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

   1. (1) Commissioner--Commissioner of insurance, Texas Department of Insurance.
   2. (2) Associate commissioner--The associate commissioner, Financial Program of the Texas Department of Insurance or any successor named by the commissioner.
   3. (3) Company--An insurer, group hospital service plan, or health maintenance organization authorized to do business under the laws of this state.
   4. (4) Final examination report--An examination report which has been the subject of an exit interview between the examiner-in-charge and company management, any management conferences between the chief examiner and company management, and which has been certified as "final" by the chief examiner. A final examination report does not include work papers related to the examination or report.
   5. (5) Financial statement--A balance sheet, income statement, schedule showing results of operations, summary of operations, underwriting and investment exhibit, schedule of capital and surplus accounts, or other similar schedules reflecting financial information about a company.
   6. (6) Market conduct examination--An examination which focuses on the performance and general business practices of a company in its dealings with policyholders and the general public.
   7. (7) Examination report--A report which contains a financial statement of the company examined or which reflects the results of a market conduct examination. An examination report does not include work papers related to the examination or report.
   8. (8) Adopted examination report--An examination report which has been adopted or deemed adopted by the associate commissioner pursuant to this section. An adopted examination report does not include work papers related to the examination or report.
2. (b) Applicability. This section applies only to examination reports with examination dates as of June 30, 1992, or later.

3. (c) Filing of examination reports.

   1. (1) Examination reports prepared by the Texas Department of Insurance. Upon completion of an examination, the examiner-in-charge shall provide company management a copy of the examination report for review. Upon completion of company management's review of the report, the examiner-in-charge shall immediately conduct an exit interview with company management. A factual rebuttal by company management shall be noted in the completed examination report along with written comments to the factual rebuttal by the examiner-in-charge. The examiner-in-charge shall submit the completed examination report to the chief examiner within 15 days after the exit interview and simultaneously furnish the company a copy for its retention. Within 30 days after the exit interview, the company examined may submit a written request for a management conference with the chief examiner on the examination report. The company's request shall include a detailed statement of the company's disagreement with the report. The chief examiner may request a management conference to address any regulatory concerns raised by the examination. The management conference must be scheduled for a date within 30 days after the request is made. If no conference is requested by either the company or the chief examiner within the time permitted, the chief examiner shall proceed as provided in subsection (d)(1) of this section, and the examination report shall be deemed adopted by the associate commissioner.
   2. (2) Examination reports prepared by other jurisdiction. In lieu of examining any foreign or alien insurer licensed in this state, the Texas Department of Insurance may accept an examination report on the company prepared by the insurance department for the company's state of domicile.

4. (d) Notice to associate commissioner.

   1. (1) Examination reports prepared by the Texas Department of Insurance. No later than 15 days following any management conference conducted pursuant to subsection (c)(1) of this section, the chief examiner may make changes to the report which are believed to be necessary or proper. After any such changes are made, the chief examiner shall simultaneously:

      1. (A) certify the examination report as final;
      2. (B) notify the associate commissioner of the certification; and
      3. (C) transmit a copy of the final report to the company examined.
   2. (2) Examination reports prepared by other jurisdictions. The chief examiner shall notify the associate commissioner of each examination report received pursuant to subsection (c)(2) of this section. Each such report shall be deemed to be a final report.

5. (e) Adoption of reports.

   1. (1) Appeal of final report. A company which is the subject of a final examination report prepared by the Texas Department of Insurance and which has had a management conference pursuant to subsection (c)(1) of this section may, within 15 days after its receipt of the final report transmitted by the chief examiner pursuant to subsection (d)(1)(C) of this section, submit for the associate commissioner's consideration a written factual rebuttal to the report. Within 30 days following receipt of the rebuttal, the associate commissioner shall adopt the examination report, either with or without changes or shall reject the report. A report will not be considered an adopted report during the pendency of any appeal to the commissioner or other appeal under the Insurance Code, Article 1.04. Any appeal to the commissioner must be filed with the commissioner within 15 days from the company's receipt of the associate commissioner's decision. If no written rebuttal is submitted within the time permitted, no further action is required and the report shall be deemed adopted by the associate commissioner.
   2. (2) Commissioner's authority. Nothing contained herein shall be construed to limit the commissioner's authority to use any final or preliminary examination report, any examiner or company work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may deem appropriate.
   3. (3) Disclosure by commissioner. Nothing contained herein shall be construed to prohibit the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the insurance department of any other state or country, or to law enforcement officials of this or any other state, or to an agency of the federal government at any time. The commissioner may request any recipient of such reports or matters relating thereto to agree in writing to hold it confidential and in a manner consistent with this section.

Source Note:The provisions of this §7.83 adopted to be effective July 2, 1992, 17 TexReg 4449; amended to be effective April 6, 1994, 19 TexReg 2065; amended to be effective February 15, 1996, 21 TexReg 878.