Tex. Ins. Code 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 firm that:

(1)

is a member in good standing of the American Institute of Certified Public Accountants and is in good standing with all states in which the accountant or firm is licensed to practice, as applicable; and

(2)

conforms to the American Institute of Certified Public Accountants Code of Professional Conduct and to the rules of professional conduct and other rules of the Texas State Board of Public Accountancy or a similar code.

(b)

If the insurer or health maintenance organization is domiciled in Canada, the commissioner shall accept an audited financial report from an accountant chartered in Canada. If the insurer or health maintenance organization is domiciled in Great Britain, the commissioner shall accept an audited financial report from an accountant chartered in Great Britain.

(c)

A partner or other person responsible for rendering a report for an insurer or health maintenance organization for seven consecutive years may not, during the two-year period after that seventh year, render a report for the insurer or health maintenance organization or for a subsidiary or affiliate of the insurer or health maintenance organization that is engaged in the business of insurance. The commissioner may determine that the limitation provided by this subsection does not apply to an accountant for a particular insurer or health maintenance organization if the insurer or health maintenance organization demonstrates to the satisfaction of the commissioner that the limitation’s application to the insurer or health maintenance organization would be unfair because of unusual circumstances. In making the determination, the commissioner may consider:

(1)

the number of partners or individuals the accountant employs, the expertise of the partners or individuals the accountant employs, or the number of the accountant’s insurance clients;

(2)

the premium volume of the insurer or health maintenance organization; and

(3)

the number of jurisdictions in which the insurer or health maintenance organization engages in business.

(d)

The commissioner may not accept an audited financial report prepared wholly or partly by an individual or firm who the commissioner finds:

(1)

has been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act (18 U.S.C. Section 1961 et seq.), or a state or federal criminal offense involving dishonest conduct;

(2)

has violated the insurance laws of this state with respect to a report filed under this subchapter;

(3)

has demonstrated a pattern or practice of failing to detect or disclose material information in reports filed under this subchapter; or

(4)

has directly or indirectly entered into an agreement of indemnity or release of liability regarding an audit of an insurer.
Added by Acts 2005, 79th Leg., Ch. 727 (H.B. 2017), Sec. 1, eff. April 1, 2007.
Amended by:
Acts 2007, 80th Leg., R.S., Ch. 730 (H.B. 2636), Sec. 3B.002(a), eff. September 1, 2007.
Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 9.002(a), eff. September 1, 2007.

Source: Section 401.011 — Qualifications of Accountant; Acceptance of Audited Financial Report, https://statutes.­capitol.­texas.­gov/Docs/IN/htm/IN.­401.­htm#401.­011 (accessed Jun. 5, 2024).

401.001
Definitions 401.002
Purpose of Subchapter 401.003
Effect of Subchapter on Authority to Examine 401.004
Filing and Extensions for Filing of Audited Financial Report 401.005
Alternative Filing for Canadian or British Insurers or Health Maintenance Organizations 401.006
Exemption for Certain Small Insurers and Health Maintenance Organizations 401.007
Exemption for Certain Foreign or Alien Insurers or Health Maintenance Organizations 401.008
Hardship Exemption 401.009
Contents of Audited Financial Report 401.010
Requirements for Financial Statements in Audited Financial Report 401.011
Qualifications of Accountant 401.012
Hearing on Accountant Qualifications 401.013
Accountant’s Letter of Qualifications 401.014
Registration of Accountant 401.015
Resignation or Dismissal of Accountant 401.016
Audited Combined or Consolidated Financial Statements 401.017
Notice of Adverse Financial Condition or Misstatement of Financial Condition 401.018
Information Discovered After Date of Audited Financial Report 401.019
Report on Significant Deficiencies in Internal Control 401.020
Accountant Work Papers 401.021
Penalty for Failure to Comply 401.051
Duty to Examine Carriers 401.052
Frequency of Examination 401.053
Examination Period 401.054
Powers Related to Examination 401.055
Effect of Subchapter on Authority to Use Information 401.056
Rules Related to Reports and Hearings 401.057
Use of Audit and Work Papers 401.058
Confidentiality of Reports and Related Information 401.059
Determination of Value 401.060
Right to Information Relating to Determination of Value or Market Value 401.061
Disciplinary Action for Failure to Comply with Subchapter 401.062
Stay of Rule, Order, Decision, or Finding 401.101
Use of Department Examiner or Other Qualified Person or Firm 401.102
Legislative Intent as to Appointment or Employment of Examiners and Actuaries 401.103
Appointment of Examiners and Actuaries 401.104
Appointment of Examiners, Actuaries, and Other Persons for Certain Examinations 401.105
Oath of Examiners and Assistants 401.106
Right of Action on Bond 401.107
Registration of Contract Examiners 401.151
Expenses of Examination of Domestic Insurer 401.152
Expenses of Examination of Other Insurers 401.153
Reimbursement of Expenses of Certain Persons or Firms 401.154
Tax Credit Authorized 401.155
Additional Assessments 401.156
Deposit and Use of Assessment and Fee 401.201
Confidentiality of Early Warning System Information 401.251
Definitions 401.252
Self-directed Budget 401.253
Audits 401.254
Records 401.255
Membership in Employees Retirement System
Green check means up to date. Up to date

Accessed:
Jun. 5, 2024

§ 401.011’s source at texas​.gov