SECTION 7.1804. When a Withdrawal Plan is Required

(a) Any authorized insurer or HMO must file with the Commissioner of Insurance a plan of orderly withdrawal before the insurer or HMO undertakes a withdrawal.

(1) The insurer or HMO undertakes a withdrawal when it takes any action on its own initiative that will result in the insurer or HMO meeting the criteria under Insurance Code §827.003.

(2) An insurer or HMO will not be held to have acted on its own initiative in effecting a withdrawal when it acts under a Commissioner disciplinary or administrative directive or order, or when the insurer or HMO acts under a directive of a supervisor, conservator, or receiver. If an out-of-state directive or order is not provided to the Commissioner within 30 days of the issuance of such directive or order, the insurer or HMO will be held to have acted on its own initiative.

(b) An insurer or HMO is not required to file a plan of orderly withdrawal, but must instead notify the department, when:

(1) the line of business is written by a stipulated premium company unless such line is written under Insurance Code §884.303 and §884.307 or Chapter 884, Subchapter I; or

(2) the line of insurance from which the HMO is withdrawing is Medicare, a Medicare+Choice plan or a Medicaid contract as provided in §7.1803(a) of this title (relating to What Constitutes a Line of Insurance).

(c) If an insurer or HMO comes within an exception provided in subsection (b) of this section, such notification must be sent to the department simultaneously with any notification required to be provided to any other state or federal agency. The notification will be accepted for information only and must affirm that any appropriate state or federal agency has been notified of the company's intent to withdraw, and must include the effective date of nonrenewal, the names of the Texas counties affected, and the number of insureds or enrollees affected.

(d) This subchapter does not modify or supercede any requirement under the Insurance Code or any other state or federal law to notify policyholders or enrollees that an insurer or HMO will not renew any coverage; however, before any such notice is given a withdrawal plan must be filed with the department and approved by the department under §7.1806 of this title (relating to Withdrawal Plan Submission and Approval Procedures) when a plan is required by this section.

Source Note: The provisions of this §7.1804 adopted to be effective July 22, 1993, 18 TexReg 4504; amended to be effective January 30, 2002, 27 TexReg 610; amended to be effective June 19, 2018, 43 TexReg 3902