At least every two years, the State Board of Insurance will conduct an evaluation of the loss control information/services of each insurer writing professional liability insurance for insureds other than hospitals, of each insurer writing general liability insurance, and of each insurer writing medical professional liability insurance for insureds other than hospitals in Texas.
  (1) Location of evaluations. Evaluations will be conducted in Texas at a company home office, division office, regional office, or office closest to Austin, or as otherwise arranged through mutual consent between a representative of the director of loss control regulation for the State Board of Insurance and a representative of the insurer. Companies out of state with no office in Texas will be required to bring necessary files to Austin. The insurer shall bring all account files selected by the director of loss control regulation from all Texas company offices or operating locations to the selected evaluation location. All affiliated companies of an insurer shall be evaluated at the same time and location.
  (2) Notification and preparation. Notification and preparation for evaluations shall occur in accordance with subparagraphs (A)-(F) of this paragraph.
    (A) Notice of date of evaluation. The director of loss control regulation will notify each company of the proposed date of the company's evaluation a minimum of 60 days in advance of the evaluation.
    (B) List of policyholder accounts. At least 45 days prior to the date set for the evaluation, the company must provide the director of loss control regulation with a list of policyholder accounts, by premium grouping and location. The list shall be separated by affiliated insurance company, including the name and policy number of each policyholder, and arranged in order of descending premium.
    (C) Notice of accounts to be evaluated. Upon receipt of this list, the director of loss control regulation will select those accounts to be evaluated, notify the company, and specify each account for which an evaluation worksheet must be prepared by the company. Worksheet forms will be provided to the company at the time the accounts to be evaluated are identified.
    (D) Information required. The company will have at least 30 days from the time the accounts are selected to complete the worksheets. Information on the worksheet may include, but is not limited to, the following:
      (i) account identification and location;
      (ii) estimated annual premium;
      (iii) description of operations;
      (iv) date of last loss prevention visit, or direct communication (if any);
      (v) loss/accident data;
      (vi) loss potential of risk;
      (vii) information submitted to policyholders for loss control purposes;
      (viii) extent and type of services provided;
      (ix) number of employees;
      (x) loss ratio;
      (xi) effective date of policy; and
      (xii) other information as deemed necessary by the director of loss control regulation.
    (E) Delivery of information to the board. Five working days prior to the scheduled inspection, the insurer shall deliver the completed worksheets to the Loss Control Regulation Division, State Board of Insurance. Information from account files and other appropriate information and documents shall be made available to the inspectors during the evaluation.
    (F) Possible visit by inspector. If considered necessary, the inspector may visit a policyholder to make further evaluation of the loss control information and services provided. If requested by the inspector, a representative of the insurer shall make the necessary notifications and arrangements and shall be afforded the opportunity to accompany the inspector. If the director of loss control regulation for the State Board of Insurance considers it appropriate, the inspector will make the visit without notifying the insurer.
  (3) Conduct of the evaluation. The inspector will work with a responsible member of insurance company management or a designated representative in the evaluation of the adequacy of the loss control information and services provided to policyholders. The evaluation will be conducted in two parts. Part one will consist of the review and analysis of company records and a determination of how loss control information and services are made available to policyholders. Part two will consist of an exit briefing on the preliminary results of the evaluation. A written report will be provided in accordance with paragraph (5) of this section.
  (4) Records and procedures to be reviewed. Records and procedures which the company must make available for review and evaluation are listed in subparagraphs (A)-(E) of this paragraph.
    (A) Loss control personnel qualifications. The insurer shall make available, at the beginning of the evaluation, a list of personnel performing the duties of providing loss information and services. The list will include the name, office location, designation as employee or contractor, and statement of qualifications pursuant to §5.1731 of this title (relating to Qualifications of Personnel Providing Loss Control Information and Services). The inspector will review qualifications of all personnel performing the duties of providing loss control information and services.
    (B) Availability of information and services. The company shall make available examples of procedures by which policyholders are informed of the availability of loss control information/services. Also to be reviewed are the procedures followed by the company regarding requests by the insured for loss control information and services.
    (C) Loss control information and services. The inspector will review the mechanisms and procedures by which the appropriate loss control information and service is determined under the guidelines outlined in §5.1721 of this title (relating to Loss Control Information). The company shall maintain a record by policyholder of all loss control information and services rendered.
    (D) Worksheets and policyholder files. A detailed review of completed worksheets and information from selected policyholder files will be made to ascertain the adequacy and quality of loss control information and services.
    (E) Other data. The inspector may review other data or information in the course of the evaluation of the adequacy of loss control information and services. Such information may include, but is not limited to, liability loss/claims notification procedures, liability loss investigation and analysis, examples of cost savings for policyholders as a result of liability loss practices, and follow up efforts on recommendations made to policyholders.
  (5) Loss control reports. Upon completion of the inspection, the inspector will prepare a written report to be provided to upper level management of the insurance company. The report will reflect the inspector's observations, conclusions, and analysis of the adequacy of the company's loss control information and services as required by the Insurance Code, Article 5.15-3. When appropriate, recommendations for improvement will be a part of the report.

Source Note: The provisions of this §5.1723 adopted to be effective November 9, 1990, 15 TexReg 6194.