The Texas Department of Insurance (“TDI”) adopted a new group capital calculation filing requirement that is effective on November 7, 2022. The new rule, found in 28 Texas Administrative Code §7.215 (“Section 7.215”), is based on the National Association Insurance Commissioners (“NAIC”) model regulation that requires an insurer’s ultimate control person in an insurance holding company system to file a group capital calculation concurrently with the insurer’s annual registration (Form B). New Section 7.215 is intended to help TDI:
- Identify and quantify risks in certain holding company systems by making those systems more transparent;
- Align TDI’s rules with NAIC updates and accreditation requirements and
- Meet the conditions established in covered agreements between the United States and its European Union and United Kingdom counterparts.
Section 7.215 requires the ultimate controlling person of an insurer in an insurance holding company system, for which Texas is the lead state, to annually file a group capital calculation if the insurance holding company system is either (1) subject to a covered agreement defined by Texas Insurance Code Chapter 493, Subchapter C, or (2) is required by the United States Federal Reserve Board to perform a group capital assessment and the Federal Reserve Board does not share the assessment with TDI. In addition, there are multiple detailed exceptions to the filing requirement for certain insurance holding company systems. The new rule also allows the TDI Commissioner the ability to require other insurers to file a group capital calculation after considering certain discretionary criteria.
The filing must be made concurrently with the holding company act registration statement unless an extension of time is granted by TDI Commissioner. The TDI Commissioner may also determine the group capital calculation filing form and extend the filing deadline.
The full text of Section 7.215 can be found here.