1. (a) Any authorized insurer or HMO must file with the Commissioner of Insurance a plan of orderly withdrawal before the insurer or HMO undertakes total or substantial withdrawal from a line of insurance.

   1. (1) The insurer or HMO undertakes total withdrawal from a line of insurance when it takes any action on its own initiative that will result in the insurer's or HMO's ceasing to write a line of insurance, as defined in §7.1803 of this title (relating to What Constitutes a Line of Insurance). An insurer or HMO will not be held to have acted on its own initiative in effecting a total withdrawal from a line of insurance when it acts pursuant to a Commissioner disciplinary or administrative directive or order, or when the insurer or HMO acts pursuant to a directive of a supervisor, conservator, or receiver. If any out-of-state directive or order is not provided to the Commissioner within 30 days of the issuance of any such directive or order, the insurer or HMO will be held to have acted on its own initiative.
   2. (2) The insurer or HMO undertakes substantial withdrawal from a line of insurance when it takes any action on its own initiative that will result in reducing the insurer's or HMO's total annual premium volume in Texas for the current calendar year for a line of insurance, as defined in §7.1803 of this title, by 75% or more of the total annual premium volume in Texas for the immediately preceding calendar year for such line of insurance. An insurer or HMO will not be held to have acted on its own initiative in effecting a substantial withdrawal from a line of insurance when it acts pursuant to a Commissioner disciplinary or administrative directive or order, or when the insurer or HMO acts pursuant to a directive of a supervisor, conservator, or receiver. If any out-of-state directive or order is not provided to the Commissioner within 30 days of the issuance of any such directive or order, the insurer or HMO will be held to have acted on its own initiative.

2. (b) Exceptions. An insurer or HMO is not required to file a plan of orderly withdrawal, but shall instead notify the Department, when:

   1. (1) the insurer is transferring business from the insurer to a company within the same insurance holding company system, as defined in the Insurance Holding Company System Regulatory Act, the Insurance Code, Article 21.49-1, §2, and admitted to do business in this state;
   2. (2) the line of business is written by a stipulated premium company unless such line is written pursuant to the Texas Insurance Code, Article 22.23(b) or Article 22.23A;
   3. (3) the HMO is transferring business from the HMO to an affiliated HMO; or
   4. (4) 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.
3. (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 shall affirm that any appropriate state or federal agency has been notified of the company's intent to withdraw, and shall include the effective date of non-renewal, the names of the Texas counties affected, and the number of insureds or enrollees affected.
4. (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 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.