Sec. 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 may apply in writing to the commissioner for approval to file audited combined or consolidated financial statements instead of separate audited financial reports if the insurer or health maintenance organization:
(1) is part of a group of insurers or health maintenance organizations that uses a pooling arrangement or 100 percent reinsurance agreement that affects the solvency and integrity of the insurer's or health maintenance organization's reserves; and
(2) cedes all of the insurer's or health maintenance organization's direct and assumed business to the pool.
(b) An insurer or health maintenance organization must file an application under Subsection (a) not later than December 31 of the calendar year for which the audited combined or consolidated financial statements are to be filed.
(c) An insurer or health maintenance organization that receives approval from the commissioner under this section shall file a columnar combining or consolidating worksheet for the audited combined or consolidated financial statements that includes:
(1) the amounts shown on the audited combined or consolidated financial statements;
(2) the amounts for each insurer or health maintenance organization stated separately;
(3) the noninsurance operations shown on a combined or individual basis;
(4) explanations of consolidating and eliminating entries; and
(5) a reconciliation of any differences between the amounts shown in the individual insurer or health maintenance organization columns of the worksheet and comparable amounts shown on the insurer's or health maintenance organization's annual statements.
(d) An insurer or health maintenance organization that does not receive approval from the commissioner to file audited combined or consolidated financial statements for the insurer or health maintenance organization and any of the insurer's or health maintenance organization's subsidiaries or affiliates shall file a separate audited financial report.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Structure Texas Statutes
Title 4 - Regulation of Solvency
Subtitle A - General Provisions
Chapter 401 - Audits and Examinations
Subchapter A. Independent Audit of Financial Statements
Section 401.002. Purpose of Subchapter
Section 401.003. Effect of Subchapter on Authority to Examine
Section 401.004. Filing and Extensions for Filing of Audited Financial Report
Section 401.006. Exemption for Certain Small Insurers and Health Maintenance Organizations
Section 401.007. Exemption for Certain Foreign or Alien Insurers or Health Maintenance Organizations
Section 401.008. Hardship Exemption
Section 401.009. Contents of Audited Financial Report
Section 401.010. Requirements for Financial Statements in Audited Financial Report
Section 401.011. Qualifications of Accountant; Acceptance of Audited Financial Report
Section 401.012. Hearing on Accountant Qualifications; Replacement of Accountant
Section 401.013. Accountant's Letter of Qualifications
Section 401.014. Registration of Accountant
Section 401.015. Resignation or Dismissal of Accountant; Statement Concerning Disagreements
Section 401.016. Audited Combined or Consolidated Financial Statements
Section 401.017. Notice of Adverse Financial Condition or Misstatement of Financial Condition
Section 401.018. Information Discovered After Date of Audited Financial Report
Section 401.019. Report on Significant Deficiencies in Internal Control