Texas Insurance Code Title 4, Chapter 401 - Audits And Examinations

SUBCHAPTER A INDEPENDENT AUDIT OF FINANCIAL STATEMENTS

• Texas Section 401.001 - Definitions
  In this subchapter: (1) "Accountant" means an independent certified public accountant or accounting firm that meets the requirements of Section 401.011. (2) "Affiliate" has the...
• Texas Section 401.002 - Purpose Of Subchapter
  The purpose of this subchapter is to require an annual audit by an independent certified public accountant of the financial statements reporting the financial condition...
• Texas Section 401.003 - Effect Of Subchapter On Authority To Examine
  This subchapter does not limit the commissioner's authority to order or the department's authority to conduct an examination of an insurer or health maintenance organization...
• Texas Section 401.004 - Filing And Extensions For Filing Of Audited Financial Report
  (a) Unless exempt under Section 401.006, 401.007, or 401.008 and except as otherwise provided by Sections 401.005 and 401.016, an insurer or health maintenance organization...
• Texas Section 401.005 - Alternative Filing For Canadian Or British Insurers Or Health Maintenance Organizations
  (a) Instead of the audited financial report required by Section 401.004, an insurer or health maintenance organization domiciled in Canada or the United Kingdom may...
• Texas Section 401.006 - Exemption For Certain Small Insurers And Health Maintenance Organizations
  (a) An insurer or health maintenance organization that has less than $1 million in direct premiums written in this state during a calendar year is...
• Texas Section 401.007 - Exemption For Certain Foreign Or Alien Insurers Or Health Maintenance Organizations
  (a) A foreign or alien insurer or health maintenance organization that files an audited financial report in another state in accordance with that state's requirements...
• Texas Section 401.008 - Hardship Exemption
  (a) An insurer or health maintenance organization that is not eligible for an exemption under Section 401.006 or 401.007 may apply to the commissioner for...
• Texas Section 401.009 - Contents Of Audited Financial Report
  (a) An audited financial report required under Section 401.004 must: (1) describe the financial condition of the insurer or health maintenance organization as of the...
• Texas Section 401.010 - Requirements For Financial Statements In Audited Financial Report
  (a) An accountant must audit the financial reports provided by an insurer or health maintenance organization for purposes of an audit under this subchapter. The...
• Texas Section 401.011 - Qualifications Of Accountant; Acceptance Of Audited Financial Report
  (a) Except as provided by Subsections (c) and (d), the commissioner shall accept an audited financial report from an independent certified public accountant or accounting...
• Texas Section 401.012 - Hearing On Accountant Qualifications; Replacement Of Accountant
  The commissioner may hold a hearing to determine if an accountant is qualified and independent. If, after considering the evidence presented, the commissioner determines that...
• Texas Section 401.013 - Accountant's Letter Of Qualifications
  (a) The audited financial report required under Section 401.004 must be accompanied by a letter provided by the accountant who performed the audit stating: (1)...
• Texas Section 401.014 - Registration Of Accountant
  (a) Not later than December 31 of the calendar year to be covered by an audited financial report required by this subchapter, an insurer or...
• Texas Section 401.015 - Resignation Or Dismissal Of Accountant; Statement Concerning Disagreements
  (a) If an accountant who signed an audited financial report for an insurer or health maintenance organization resigns as accountant for the insurer or health...
• Texas Section 401.016 - Audited Combined Or Consolidated Financial Statements
  (a) An insurer or health maintenance organization described by Section 401.001(3) or (4) that is required to file an audited financial report under this subchapter...
• Texas Section 401.017 - Notice Of Adverse Financial Condition Or Misstatement Of Financial Condition
  (a) An insurer or health maintenance organization required to file an audited financial report under this subchapter shall require the insurer's or health maintenance organization's...
• Texas Section 401.018 - Information Discovered After Date Of Audited Financial Report
  If, after the date of an audited financial report filed under this subchapter, the accountant becomes aware of facts that might have affected the report,...
• Texas Section 401.019 - Report On Significant Deficiencies In Internal Control
  (a) In addition to the audited financial report required by this subchapter, each insurer or health maintenance organization shall provide to the commissioner a written...
• Texas Section 401.020 - Accountant Work Papers
  (a) In this section, "work papers" means the records kept by an accountant of the procedures followed, the tests performed, the information obtained, and the...

SUBCHAPTER B EXAMINATION OF CARRIERS

• Texas Section 401.021 - Penalty For Failure To Comply
  (a) If an insurer or health maintenance organization fails to comply with this subchapter, the commissioner shall order that the insurer's or health maintenance organization's...
• Texas Section 401.051 - Duty To Examine Carriers
  (a) The department or an examiner appointed by the department shall visit at the carrier's principal office: (1) each carrier that is organized under the...
• Texas Section 401.052 - Frequency Of Examination
  (a) Subject to Subsection (b) and except as provided by the rules adopted under that subsection, the department shall visit and examine a carrier as...
• Texas Section 401.053 - Examination Period
  Unless the department requests that an examination cover a longer period, the examination must cover the period beginning on the last day covered by the...
• Texas Section 401.054 - Powers Related To Examination
  The department or the examiner appointed by the department: (1) has free access, and may require the carrier or the carrier's agent to provide free...
• Texas Section 401.055 - Effect Of Subchapter On Authority To Use Information
  This subchapter does not limit the commissioner's authority to use a final or preliminary examination report, an examiner's or company's work papers or other documents,...
• Texas Section 401.056 - Rules Related To Reports And Hearings
  The commissioner by rule shall adopt: (1) procedures governing the filing and adoption of an examination report; (2) procedures governing a hearing to be held...
• Texas Section 401.057 - Use Of Audit And Work Papers
  (a) In this section, "work papers" has the meaning assigned by Section 401.020(a). (b) In conducting an examination under this subchapter, the department shall use...
• Texas Section 401.058 - Confidentiality Of Reports And Related Information
  (a) A final or preliminary examination report and any information obtained during an examination are confidential and are not subject to disclosure under Chapter 552,...
• Texas Section 401.059 - Determination Of Value
  In determining the value or market value of an investment in or on real estate or an improvement to real estate by a carrier authorized...
• Texas Section 401.060 - Right To Information Relating To Determination Of Value Or Market Value
  (a) If the department determines the value or market value of an insurer's investment in or on real estate or an improvement to real estate,...
• Texas Section 401.061 - Disciplinary Action For Failure To Comply With Subchapter
  A carrier is subject to disciplinary action under Chapter 82 if the carrier or the carrier's agent fails or refuses to comply with: (1) this...

SUBCHAPTER C EXAMINERS AND ACTUARIES

• Texas Section 401.062 - Stay Of Rule, Order, Decision, Or Finding
  The filing of a petition under Subchapter D, Chapter 36, for judicial review of a rule, order, decision, or finding of the commissioner or department...
• Texas Section 401.101 - Use Of Department Examiner Or Other Qualified Person Or Firm
  The department may use a salaried department examiner or may appoint a qualified person or firm to perform an examination of an insurance organization as...
• Texas Section 401.102 - Legislative Intent As To Appointment Or Employment Of Examiners And Actuaries
  (a) The legislature recognizes that experienced, highly qualified examiners and actuaries are necessary for the department to effectively monitor and regulate the solvency of insurers...
• Texas Section 401.103 - Appointment Of Examiners And Actuaries
  (a) The department shall appoint: (1) a chief examiner and the number of assistant examiners the department considers necessary to conduct examinations of insurance companies,...
• Texas Section 401.104 - Appointment Of Examiners, Actuaries, And Other Persons For Certain Examinations
  (a) The department may commission a department actuary, the chief examiner, another department examiner or employee, or any other person to conduct or assist in...
• Texas Section 401.105 - Oath Of Examiners And Assistants
  Before entering into the duties of appointment as an examiner or assistant examiner, an individual must take and file in the office of the secretary...
• Texas Section 401.106 - Right Of Action On Bond
  If an examiner or assistant examiner knowingly makes a false report or gives any information in violation of law that relates to an examination of...

SUBCHAPTER D EXAMINATION EXPENSES

• Texas Section 401.107 - Registration Of Contract Examiners
  (a) A person with whom another state contracts to perform any examination initiated by the other state of an insurer domiciled in this state shall...
• Texas Section 401.151 - Expenses Of Examination Of Domestic Insurer
  (a) A domestic insurer examined on behalf of this state by the department or under the department's authority shall pay the expenses of the examination...
• Texas Section 401.152 - Expenses Of Examination Of Other Insurers
  (a) An insurer not organized under the laws of this state shall reimburse the department for the salary and expenses of each examiner participating in...
• Texas Section 401.153 - Reimbursement Of Expenses Of Certain Persons Or Firms
  (a) A person or firm appointed by the department to examine an insurer or to assist in the insurer's examination shall be paid for those...
• Texas Section 401.154 - Tax Credit Authorized
  (a) An insurer is entitled to a credit on the amount of premium taxes to be paid by the insurer for all examination fees paid...
• Texas Section 401.155 - Additional Assessments
  (a) The department shall impose additional assessments against insurers on a pro rata basis as necessary to: (1) cover all expenses and disbursements required by...

SUBCHAPTER E CONFIDENTIALITY OF CERTAIN INFORMATION

• Texas Section 401.156 - Deposit And Use Of Assessment And Fee
  (a) The department shall deposit any assessments or fees collected under this subchapter relating to the examination of insurers and other regulated entities by the...

SUBCHAPTER F SELF-DIRECTED BUDGET FOR CERTAIN DIVISIONS

• Texas Section 401.201 - Confidentiality Of Early Warning System Information
  Information relating to the financial solvency of an organization regulated by the department under this code or another insurance law of this state that is...
• Texas Section 401.251 - Definitions
  In this subchapter: (1) "Actuarial division" means the division within the financial program that conducts actuarial examinations of insurers and other entities regulated by the...
• Texas Section 401.252 - Self-directed Budget
  (a) The senior associate commissioner of the financial program shall submit to the commissioner an annual budget of examination costs using generally accepted accounting principles....
• Texas Section 401.253 - Audits
  This subchapter does not affect the duty of the state auditor to audit the financial program. Added by Acts 2011, 82nd Leg., R.S., Ch. 659...
• Texas Section 401.254 - Records; Reporting Requirements
  (a) The financial program shall keep financial and statistical information as necessary to disclose completely and accurately the financial program's receipts and examination costs. (b)...
• Texas Section 401.255 - Membership In Employees Retirement System
  Employees of the actuarial division and financial examinations division are members of the Employees Retirement System of Texas under Chapter 812, Government Code, and the...

Last modified: September 28, 2016