Current through Reg. 50, No. 13; March 28, 2025
(a)
Single state company. A single state company is a domestic company that is
licensed and doing business only in this state. A domestic company is doing
business only in this state if the company does not have direct or assumed
risks for policies issued outside of this state.
(b) Single state exemption. The commissioner
may grant a single state company a single state exemption from the NAIC
Valuation Manual principle-based valuation requirements for specific product
forms or product lines. This exemption is a single state exemption.
(1) To request approval for a single state
exemption, a company must submit a written request to TDI and include detailed
information regarding the request for the exemption. The request should
identify the product forms or product lines proposed for the single state
exemption. An exemption is not considered approved until written approval is
issued by the commissioner or his designee.
(2) A single state company granted a single
state exemption must compute reserves using the assumptions and methods that it
used before January 1, 2017. Single state company business exempted by the
commissioner with a single state exemption must be reserved with assumptions
and methods required by the NAIC Valuation Manual other than the
principle-based valuation requirements.
(3) A single state company granted a single
state exemption must comply with all other requirements of the NAIC Valuation
Manual, including the actuarial opinion and memorandum requirements of the NAIC
Valuation Manual.
(4) The
commissioner may revoke a single state exemption by revoking the exemption in
writing if the reserving methods and assumptions do not adequately reflect the
company's risks or if the company no longer qualifies for the exemption under
Insurance Code §
425.077. A single
state exemption may also be revoked if the commissioner determines that the
NAIC Valuation Manual principle-based reserving would be more appropriate for
protection of Texas policyholders and industry.
(c) Adequacy analysis requirement exemption.
A single state company may be granted an exemption by the commissioner from the
asset adequacy analysis requirement for the actuarial opinion in the NAIC
Valuation Manual. This exemption is an asset adequacy analysis exemption.
(1) A single state company must request an
asset adequacy analysis exemption in writing to the commissioner and provide
support as to why an asset adequacy analysis is not needed for its business. An
exemption is not considered approved until written approval is issued by the
commissioner or his designee.
(2) A
single state company granted an asset adequacy analysis exemption must comply
with other requirements for the actuarial opinion in the NAIC Valuation
Manual.
(3) The commissioner may
revoke an asset adequacy analysis exemption by revoking the exemption in
writing if the asset adequacy analysis is needed to assess risks or if it is
needed for the protection of Texas policyholders and industry. The commissioner
may also revoke an asset adequacy analysis exemption if the company no longer
qualifies as a single state company.