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§ 114.3. Application Form and Financial Information Requirements

(a) Employers shall submit an application by filing a completed and signed application in the form and manner prescribed by the commissioner and must include:

(1) if required to file a Form 10-K by the U.S. Securities and Exchange Commission (SEC), the applicant’s Form 10-K for the preceding three fiscal years; and

(2) the applicant’s independently audited financial statements according to Generally Accepted Auditing Standards of the American Institute of Certified Public Accountants with the accompanying footnotes and the auditor’s opinion for the preceding three fiscal years.

(b) Incomplete applications may be returned to the applicant.

(c) An incomplete application may be treated as voluntarily withdrawn if the applicant fails to respond to any request for information by the division for more than 90 days from the date the request is deemed received by the applicant, as provided by division rule.

(d) The sworn affidavit required on any self-insurance application or other document requiring a sworn affidavit also applies to all attachments, additions, and any subsequent amendments to those documents.

(e) If the financial statements under subsection (a)(2) of this section are dated more than six months prior to the date of the application, interim financial statements may be required.

(f) Applicants will be evaluated for stability and financial strength. Applicants shall provide information relevant to the factors specified in Texas Labor Code §407.061 and §407.062 and shall ensure that a credit or debt rating and an analysis of that rating have been prepared by one of the following:

(1) Dun & Bradstreet or other recognized credit reporting agency’s ratings; or

(2) debt ratings from Standard & Poor’s or Moody’s.

(g) In addition to reviewing the information required in subsection (f) of this section, the commissioner shall consider the applicant’s:

(1) liquidity ratio;

(2) ratio of current assets to current liabilities;

(3) ratio of tangible net worth to long-term debt;

(4) ratio of tangible net worth to total liabilities;

(5) cash flow;

(6) working capital;

(7) profitability; and

(8) one of the following:

(A) Dun & Bradstreet or other recognized credit reporting agency’s ratings; or

(B) debt ratings from Standard & Poor’s or Moody’s.

The provisions of this §114.3 adopted to be effective January 1, 1993, 17 TexReg 7896; amended to be effective May 9, 2004, 29 TexReg 4186; amended to be effective January 6, 2019, 44 TexReg 99.

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At a Glance:

Title:

§ 114.3. Application Form and Financial Information Requirements

Title:

Title 28. Insurance

Status:

Current

Usage:

New Law Rule

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