to
perform an evaluation of the insurer's eligibility. This may include,
but is not limited to detailed policy information regarding direct
premium written in Texas.
NOTE: Texas
Department of Insurance will allow certain evidence, as indicated on the
check list, to be filed electronically at e-mail addresses listed above,
for insurers renewing their eligibility. All evidence for new
submissions must be filed in hard copy.
FOREIGN (U. S.)
SURPLUS LINES INSURERS DUE DATE: March
31,2006
(except as noted)
1. A complete
2005 NAIC Property and Casualty Annual Statement originally
signed and notarized. The statement must nclude: a) Page 14
for Texas, b) Actuarial Opinion, and c)
Management's
Discussion and Analysis of Operations.
2. A
Certified Copy of the Current License or Certificate of Authority (C
of A) (current within 3 years) from the insurer's state of domicile.
This license or certificate of authority must indicate the kind and
class of business the company is authorized to write. If no change
has been made to the current C of A on file provide written statement.
4. Provide a
Three-Year Business Plan using the enclosed Guidelines to include
Texas surplus lines business. Also, describe the method the insurer
uses to procure Texas business. Business Plans with financial
projections for years prior to the year 2003 must be updated.
5.
Biographical Affidavits (current within 3 years) on the officers,
directors and management of the insurer, including underwriters
primarily responsible for underwriting Texas risks. If underwriting is
managed or performed by a separate company or agency, submit the name,
address and phone number of such entity. Replace biographical
affidavits for President, Secretary and Treasurer if originals were
filed prior to the year 2003.
6. A copy of
the NAIC IRIS Ratio Results and the insurer's response to any
ratio outside the usual range. If the NAIC reports are not available by
the due date, so indicate and provide an internally generated set of the
twelve IRIS ratios. Insurer’s written explanation to any IRIS
ratio failures must be included.
7.
A copy of the most current Examination Report, from the examining
state, if not previously filed. Provide an explanation, response
or description of corrective actions taken regarding exam
comments or recommendations.
8. A
copy of the audited GAAP/SAP Financial Statement, including the
auditor's most recent "Management Letter" and management's response. If
not required by state of domicile, provide evidence of exemption.
DUE DATE: June 1, 2006.
9. If
publicly traded, provide a copy of the S.E.C. 10K Report, as well
as any other S.E.C. filing relating to a material event. DUE DATE:
June 1, 2006.
10. All
foreign insurers are required to file NAIC Property and Casualty
Quarterly Statements within 45 days following the close of the quarter.
(Due dates falling on a weekend must be received the next business
day) Eligible Surplus Lines Insurers wishing to maintain eligibility
are not required to file a hard copy of the NAIC Quarterly Statement but
must file an affidavit that the statement has been timely filed with
NAIC. If the Quarterly Statement is not filed insurer must file written
explanation.
1st Quarter ending March 31,
2006 Due May 15, 2006
2nd Quarter ending June 30,
2006 Due August 15, 2006
3rd Quarter ending Sept. 30,
2006 Due November 15, 2006
NOTE:
COPIES OF ALL EVIDENCE MUST BE FILED WITH THE SURPLUS LINES STAMPING
OFFICE OF TEXAS
CHECKLIST
FOREIGN
(U. S.) SURPLUS LINES INSURERS
________________________________________________________________
a) Page 14 for Texas
b) Actuarial Opinion
c) Management's Discussion and
Analysis of Operations
2. Certified Copy of the
Current License or Certificate of Authority
3. *Current List of
Surplus Lines Agents (Include agent/agency name and Texas
Surplus Lines License Number)
4. *Three Year Business
Plan
5. Biographical
Affidavits (must update if filed prior to year 2003)
6. *NAIC IRIS Ratio
Results (written explanation of failures must be included)
7. Examination Report
8.
GAAP/SAP Financial Statement (DUE DATE: June 1, 2006)
9. *S.E.C. 10K Report
(DUE DATE: June 1, 2006)
10. *NAIC Quarterly
Financial Statements (See instructions for due dates)
ALIEN
SURPLUS LINES INSURERS DUE DATE:
June 1,
2006
(except as noted)
1. An
Annual Report and/or Audited Financial Statement expressed
in U. S. Dollars, including auditor's most recent
"Management Letter" and management's response.
2. A
Certified Copy of the Current License or Certificate of Authority
from the insurer's country of domicile. This license or certificate of
authority must indicate the kind and class of business the company is
authorized to write. New copies of the license should be submitted on a
three year cycle as with the biographical affidavits.
3. A Current
List of Texas Surplus Lines Agents procuring business for the
insurer. In addition, indicate agents with agency agreements, binding
authority and claims paying authority. Any changes in the contracts
(i.e., cancellation of contract, removal of binding authority or claims
paying authority) must be submitted during the year. (Must include
complete name of
agent/agency and Texas Surplus Lines
License Number)
4. Provide a Three-Year Business
Plan using the enclosed Guidelines to include Texas surplus lines
business.
(Provide updated Business Plan if current one filed with our office has
financial projections for years prior to year 2003.)
5.
Biographical Affidavits (current within 3 years) on the officers,
directors and management of the insurer, including underwriters
primarily responsible for underwriting Texas risks. If underwriting is
managed or performed by a separate company or agency, submit the name,
address and phone number of such entity. Replace biographical
affidavits for President, Secretary, and
Treasurer if filed prior to year 2003.
6. A copy of
the Trust Fund Agreement and a Current Statement of Account
from the trustee of trust fund. The trust fund, maintained in a U. S.
Federal Reserve System Bank is an amount of not less than $5.4
million. The trust fund must be styled for the protection of U. S.
policyholders. The International Insurers Department Standard Trust Fund
Agreement is preferred.
7. Provide
the Premiums Written in Texas by each surplus lines agent with
total premium for insurer for 2005.
8. Provide
Actuarial Opinion or statement. Due date: August 1, 2006.
9. If listed by
the IID, provide a Complete Copy, Including Interrogatories,
of the standard IID reporting format. Due Date: August 1, 2006.
NOTE:
COPIES OF ALL EVIDENCE MUST BE FILED WITH THE SURPLUS LINES STAMPING
OFFICE OF TEXAS
CHECKLIST
ALIEN SURPLUS LINES INSURERS
____________________________________________________________________
Name of Company
1. Annual Report and/or
Audited Financial Statement.
(Must be in U.S. Dollars)
2. Certified Copy of the
Current License or Certificate of Authority
3. *Current List of Surplus
Lines Agents.
4. *Three-Year Business Plan.
5. Biographical Affidavits
(updated if filed prior to year 2003).
6. *a. Trust Fund Agreement
b. Current
Statement of Account.
7. *Premium Written in Texas.
(Total for each agent with grand total)
8. Actuarial Opinion. DUE
DATE: August 1, 2006.
9. Complete copy of the
Standard IID reporting format, including
Interrogatories. DUE DATE: August
1, 2006.
Note: If items listed
above are not submitted by the due date provide explanation below.
SURPLUS LINES COMPANY BUSINESS PLAN OUTLINE
NOTE: This outline is
not intended to be all inclusive, but rather to be used as a guide to
key elements that might be included in a business plan (Plan). Each
Plan should be unique to a particular company and should contain
sufficient detail to provide staff of the Texas Department of Insurance
with adequate information about the viability of the company's
operations. The Plan should be written in a style that a lay person
could understand, yet contains the necessary technical information to be
deemed comprehensive. The Plan is the sole responsibility of the
company and adequacy of the Plan is a reflection upon the competency of
the company's management.
I.
OVERVIEW
Please provide the following:
a. The full name of the company submitting the Plan.
b. The name and phone number of the individual responsible for
preparing the Plan.
c. A current organizational chart, with a brief description of
all members in the company’s holding company system, including the
primary business functions of each member.
d. A brief description of how the company is controlled
including a list of all principals and key personnel.
e. The identity of the party performing the underwriting
functions for the company. If this function has been delegated, state
the manner of delegation and the relationship to the company.
f. A brief description of the underwriting controls used to
accept or reject a potential policyholder.
II. RECENT
AND CURRENT OPERATIONS
Give a brief description of the company’s operations:
a. The type of business the company intends to write in this
State.
b. The type of business currently being written, if different
from that answer in II (a).
c. The markets being targeted in this State, including the
geographical areas.
d. A schedule reflecting the commission structure for all lines
of business.
III.
REINSURANCE
Provide the following
regarding the company’s reinsurance program:
a. Describe any material change to the company’s reinsurance
program recently completed, or which is being contemplated.
b. Briefly describe the material aspects of the company’s
reinsurance program.
c. The company’s maximum limit of liability (gross and net) by
risk, line of business, etc.
IV. INTERNAL
CONTROLS
Provide the following regarding the Company’s internal controls:
a. Does the company have procedures or processes in place for
reviewing the business produced by Texas surplus lines agents so that
agents who consistently produce unprofitable business can be advised
and/or so underwriting guidelines can be changed?
b. Does the company have accounting procedures or processes in
place for premiums from Texas surplus lines agents that provide timely
updates on said premium?
c. Does the company have procedures or processes in place for
reviewing and accepting or denying claims?
V. FINANCIAL
PROJECTIONS
Please provide the following information regarding the company’s overall
plan:
a. A projection covering a three year period for business
written by the Company.
b. A projection covering a three year period for business
written in Texas.
NOTE: State all assumptions used in the preparation of the
projections, including actuarial, commission and expenses, investment
and interest rate and other significant assumptions. The projected
quarterly financial statement should include a balance sheet, and state
of income and capital of surplus account.
VI: ADDITIONAL
INFORMATION
Please provide the following information, if applicable:
a. A specimen copy of a managing general agent agreement.
b. A copy of any operating and/or cost sharing agreement.
c. A copy of the investment strategy, letter(s) of credit, trust
agreement(s) or similar arrangements that exist for the benefit of the
company.
NOTE: COPY MUST BE
FILED WITH THE SURPLUS LINES STAMPING OFFICE OF TEXAS
|
