SECTION 7.203. Registration of Insurers

(a) Registration. Except as provided by the Act, every insurer authorized or incorporated to do business in this state and is a member of an insurance holding company system must register in accord with the Act. The exemption from registration for a foreign insurer does not apply to a commercially domiciled insurer doing business in this state; nor to a commercially domiciled insurer granted an exemption under §7.202 of this title (relating to Definitions). The commissioner must terminate the registration of a commercially domiciled insurer when it is demonstrated that it no longer meets the definition of commercially domiciled insurer in §7.202 of this title.

(b) Information filing from insurers. Every insurer which is authorized to do business in this state and which is a member of an insurance holding company system and is not required to register under subsection (a) of this section must furnish to the commissioner a copy of the registration statement or other information filed by such insurer with the insurance regulatory authority of its domiciliary jurisdiction and all amendments, if required by the commissioner.

(c) Information and forms required. Every insurer subject to registration must file a registration statement in accord with §7.210 of this title (relating to Form B), §7.211 of this title (relating to Form C), and as applicable, to §7.214 of this title (relating to Form F), providing current information about the requested matters.

(d) Materiality. Information which is not material for the purposes of the Act, need not be filed under the Act, §823.054, for certain requirements respecting materiality. See subsection (f) of this section for the rule on material changes.

(e) Amendments to registration statements. Each registered insurer must keep current the information required to be disclosed in its registration statement by reporting all material changes or additions (whether single transactions or cumulative in total). The amendment must be in accord with §7.210 of this title, the registration statement, the cover page requirements of §7.201(d) of this title (relating to Forms Filings), and with a positive statement as to the items of the form not being amended instead of setting out the unamended portions. The amendment must be filed within 15 days after the end of the month in which the registered insurer learns of the change or addition. Any transaction that is approved by the commissioner is deemed to be an amendment to the registration statement without further action or filing.

(f) Material changes. The following occurrences are, without limiting the meaning of the phrase "material changes," deemed material changes for purposes of filing an amendment to the registration statement:

(1) any acquisition of a voting security of a domestic insurer, directly or indirectly, by a person in control of the domestic insurer if, after the acquisition, the person, directly or indirectly, owns or controls less than 50 percent of the then issued and outstanding voting securities of the domestic insurer, in which case §7.210(b) and (c) of this title must be made current;

(2) any acquisition of a voting security of a domestic insurer, directly or indirectly, by a person that prior, directly or indirectly, owns or controls more than 50 percent of the then issued and outstanding voting securities of the domestic insurer, in which case §7.210(b) and (c) of this title must be made current;

(3) a change in the control of the registrant, in which case the entire registration statement must be made current (notwithstanding any other provision of this subchapter);

(4) a change in the information required by §7.210(f) and (g) of this title, in which case the respective subsection must be made current;

(5) a change of the chief executive officer, president, or more than one-third of the directors reported in §7.210(e) of this title, in which case the respective subsection must be made current;

(6) any transaction with an affiliate or affiliates which, when taken together with all other transactions with affiliates excluding those transactions approved under §7.204(a)(1) of this title (relating to Transactions Subject to Prior Notice) and those transactions for which notification is given under §7.204(a)(2) occurring within 12 months next preceding, under Subchapter C of the Act. In this case, §7.210(c) and (f) of this title must be made current together with a report of all transactions with affiliates regardless of size within 12 months next preceding. After the transactions are reported and the filings under §7.210(c) and (f) are made current, each subsequent transaction with an affiliate which, when taken together with those transactions which occurred within the 12 months next preceding, were reported under this subsection and Subchapter C of the Act, must be reported under subsection (e) of this section.

(g) Annual amendment. Within 120 days after the end of each fiscal year of the ultimate controlling person (that person which is not controlled by another person) of the insurance holding company system, the registrant must file an annual registration statement. An insurer required to file an annual registration statement must also furnish a summary of material changes from the prior year's annual registration statement under §7.211 of this title.

(h) Termination of registration. The commissioner must terminate the registration of any insurer as provided in Insurance Code §823.056.

(i) Consolidated filing. Any licensed insurer may file a consolidated registration statement or any amendment on behalf of itself and any affiliated insurer or insurers which are required to register under subsection (a) of this section, if so authorized by the affiliates. Each registration statement may include information regarding any insurer in the insurance holding company system even if the insurer is not authorized to do business in this state. Each licensed insurer in the filing must determine the correctness of the entire statement and amendments and is bound by the terms of the entire statement and amendment. The statement may be made under the provisions of subsection (j) of this section.

(j) Alternative registration.

(1) In lieu of filing a registration statement as specified in §7.210 of this title, a licensed insurer may file a copy of the registration statement or similar report it is required to file in its state of domicile (or a report it is required to file in another state where it is licensed if its state of domicile requires no such report) provided:

(A) the statement or report contains information substantially similar to information required in §7.210 of this title and any of the information not in the statement or report is provided by supplement; and

(B) the filing insurer is the principal insurer in the insurance holding company system or, in the case of a consolidated statement, the statement is in the form required by the principal insurer's domicile.

(2) Whether the filing insurer is the principal insurer in the insurance holding company system is a question of fact. An insurer filing a registration statement (or report in lieu of the information specified in §7.210 of this title) on behalf of an affiliated insurer must set forth a simple statement of facts which will substantiate the filing insurer's claim that it is the principal insurer in the insurance holding company system.

(3) With the prior approval of the commissioner, an unauthorized insurer may follow any of the procedures which could be done by an authorized insurer under paragraph (1) of this subsection.

(4) The commissioner may require under this subsection or subsection (i) of this section separate filings if the commissioner deems the filings necessary in the interest of clarity, ease of administration, or the public good.

(k) Enterprise Risk Report. The ultimate controlling person of an insurer required to file an enterprise risk report under Insurance Code §823.0595 must furnish the required information on Form F, which is made a part of these regulations.

(l) Exemptions. The provisions of this section do not apply to any insurer, information, or transaction if and to the extent exempted by the commissioner by rule, regulation, or order.

(m) Disclaimer.

(1) Any person may file with the commissioner a disclaimer of control or affiliation with any insurer, or the disclaimer may be filed by the insurer or any member of an insurance holding company system as a separate filing.

(2) A disclaimer of affiliation or a request for termination of registration claiming that a person does not, or will not upon the taking of some proposed action, control another person (referred to as the "subject") must contain the following information:

(A) the number of authorized, issued, and outstanding voting securities or rights of the subject;

(B) with respect to the person whose control is denied and all affiliates of the person, the number and percentage of shares of the subject's voting securities which are held of record or known to be beneficially owned, and the number of shares concerning which there is a right to acquire, directly or indirectly;

(C) all material relationships and bases for affiliation between the subject and the person whose control is denied and all affiliates of the person; and

(D) a statement explaining why the person should not be considered to control the subject.

(3) The applicant must simultaneously furnish a copy of any disclaimer filed with the commissioner to the insurer, if the affected insurer is not a party to it. The insurer must, within 15 business days after receipt, unless the time is extended by the commissioner for good cause, respond to the matters raised in the disclaimer.

(4) The applicant of a disclaimer which has been allowed must notify the commissioner within 15 days after the end of the month if any information constituting the basis for the disclaimer is incomplete, inaccurate, or no longer accurate. The commissioner may disallow the disclaimer for failure to provide the information.

(5) After a disclaimer has been filed, the insurer is relieved of the duty to register or report under subsection (a) of this section which may arise out of the insurer's relationship with the person unless and until the commissioner disallows the disclaimer. If the commissioner disallows a disclaimer, the party who filed the disclaimer may request an administrative hearing which must be granted by the commissioner.

(6) After a disclaimer of control or affiliation has been filed by any person, any acquisition, in any manner, directly or indirectly, of a voting security of the domestic insurer by the person is subject to the Act, in the absence of the filing within 15 days after the end of the month in which the acquisition of an additional voting security occurs, of an amendment makes current the disclaimer of control or affiliation previously filed under this subsection.

(n) Violations. The failure to file a registration statement or any amendment to a Form B (relating to Registration Statement) or Form F (relating to Enterprise Risk Report) within the time specified for the filing is a violation of this section.

(o) Dividends and distributions. Each registered insurer must, by personal delivery, by facsimile, or by mail addressed to: Financial Analysis, Mail Code 303-1A, Texas Department of Insurance, P.O. Box 149104, 333 Guadalupe, Austin, Texas 78714-9104, provide notice to the commissioner of all dividends and other distributions to shareholders under Insurance Code §823.053 in Form E (relating to Notice of Dividend or Distribution) and the notice is deemed an amendment to the registration statement without further action or filing. Prepayment notices will be considered promptly. Each prepayment notice must be accompanied by documentation supporting each of the standards specified in Insurance Code, §823.008, unless the documentation has previously been provided during the current calendar year and the person to whom the documentation was sent is identified. Dividends and distributions must be reviewed by the commissioner and, if the standards in the Act, §823.008 are not met, the commissioner will take appropriate action, including, but not limited to, that provided under Insurance Code §§82.001 - 82.056, 83.001 - 83.153 and Chapters 403, 404, 441, and 443. All reported dividends and distributions must be reviewed annually in the registration statement filed under §7.210 of this title. See §7.204(d) of this title for requirements regarding extraordinary dividends and distributions.

Source Note: The provisions of this §7.203 adopted to be effective January 1, 1976; amended to be effective November 30, 1984, 9 TexReg 5926; amended to be effective April 29, 1988, 13 TexReg 1761; amended to be effective April 13, 1992, 17 TexReg 2273; amended to be effective July 14, 1994, 19 TexReg 5098; amended to be effective May 15, 1996, 21 TexReg 3798.; amended to be effective May 5, 2002, 27 TexReg 3559; amended to be effective May 26, 2013, 38 TexReg 3033