Current through Reg. 50, No. 13; March 28, 2025
(a) Under Insurance Code §
843.156 and for
purposes of this section, the term "insurance company" includes a health
maintenance organization as defined in Insurance Code §
843.002.
(b) An insurer not organized under the laws
of Texas (foreign insurance company) must pay the costs of an examination as
specified in this subsection.
(1) Under
Insurance Code §
401.152, a foreign
insurance company must reimburse the department for the salary and examination
expenses of each examiner and other department employee participating in an
examination of the insurance company allocable to an examination of the
company. To determine the allocable salary for each examiner and other
department employee, the department divides the average annual examiner's and
other department employee's salary by the number of working hours in a year.
The department assesses the company the part of the annual salary attributable
to each working hour the examiner and other department employee examines the
company during a year, The expenses the department assesses are those actually
incurred by the examiner and other department employee to the extent permitted
by law.
(2) Under Insurance Code
§
401.152(a-1),
a foreign insurance company examined entirely in a single year, or an exam
beginning in one year and completed in the next year will be assessed using the
rate for the year the exam began, and must pay an annual assessment in an
amount sufficient to meet all other expenses and disbursements necessary to
comply with the laws of this state relating to the examination of insurers. The
amount imposed must be computed in the same manner as the amount imposed for
domestic insurers as applicable under subsection (c) of this section.
(3) A foreign insurance company must pay the
reimbursements and payments required by this subsection to the department as
specified in each itemized bill the department provides to the foreign
insurance company.
(c)
Under Insurance Code §
401.151, §
401.155, and Chapter 803, a domestic insurance company must pay examination
expenses and rates of overhead assessment in accordance with this subsection.
(1) A domestic insurance company must pay the
salaries and expenses of the examiners and other department employees allocable
to an examination of the company. The department divides the average annual
examiner's and other department employee's salary by the number of working
hours in a year, and assesses the company the part of the annual salary
attributable to each working hour the examiner and other department employee
examines the company during a year, The expenses assessed must be those
actually incurred by the examiner and other department employee to the extent
permitted by law.
(2) Except as
provided in paragraphs (3) and (4) of this subsection, the overhead assessment
to cover administrative departmental expenses attributable to examination of
companies is:
(A) a percentage, as specified
in the Commissioner order addressed in subsection (e) of this section, of the
admitted assets of the company as of December 31 each relevant year, taking
into consideration the annual admitted assets that are not attributable to 90
percent of pension plan contracts as defined in §
818(a) of the Internal
Revenue Code of 1986 (26 U.S.C. §
818(a)); and
(B) a percentage, as specified in the
Commissioner order addressed in subsection (e) of this section, of the gross
premium receipts of the company for each relevant year, taking into
consideration the annual premium receipts that are not attributable to 90
percent of pension plan contracts as defined in §
818(a) of the Internal
Revenue Code of 1986 (26 U.S.C. §
818(a)).
(3) Except as provided in paragraph (4) of
this subsection, if a company was a domestic insurance company for less than a
full year during a calendar year, the overhead assessment for the company is
the overhead assessment required under paragraph (2)(A) and (B) of this
subsection divided by 365 and multiplied by the number of days the company was
a domestic insurance company during that calendar year,
(4) If the overhead assessment required under
paragraph (2)(A) and (B) of this subsection or paragraph (3) of this subsection
produces an overhead assessment of less than $25, a domestic insurance company
must pay a minimum overhead assessment of $25.
(5) The department will base the overhead
assessments on the assets and premium receipts, including direct written and
assumed premiums, reported in the annual statements.
(6) For the purpose of applying paragraph
(2)(B) of this subsection, the term "gross premium receipts" does not include
insurance premiums for insurance contracted for by a state or federal
government entity to provide welfare benefits to designated welfare recipients
or contracted for in accordance with or in furtherance of the Human Resources
Code, Title 2, or the federal Social Security Act (42 U.S.C.
§§
301 et
seq.).
(d) Under Labor
Code § 407A.252, a workers' compensation self-insurance group must pay the
salaries and expenses of the examiners and other department employees allocable
to an examination of the group. To determine the allocable salary for each
examiner and other department employee, the department divides the average
annual examiner's and other department employee's salary by the number of
working hours in a year. The department assesses the group the part of the
annual salary attributable to each working hour the examiner and other
department employee examines the company during a year, The expenses the
department assesses are those actually incurred by the examiner and other
department employee to the extent permitted by law.
(e) The Commissioner will set the average
annual examiner's and other department employee's salary rate and overhead
assessment rates for each year by Commissioner order.
(f) The overhead assessment rates set in the
Commissioner order addressed in subsection (e) of this section are calculated
as described in paragraphs (1) and (2) of this subsection.
(1) Overhead assessment revenue need is
calculated as the amount of revenue needed to reach the targeted year-end fund
balance, taking into account the beginning balance, expected direct billing
revenues, and estimated expenditures.
(2) To calculate the assessment rates, the
department allocates a percentage of the revenue need to admitted assets and a
percentage to gross premium receipts, the assessment bases. Then the department
divides the revenue need allocated to each assessment base by the assessment
base.
(g) A domestic
insurance company must pay the overhead assessment required under subsection
(c) of this section to the Texas Department of Insurance as provided in the
invoice not later than 30 days from the invoice date.