1. (a) Scope. This section provides insurers and other regulated entities with the filing requirements for the 1996 annual statement, 1997 quarterly statements, other reporting forms, and diskettes necessary to report information concerning the financial condition and business operations and activities of insurers. This section applies to all insurers and other regulated entities authorized to do the business of insurance in this state and includes, but is not limited to, life insurers; accident insurers; life and accident insurers; life and health insurers; accident and health insurers; life, accident and health insurers; mutual life insurers; stipulated premium insurers; group hospital service corporations; fire insurers; fire and marine insurers; general casualty insurers; fire and casualty insurers; mutual insurers other than life; county mutual insurers; Lloyd's plans; reciprocal and inter-insurance exchanges; domestic risk retention groups; domestic joint underwriting associations; title insurers; fraternal benefit societies; local mutual aid associations; statewide mutual assessment companies; mutual burial associations; exempt associations; farm mutual insurers; health maintenance organizations; nonprofit health corporations; and nonprofit legal services corporations. The commissioner of insurance adopts by reference the 1996 annual and 1997 quarterly statement blanks, instruction manuals, and other reporting forms specified in this section. The annual and quarterly statement blanks and other reporting forms are available from the Texas Department of Insurance, Financial Monitoring Activity, Mail Code 303-1A, P.O. Box 149099, Austin, Texas 78714-9099. Insurers and other regulated entities shall properly report to the Texas Department of Insurance and the National Association of Insurance Commissioners (NAIC) completing the appropriate annual and quarterly statement blanks, prepared with laser quality print (hand written copies must be prepared legibly using black ink), other reporting forms, and machine-readable diskettes following the applicable instructions as outlined in subsections (c)-(l) of this section.

2. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Association edition--Blanks and forms promulgated by the National Association of Insurance Commissioners.
   2. (2) Commissioner--The commissioner of insurance appointed under the Insurance Code, Article 1.09.
   3. (3) Department--The Texas Department of Insurance.
   4. (4) Insurer--A person or business entity legally organized in and authorized by its domiciliary jurisdiction to do the business of insurance.
   5. (5) NAIC--The National Association of Insurance Commissioners.
   6. (6) Texas edition--Blanks and forms promulgated by the commissioner of insurance.

3. (c) Filing requirements for life, accident and health insurers. Each life, life and accident, life and health, accident and health, mutual life, or life, accident and health insurance company, stipulated premium insurance company, and group hospital services corporation shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports and diskettes identified in paragraphs (1)(A)-(J); (2)(A),(B); and (3)(A)-(D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Life, Accident and Health, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(E) and (F) shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Life/Health, except as provided by paragraph (4) of this subsection.

   1. (1) Reports to be filed both with the department and the NAIC include the following:

      1. (A) Annual Statement (association edition, Form 1 or Form 11, with a blue colored cover made of minimum 65 lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);
      2. (B) Annual Statement of the Separate Accounts (association edition, Form 1-S, with a green colored cover made of minimum 65lb. paper) (required of companies maintaining separate accounts), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);
      3. (C) Trusteed Surplus Statement (association edition, Life, Accident and Health Supplement) (required of the U.S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997;
      4. (D) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997 (stipulated premium insurance companies, May 1, 1997);
      5. (E) Schedule DS (association edition) (required only of companies that have included equity in the undistributed income of unconsolidated subsidiaries in its net gain/(loss) from operations), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);

      6. (F) Life and Accident and Health Quarterly Statement (association edition) (required of companies filing Form 1), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997. However, a Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file quarterly statements with the department or the NAIC if it meets all three of the following conditions:

         1. (i) it is authorized to write only life insurance on its certificate of authority;
         2. (ii) it collected premiums in the prior calendar year of less than $1 million; and
         3. (iii) it had a profit from operations in the prior two calendar years;
      7. (G) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; required of all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection;
      8. (H) Combined Life, Accident and Health Annual Statement (association edition, Form 1, with a blue colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 1, 1997. This form is required only for those affiliated insurers that wrote more than $35 million in direct premiums, as a group, in 1996 as defined in Schedule T of the Annual Statement;
      9. (I) Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997; and
      10. (J) Adjustments to the Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997.

   2. (2) Reports to be filed only with the department:

      1. (A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      2. (B) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997 (stipulated premium companies, April 1, 1997);
      3. (C) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper) (required of companies writing prepaid legal business in 1996), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997;
      4. (D) Affidavit in Lieu of Annual Statement (required of companies authorized to write prepaid legal business that did not write such business in 1996), to be filed on or before March 1, 1997;
      5. (E) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);
      6. (F) Analysis of Surplus, for life, accident and health insurers, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); and
      7. (G) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page ten of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997 (stipulated premium companies, April 1, 1997).

   3. (3) Reports and diskettes to be filed only with the NAIC:

      1. (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);
      2. (B) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit business), 9 inch x 14 inch size, to be filed on or before April 1, 1997;
      3. (C) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997), in addition to the Long-Term Care Experience Reporting Forms included in the annual statement required by paragraph (1)(A) of this subsection;
      4. (D) Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997 (stipulated premium insurance companies, May 1, 1997);
      5. (E) machine-readable diskettes containing computerized annual statement data (required of companies filing annual statement Form 1), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997);

      6. (F) machine-readable diskettes containing computerized quarterly statement data (required of companies filing annual statement Form 1), to be filed on or before May 15, August 15, and November 15, 1997. However, a Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file diskettes with the NAIC if it meets all three of the following conditions:

         1. (i) it is authorized to write only life insurance on its certificate of authority;
         2. (ii) it collected premiums in the prior calendar year of less than $1 million; and
         3. (iii) it had a profit from operations in the prior two calendar years.

   4. (4) The following provisions shall apply to the filings required in paragraphs (1)-(3) of this subsection.

      1. (A) Texas domestic life, accident and health companies with more than $30 million in direct premiums in 1996 must establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions, Life, Accident and Health Companies. Texas domestic companies with $30 million or less in direct premiums may establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions, Life, Accident and Health Companies or they must value bonds and preferred stocks in compliance with the provisions of §7.16 of this title (relating to NAIC Purposes and Procedures of the Securities Valuation Office Manual) concerning companies not maintaining an Asset Valuation Reserve or Interest Maintenance Reserve.
      2. (B) The statement of actuarial opinion should follow the guidelines and standards for statements of actuarial opinion prescribed by regulation authorized by Section 3, Actuarial opinion of Reserves of the Standard Valuation Law as amended by the NAIC in December 1990, unless exempted. For those companies exempted from such regulation, instructions 1-12, established by the NAIC, must be applied.
      3. (C) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code.

4. (d) Requirements for property and casualty insurers. Each fire, fire and marine, general casualty, fire and casualty, county mutual insurance company, mutual insurance company other than life, Lloyd's plan, reciprocal or inter-insurance exchange, domestic risk retention group, life insurance company that is licensed to write workers' compensation, any farm mutual insurance company that filed a Form 2 for the 1995 calendar year or had with gross written premiums in 1996 as of December 31, 1996, in excess of $5,000,000, any Mexican non-life insurer licensed under any article of the Insurance Code other than or in addition to Insurance Code, Article 8.24, and domestic joint underwriting associations shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports, and diskettes identified in paragraphs (1)(A)-(H); (2)(A),(B); and (3)(A)-(D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Property and Casualty, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(E) and (F) of this subsection shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Property/Casualty, except as provided by paragraph (4) of this subsection.

   1. (1) Reports to be filed both with the department and the NAIC:

      1. (A) Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      2. (B) Trusteed Surplus Statement (association edition, Property and Casualty Supplement) (required of the U. S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997;
      3. (C) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997;
      4. (D) Financial Guaranty Insurance Exhibit (association edition) (required of companies writing financial guaranty business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      5. (E) Supplement "A" to Schedule T, Exhibit of Medical Malpractice Premiums Written (association edition) (required of companies writing medical malpractice business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      6. (F) Property and Casualty Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997;
      7. (G) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; required of all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection; and
      8. (H) Combined Property/Casualty Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 1, 1997, including the Insurance Expense Exhibit. This form is required only for those affiliated insurers that wrote more than $35 million in direct premiums, as a group, in 1996 as defined in Schedule T of the Annual Statement.

   2. (2) Reports to be filed only with the department:

      1. (A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      2. (B) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      3. (C) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page six of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997;
      4. (D) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper) (required of companies writing prepaid legal business in 1996), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997;
      5. (E) Affidavit in Lieu of Annual Statement (required of companies authorized to write prepaid legal business that did not write such business in 1996), to be filed on or before March 1, 1997;
      6. (F) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      7. (G) Analysis of Surplus, for property and casualty insurers (required of all licensed companies, except Texas domestic county mutual companies), to be filed on or before March 1, 1997;
      8. (H) Supplement for County Mutuals (required of Texas domestic county mutual companies, as an attachment to page seventeen of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997;
      9. (I) Texas Supplemental A for County Mutuals (required of Texas domestic county mutual companies, as an attachment to page nine of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997; and
      10. (J) Form ALT/P/WC, Application for Alternative Excess Statutory Over Statement Reserves for Workers' Compensation (required of deductible plan workers' compensation writers if applying for an alternative basis of calculating the excess statutory over statement reserves for workers' compensation business), to be filed on or before January 31, 1997.

   3. (3) Reports and diskettes to be filed only with the NAIC:

      1. (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997;
      2. (B) Insurance Expense Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997;
      3. (C) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit accident and/or health business), 9 inch x 14 inch size, to be filed on or before April 1, 1997;
      4. (D) Long-Term Care Experience Reporting Forms (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997;
      5. (E) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997; and
      6. (F) machine-readable diskettes containing computerized quarterly statement data, to be filed on or before May 15, August 15, and November 15, 1997.

   4. (4) The following provisions shall apply to all filings required by paragraphs (1)-(3) of this subsection.

      1. (A) No loss reserve discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims for which specific segregated investments have been established, shall be allowed; provided, however, any company that claimed loss reserve discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims, as of December 31, 1991, shall be allowed to claim such reserve discounts at the applicable percentage. The applicable percentage for claiming such loss reserve discounts shall be 100% for 1992, 75% for 1993, 50% for 1994, 25% for 1995, 1996, 0% for 1996, 1997 and subsequent years. In no event shall the dollar amount of discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims, claimed as of December 31, 1991, and subject to the applicable percentage, be increased as of December 31, 1992 and thereafter. The commissioner shall have the authority to determine the appropriateness of, and may disapprove, discounts taken as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims.
      2. (B) The commissioner shall have the authority to determine the appropriateness of, and may disapprove, anticipated salvage and subrogation.
      3. (C) Since workers' compensation legislation enacted by the 71st Texas Legislature, effective January 1, 1991, has effected the pricing and loss ratios for workers' compensation business written in the State of Texas, some insurers may be exempt from establishing the entire excess of statutory reserves over statement reserves, also known as the Schedule P penalty reserve, as would otherwise be required by the NAIC Annual Statement Instructions, Property and Casualty. Specifically, Texas domestic insurers that wrote workers' compensation in Texas, but no state other than Texas, in years 1993, 1994, 1995 and 1996 and whose loss experience prior to 19941993 would require the establishment of a Schedule P penalty reserve using a loss ratio greater than 65% may calculate the reserve based on a loss ratio of 65%. The exemption herein described shall only be for the 1996 annual and 1997 interim financial statements. Reserving in this manner is intended to be consistent with the regulatory desire to attain competitive rates for workers' compensation written in Texas.

      4. (D) Insurers meeting certain eligibility criteria and not claiming the exemption provided in paragraph (4)(C) of this subsection may apply for approval of an alternative basis of calculating the Excess of Statutory Over Statement Reserve, also known as the Schedule P penalty reserve, for workers' compensation business. The application for an alternative basis for calculating this reserve applies only to workers' compensation business written pursuant to deductible plans authorized by Insurance Code, Article 5.55C.

         1. (i) Eligibility is generally available to insurers that are domiciled or commercially domiciled in Texas and that demonstrate that their standard premium, prior to application of deductible credits, written pursuant to deductible plans was at least 80% of total standard premium for all workers' compensation business for each of the years for which an alternative calculation is requested.
         2. (ii) To apply for an alternative basis of calculating the penalty reserve, an eligible insurer must complete Form ALT/P/WC, Application for Alternative Excess of Statutory Over Statement Reserve for Workers' Compensation. Forms may be obtained by writing the Financial Monitoring Activity, Texas Department of Insurance, MC 303-1A, P.O. Box 149099, Austin, Texas 78714-9099, or calling (512) 322-5002. Completed applications must be filed with the department on or before January 31, 1997.
         3. (iii) The commissioner may grant an exception or alternative to requiring the full Schedule P penalty reserve for workers' compensation business upon finding such treatment is warranted based on the insurer's application. Insurers that do not obtain the prior written approval of the department for an alternative basis of calculating the Schedule P penalty reserve as provided in the subparagraph shall calculate the penalty reserve in accordance with the current NAIC Annual Statement Instruction, Property and Casualty.
      5. (E) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this section and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this section shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code.

5. (e) Requirements for fraternal benefit societies. Each fraternal benefit society shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports, and diskettes identified in paragraphs (1)(A)-(E); (2)(A),(B); and (3)(A),(B) and (D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Fraternal, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(C) of this subsection shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Fraternal, except as provided by paragraph (4) of this subsection.

   1. (1) Reports to be filed both with the department and the NAIC:

      1. (A) Annual Statement (association edition, Form 4, with a brown colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      2. (B) Annual Statement of the Separate Accounts (association edition, Form 1-S, with a green colored cover made of minimum 65lb. paper) (required of companies maintaining separate accounts), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997;
      3. (C) Trusteed Surplus Statement (association edition, Fraternal Supplement) (required of the U. S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997;
      4. (D) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997; and
      5. (E) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; to be filed by all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection.

   2. (2) Reports to be filed only with the department:

      1. (A) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      2. (B) Fraternal Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997;
      3. (C) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      4. (D) Analysis of Surplus, for fraternal benefit societies, to be filed on or before March 1, 1997;
      5. (E) Fraternal Benefit Societies--Supplement to Valuation Report, to be filed on or before June 30, 1997; and
      6. (F) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page ten of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997.

   3. (3) Reports and diskettes to be filed only with the NAIC:

      1. (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997;
      2. (B) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997, in addition to the Long-Term Care Experience Reporting Forms included in the annual statement required in paragraph (1)(A) of this subsection;
      3. (C) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997; and
      4. (D) Fraternal Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997.

   4. (4) The following provisions shall apply to the filings required in paragraph (1)-(3) of this subsection.

      1. (A) Texas domestic fraternal companies with more than $30 million in direct premiums in 1996 must establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions Fraternal. Texas domestic fraternal companies with $30 million or less in direct premiums may establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions Fraternal or they must value bonds and preferred stocks in compliance with the provisions of §7.16 of this title (relating to NAIC Purposes and Procedures of the Securities Valuation Office Manual) concerning companies not maintaining an Asset Valuation Reserve or Interest Maintenance Reserve.
      2. (B) Since fraternals are exempted in Texas from the requirements of Section 3 Actuarial Opinion of Reserves of the Standard Valuation Law as amended by the NAIC in December 1990, the statement of actuarial opinion for fraternals should follow instructions 1-12, established by the NAIC.
      3. (C) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code.

6. (f) Requirements for title insurers. Each title insurance company shall complete and file the following blanks and forms for the 1996 calendar year and the first three quarters of the 1997 calendar year. The reports and forms identified in paragraphs (1)(A), (B); (2)(A), (B), and (F); and (3)(A) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Title, except as otherwise provided by this subsection. The diskette identified in paragraph (3)(B) of this subsection shall be completed in accordance with the current NAIC Title Annual and Quarterly Diskette Filing Specifications, except as provided by paragraph (4) of this subsection.

   1. (1) Reports to be filed with the department and the NAIC:

      1. (A) Annual Statement (association edition, Form 9, with a salmon colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; and
      2. (B) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997.

   2. (2) Reports to be filed only with the department:

      1. (A) Supplemental Compensation Exhibit (association edition), 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      2. (B) Title Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997;
      3. (C) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      4. (D) Analysis of Surplus, for title insurers, to be filed on or before March 1, 1997;
      5. (E) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page six of the annual statement as required in paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997;
      6. (F) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997.
      7. (G) Supplemental Schedule of Business Written By Agency (should include only agents which individually account for one percent or more of total premiums written), to be filed on or before April 1, 1997.

   3. (3) Reports to be filed only with the NAIC.

      1. (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997.
      2. (B) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997.
   4. (4) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code.

7. (g) Requirements for health maintenance organizations. Each health maintenance organization and non-profit health corporation shall complete and file the following blanks and forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports and diskettes identified in paragraphs (1)(A)-(C) and (2)(A),(B) of this subsection shall be completed in accordance with the NAIC Annual Statements Instructions, Health Maintenance Organizations. The forms, reports and diskettes identified in paragraphs (1)(A), (2)(A)-(C), (E)-(G), and (3) of this subsections shall be completed in accordance with Specific Instructions For Filing of HMO Annual Financial Statements with the Texas Department of Insurance and Specific Instructions For Filing of HMO Quarterly Financial Statements with the Texas Department of Insurance (provided by the department) shall also be used to complete the forms and reports identified in paragraphs (1)(A)-(D) of this subsection. The diskettes identified in paragraph (3) of this subsection shall be completed in accordance with the current NAIC Health Maintenance Organization Annual Diskette Filing Specifications.

   1. (1) Reports to be filed both with the department and the NAIC:

      1. (A) Annual Statement (association edition, HMO with an orange colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997;
      2. (B) Management's Discussion and Analysis (a narrative document setting forth information which enable regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997;
      3. (C) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; to be filed by all health maintenance organizations), to be attached to the annual statement required by paragraph (1)(A) of this subsection;

   2. (2) Reports to be filed only with the department:

      1. (A) Supplemental Compensation Exhibit (association edition), 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      2. (B) HMO Quarterly Statement (association edition), 8 1/2 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997;
      3. (C) HMO Supplement, 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997;
      4. (D) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997;
      5. (E) Exhibit Z, 8 1/2 inch x 14 inch size, to be filed on or before March 1, May 15, August 15, and November 15, 1997;
      6. (F) Department formatted diskettes containing annual statement data (diskettes provided by the department for entering of health maintenance organization or non-profit health corporation financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before March 1, 1997; and
      7. (G) Department formatted diskettes containing quarterly statement data (diskettes provided by the department for entering of health maintenance organization or non-profit health corporation financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before May 15, August 15, and November 15, 1997.
   3. (3) Reports and diskettes to be filed only with the NAIC. The machine-readable diskettes containing computerized annual statement data, must be filed on or before March 1, 1997;
   4. (4) In the event of a conflict between the Insurance Code, any existing departmental rule, form, or instruction, or any specific requirement of this subsection required in paragraphs (1)-(3), and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code.

8. (h) Requirements for farm mutual insurers not subject to the provisions of subsection (d) of this section. Each farm mutual insurance company shall file the following completed blanks and forms for the 1996 calendar year with the department only:

   1. (1) Annual statement (Texas edition, with a tan colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997;
   2. (2) Texas Overhead Assessment Form, to be filed on or before March 1, 1997;
   3. (3) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items), to be attached to the annual statement required by paragraph (1) of this subsection, unless otherwise exempted.

9. (i) Requirements for mutual assessment companies, mutual aid and mutual burial associations, and exempt companies. Each statewide mutual assessment company, local mutual aid association, local mutual burial association, and exempt company shall file the following completed blanks and forms for the 1996 calendar year with the department only:

   1. (1) Annual Statement (Texas edition, with an orange colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before April 1, 1997, provided, however, exempt companies are not required to complete lines 22, 23, 24, 25, and 26 on page 3, the special instructions at the bottom of page 3, and pages 4, 5, 6, and 7. All other pages are required;
   2. (2) Texas Overhead Assessment Form, to be filed on or before April 1, 1997;
   3. (3) Release of Contributions Form, to be filed on or before April 1, 1997;
   4. (4) 3 1/2% Chamberlain Reserve Table (Reserve Valuation), to be filed on or before April 1, 1997;
   5. (5) Reserve Summary (1956 Chamberlain Table 3 1/2%), to be filed on or before April 1, 1997;
   6. (6) Inventory of Insurance in Force by Age of Issue or Reserving Year, to be filed on or before April 1, 1997; and
   7. (7) Summary of Inventory of Insurance In Force by Age and Calculation of Net Premiums, to be filed on or before April 1, 1997.

10. (j) Requirements for non-profit legal service corporations. Each non-profit legal service corporation shall file the following completed blanks and forms for the 1996 calendar year only with the department only:

    1. (1) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; and
    2. (2) Texas Overhead Assessment Form, to be filed on or before March 1, 1997.

11. (k) Requirements for Mexican casualty companies. Each Mexican casualty company doing business as authorized by a Certificate of Authority issued under Texas Insurance Code, Article 8.24, shall complete and file the following blanks and forms for the 1996 calendar year with the department only. All submissions shall be printed or typed in English and all monetary values shall be clearly designated in United States dollars. The form identified in paragraph (1) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Property and Casualty, except as provided by this section. An actuarial opinion is not required. In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. The blanks or forms are as follows:

    1. (1) Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), 12 inch x 19 inch size, provided, however, only pages 1-4, 15, 17, 18, 19 and 137 are required to be completed, to be filed on or before March 1, 1997;
    2. (2) A copy of the balance sheet and the statement of profit and loss from the Mexican financial statement (printed or typed in English), to be filed on or before March 1, 1997;
    3. (3) A copy of the official documents issued by the COMISION NACIONAL DE SEGUROS Y FIANZAS approving the current year's annual statement, to be filed on or before June 30, 1997; and
    4. (4) A copy of the current license to operate in the Republic of Mexico, to be filed on or before March 1, 1997.
12. (l) Other financial reports. Nothing in this section prohibits the department from requiring any insurer or other regulated entity from filing other financial reports with the department.

Source Note:The provisions of this §7.66 adopted to be effective January 8, 1997, 21 TexReg 12542.