SECTION 7.1805. Contents of Withdrawal Plan

(a) Except for withdrawing HMOs, which are addressed under subsection (b) of this section and insurers meeting the criteria under §7.1804(b) of this title (relating to When a Plan is Required), a withdrawing insurer must file a plan of orderly withdrawal with the Commissioner that is constructed to protect the interests of the people of this state. The plan must be signed by at least one officer of the insurer and must contain the following:

(1) identification, in accordance with the line of insurance designations in §7.1803 of this title (relating to What Constitutes a Line of Insurance), of the line or lines of insurance being withdrawn;

(2) identification of the policy forms by number and type affected by the withdrawal;

(3) the dates the insurer intends to begin and complete its withdrawal;

(4) an explanation of the reasons for the withdrawal;

(5) provisions for notifying all of the affected Texas policyholders and certificate holders of the dates of the beginning and completion of the withdrawal and how the withdrawal will affect them, including, but not limited to:

(A) a copy of the notice and an explanation of the manner in which the notice will be provided to policyholders and certificate holders;

(B) either affirmation that such notice will be provided within 30 days of the approval of the withdrawal plan or a request to provide the notice at some other specified date or time, and such request must be approved by the Commissioner; and

(C) identification of any provision of the Insurance Code or Texas Administrative Code under which notice is mandated;

(6) provisions for meeting all of the insurer's contractual obligations, including, but not limited to:

(A) notification of all affected agents of the insurer of the date the insurer intends to begin and complete the withdrawal;

(B) for fire and casualty insurers, a statement affirming the insurer's compliance with the provisions of Insurance Code Chapter 4051, Subchapter H, relating to cancellation of agency contracts;

(C) for insurers writing liability coverage as specified in Insurance Code Chapter 551, Subchapter B, a statement affirming the insurer's compliance with the provisions of Insurance Code Chapter 551, Subchapter B, relating to cancellation and nonrenewal of certain liability insurance coverage;

(D) for insurers writing property and casualty coverage as specified in Insurance Code Chapter 551, Subchapter C, a statement affirming the insurer's compliance with the provisions of Insurance Code Chapter 551, Subchapter C, relating to cancellation and nonrenewal of certain property and casualty policies; and

(E) for insurers writing guaranteed renewable or noncancelable coverage, a statement affirming the insurer's compliance with the provisions of Insurance Code §1202.051, concerning renewability and continuation of individual health insurance policies, and Insurance Code §1501.109, concerning refusal to renew and discontinuation of coverage, and any corresponding regulations;

(7) provisions for providing service to the insurer's Texas policyholders and claimants;

(8) information on Texas business, including:

(A) the total annual premium volume and the number of policies and certificates and covered persons in Texas by county for each line to be withdrawn and the estimated total annual premium volume and number of policies and certificates and covered persons in Texas by county after withdrawal;

(B) an estimate of what percentage of the market for each affected line of insurance in each county the withdrawal impacts;

(C) any other information necessary to assist the Commissioner in determining whether a market availability problem is created by the withdrawal; and

(D) if an insurer is unable to provide the exact number of policies and certificates and covered persons, the insurer must provide estimates and explain how the estimates were determined;

(9) provisions for identifying policyholders or certificate holders of special circumstances;

(10) identification of any third party contracts which may provide for the continuity of care to enrollees of special circumstances;

(11) number of and estimated amount of all losses outstanding in Texas, including claims incurred but not reported;

(12) a plan to handle the losses specified in paragraph (11) of this subsection, including, but not limited to:

(A) identification of what assets will be available for paying outstanding incurred but not reported claims, claims in the course of settlement, and associated loss adjustment expenses; and

(B) identification of who specifically will administer the run off of the business;

(13) if Texas policyholders or certificate holders are to be reinsured, the filing of a reinsurance agreement under all statutory and regulatory requirements and, when applicable, the filing of an assumption certificate;

(14) provisions for meeting any applicable statutory obligations, including, but not limited to:

(A) payment of any guaranty fund assessments;

(B) participation in any assigned risk plan, pool, fund, facility, or joint underwriting arrangement; and

(C) payment of any taxes;

(15) a list of any other products the insurer will continue to offer in Texas; and

(16) affirmation that the insurer will comply with §7.1808 of this title (relating to Requirements to Resume Writing Insurance), as applicable.

(b) Unless it meets the criteria under §7.1804(b) of this title, a withdrawing HMO must file a plan of orderly withdrawal with the Commissioner that is constructed to protect the interests of the people of Texas. The plan must be signed by at least one officer of the HMO and must contain the following:

(1) identification, in accordance with the line of insurance designations in §7.1803 of this title, of the line or lines of insurance being withdrawn;

(2) identification by form number of the evidences of coverage affected by withdrawal;

(3) the dates the HMO intends to begin and complete its withdrawal;

(4) an explanation of the reasons for the withdrawal;

(5) provisions for notifying all of the affected Texas enrollees and contract holders of the dates of the beginning and completion of the withdrawal and how the withdrawal will affect them, including, but not limited to:

(A) a copy of the notice and an explanation of the manner in which the notice will be provided to enrollees or contract holders;

(B) either an affirmation that such notice will be provided within 30 days of the approval of the withdrawal plan or a request to provide the notice at some other specified date or time, and such request must be approved by the Commissioner; and

(C) identification of any provisions of the Insurance Code or the Texas Administrative Code under which notice is mandated;

(6) provisions for meeting all of the HMO's contractual obligations, including, but not limited to:

(A) notification to all affected agents of the HMO of the dates the HMO intends to begin and complete the withdrawal; and

(B) for HMOs writing guaranteed renewable or noncancelable coverage, a statement affirming the HMO's compliance with the provisions of Insurance Code §843.208, concerning cancellation or nonrenewal of coverage; §1271.307, concerning renewability of coverage for individual health care plans and conversion contracts; and §1501.109, concerning refusal to renew and discontinuation of coverage, and any corresponding regulations;

(7) provisions for providing service to the HMO's Texas enrollees and providers;

(8) information on Texas business, including:

(A) the total annual premium volume and the number of affected contract holders and enrollees in Texas by county in all service areas for each line to be withdrawn and the estimated total annual premium volume and number of enrollees and contract holders in Texas by county in all service areas after withdrawal;

(B) an estimate of what percentage of the market for each affected line of insurance by county in all service areas the withdrawal impacts, as measured by enrollee; and

(C) any other information necessary to assist the Commissioner in determining whether a market availability problem is created by the withdrawal;

(9) provisions for identifying enrollees of special circumstance;

(10) identification of any third-party contracts that may provide for the continuity of care to enrollees of special circumstance;

(11) number of and estimated amount of all losses outstanding in Texas, including claims incurred but not reported;

(12) a plan to handle the losses specified in paragraph (11) of this subsection, including, but not limited to:

(A) identification of what assets will be available for paying outstanding incurred but not reported claims, claims in the course of settlement, and associated loss adjustment expenses; and

(B) identification of who specifically will administer the run off of the business, if any;

(13) provisions for meeting any applicable statutory obligations;

(14) affirmation that the HMO will comply with §7.1808 of this title, as applicable; and

(15) a list of any other products the HMO will continue to sell in Texas in each service area.

(c) The filing of a single consolidated withdrawal plan for all withdrawing insurance companies or HMOs in the same holding company system, as defined in Insurance Code §823.006, does not meet the requirements of this subchapter. A separate withdrawal plan must be filed for each insurance company or HMO intending to withdraw from a line or lines of insurance.

Source Note: The provisions of this §7.1805 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