SECTION 6.306. Books and Records

(a) The books and records of a captive insurance company must be located and maintained within the United States and its territories at all times. The books and records of a captive insurance company must be located and maintained within the State of Texas, unless the commissioner authorizes in writing that the books and records may be located or maintained outside the state. A captive insurance company may not locate or maintain records outside of the state until after the captive insurance company receives the commissioner's written authorization, and then may only locate or maintain those records outside of the state in the manner and to the extent that the commissioner has authorized.

(b) The captive insurance company must provide the department with a complete list of all of the locations where its records are located or maintained. Record location and maintenance locations outside of the state must comply with the commissioner's authorization described in subsection (a) of this section.

(c) A captive insurance company must make a written request for authorization from the commissioner to locate or maintain records outside of the state. The written request must:

(1) identify the specific physical address outside the State of Texas where the captive insurance company's books and records will be located or maintained;

(2) identify the types of books and records that will be located or maintained outside the state, including books and records in an electronic format;

(3) if applicable, identify the vendor of a leased or purchased software or electronic platform that will provide services to the captive insurance company related to the maintenance of the captive insurance company's books and records; and

(4) if applicable, include the captive insurance company's continuity plan in the event of cancellation or termination of the arrangement with a vendor identified by the captive insurance company under paragraph (3) of this subsection.

(d) All books and records of a captive insurance company must be:

(1) electronically or physically accessible to the department on the department's request; and

(2) maintained in a manner that provides an audit trail between the captive insurance company's general ledger and the captive insurance company's source documents.

(e) A captive insurance company's books and records must be maintained with reasonable controls to ensure the integrity, accuracy, and reliability of the storage system and to prevent the deterioration of the books and records.

(f) A captive insurance company must ensure that it can recover its electronic books and records up to one week before the loss of it primary source of records.

(g) A captive insurance company must be able to access a complete and current set of its electronic books and records or a complete and current recovery of its electronic books and records from a location within the state at all times.

Source Note: The provisions of this §6.306 adopted to be effective April 27, 2014, 39 TexReg 3232