(a) Purpose and Scope. The purpose of this section is to describe the procedure an eligible insurer must follow when it desires to relocate and maintain all or any portion of its books, records, and accounts and its principal offices outside this state at a location within the United States. To facilitate brevity, "all or any portion of its books, records, and accounts and its principal offices" will be referred to as "records" in this section. Insurance Code Article 1.28 and this section describe the standards that an insurer must meet to be eligible to relocate its records outside this state and sets forth the information an eligible insurer must provide to the department in its notice of intent to relocate records so that the Commissioner of Insurance (Commissioner) can make an informed decision to approve or disapprove the proposed relocation. The normal records relating to the business produced by an agency of an eligible insurer are not subject to Insurance Code Article 1.28. The department interprets the term "agency" in Insurance Code Article 1.28 to mean a person described in Insurance Code Article 21.02. An eligible insurer that desires to relocate its records to an out of state location must provide the information required by subsection (d) of this section. An eligible insurance company that desires to deliver possession of its records to another person located out of state who is an affiliate of the eligible insurer must also provide the information required by subsections (e) and (f) of this section. When that person is not affiliated with the eligible insurer, the person must comply with the provisions of subsections (e) - (g) of this section. Records of a health maintenance organization relating to its quality assurance program are not subject to this section.
(b) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.
  (1) Affiliate--As defined in Insurance Code §823.003.
  (2) Domestic insurance company--As defined in Insurance Code §803.001.
  (3) Eligible insurer--A domestic insurance company that is:
    (A) an affiliate of an insurance holding company system; or
    (B) a health maintenance organization that is an affiliate of another health maintenance organization or health care provider.
  (4) Health care provider--Is the same as the term "provider" in Insurance Code §843.002.
  (5) Insurance holding company system--As defined in Insurance Code §823.006.
(c) Notice of Intent to Relocate Records. An eligible insurer desiring to change the location of its records to a location outside this state must file with Financial Analysis and Examinations, 333 Guadalupe, Austin, Texas 78701 or P.O. Box 149099, Austin, Texas 78714-9099, Mail Code 303-1A an original and one copy of a notice of intent to relocate records setting forth the information required by subsection (d) of this section, accompanied by the required filing fee established in §7.1301(d)(18) of this title (relating to Fees). Alternatively, an eligible insurer complies with this section when it provides the department the information required by this section in an agreement with an affiliate, and such agreement has been approved or not disapproved as required by Insurance Code Article 21.49-1, §4.
(d) Contents of Notice of Intent to Relocate Records. The notice of intent to relocate records required by Insurance Code Article 1.28 and subsection (c) of this section must provide:
  (1) the name of the eligible insurer desiring to relocate its records outside the state;
  (2) the street address of the eligible insurer's principal office or offices (if there is more than one principal office, identify the activities that are performed at each principal office; e.g., accounting, actuarial, investments, underwriting, claims, marketing, data processing, human resources and corporate matters);
  (3) the street address of the location or locations of the eligible insurer's records before the proposed relocation of records (if there is more than one location, identify the records that are maintained at each location; e.g., accounting, actuarial, investments, underwriting, claims, marketing, data processing, human resources and corporate matters);
  (4) the street address of the eligible insurer's principal office or offices after the proposed relocation of records (if there is more than one principal office, identify the activities that will be performed at each principal office; e.g., accounting, actuarial, investments, underwriting, claims, marketing, data processing, human resources and corporate matters);
  (5) the street address of the proposed location or locations of the eligible insurer's records;
  (6) a detailed description of the records that will be maintained at the proposed location or locations named in paragraph (5) of this subsection;
  (7) the anticipated effective date of the proposed relocation of the eligible insurer's records;
  (8) a description of the eligible insurer's affiliation with an insurance holding company system or health maintenance organizations or health care providers;
  (9) if the eligible insurer is affiliated with an insurance holding company system, a statement that the eligible insurer has made the necessary filings required by the Insurance Code Article 21.49-1;
  (10) if the eligible insurer is affiliated with an insurance holding company system, a statement that the eligible insurer is in compliance with the Insurance Code Article 21.49-1;
  (11) if the eligible insurer is a health maintenance organization that is not affiliated with an insurance holding company system, but is affiliated with other health maintenance organizations or health care providers, the health maintenance organization must furnish the information as set forth in §7.210 of this title (relating to Form B);
  (12) a description of any actual, proposed, or contemplated financial involvement with respect to the relocation of the records by an officer, director or employee or a person who is the beneficial owner, directly or indirectly, of 10% or more of the voting securities of the eligible insurer or affiliated insurance holding company system or health maintenance organization;
  (13) an analysis of the benefits to the eligible insurer anticipated as a result of the relocation of the records, including the effect on the location being abandoned;
  (14) a description of the effect of the relocation of the records on policyholders and claimants;
  (15) a service of process form executed by the eligible insurer (see subsection (l) of this section to obtain an example of an acceptable form);
  (16) a service of process form executed by a controlling person of the eligible insurer (see subsection (l) of this section to obtain an example of an acceptable form);
  (17) if the records of the eligible insurer will be maintained by a person other than the eligible insurer, state the name of the person who will be maintaining the records of the eligible insurer;
  (18) if a person is named in paragraph (17) of this subsection, provide the information in subsection (e) of this section; and
  (19) such other related information as the department may require so that an informed determination can be made to approve or disapprove the proposed relocation of records out of state.
(e) Additional Information Required for the Relocation and Possession of Records with a Person Other than the Eligible Insurer. If the eligible insurer intends for a person other than the eligible insurer to possess and maintain its records, the following information must be included in the notice of intent to relocate records:
  (1) the name of the person who will possess and maintain the records;
  (2) the names of the directors, executive officers, principals or principal shareholders of the person named in paragraph (1) of this subsection;
  (3) a statement describing the person's affiliation with the insurance holding company system or health maintenance organization or health care providers named in subsection (d)(8) of this section, if any;
  (4) an explanation and description of control mechanisms in place to assure the effective and efficient reconciliation of the records to be maintained by the person with those corporate records maintained by the eligible insurer;
  (5) an explanation of how the eligible insurer will maintain direct supervision, management and control of the records that are relocated;
  (6) a copy of the agreement between the eligible insurer and the person possessing and maintaining the records. The agreement must comply with the requirements of subsection (f) of this section;
Cont'd...