Texas 2009 - 81st Regular

Texas House Bill HB4217 Compare Versions

Only one version of the bill is available at this time.

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1	1	By: Farabee H.B. No. 4217
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	Relating to the establishment of the Texas Individual Health
7	7	Insurance Association and to the efficient operation of that system
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle ______, Title ______, Insurance code,
10	10	is amended by adding Chapter ______ to read as follows: CHAPTER
11	11	______ Texas Individual Health Insurance Association.
12	12	Sec. ______. DEFINITIONS
13	13	In this chapter:
14	14	(1) "Association" means the Texas Individual Health
15	15	Insurance Association.
16	16	(2) "Authorized insurer" means an insurer authorized by the
17	17	Texas Department of Insurance to write individual health coverage
18	18	under this title.
19	19	(3) "Insurance" means an insurance policy that meets the
20	20	requirements of Chapter ______, Insurance Code.
21	21	Sec. ______. NATURE AND COMPOSITION OF ASSOCIATION.
22	22	(a) The Texas Healthy Individual Insurance Association is a
23	23	nonprofit corporate body composed of all authorized insurers.
24	24	(b) Each authorized insurer must be a member of the
25	25	association as a condition of the insurer's authority to write
26	26	individual health insurance in this state
27	27	Sec. ______. GOVERNANCE OF THE ASSOCIATION:
28	28	(a) the association is administered by a governing
29	29	committee under a plan of operation.
30	30	(b) The governing committee of the Association is composed
31	31	of 12 members appointed by the Texas Commissioner of Insurance to be
32	32	selected as follows:
33	33	(1) six members who represent the interests of insurers,
34	34	elected by the association members according to a method the
35	35	members determine;
36	36	(2) four public members selected by the commissioner; and
37	37	(3) two members who are Texas health insurance agents
38	38	(c) To be eligible to serve on the governing committee as a
39	39	representative of insurers, an individual must be a full-time
40	40	employee of or contractor with an authorized insurer.
41	41	(d) An individual may not serve on the governing committee
42	42	as a public member if the individual, another individual related to
43	43	that individual within the second degree by consanguinity or
44	44	affinity, or another individual residing in the same household with
45	45	that individual:
46	46	(1) is required to be registered or licensed under this code
47	47	or another insurance law of this state;
48	48	(2) is employed by or acts as a consultant to a person
49	49	required to be registered or licensed or required to hold a
50	50	certificate of authority under this code or another insurance law
51	51	of this state;
52	52	(3) is the owner of, has a financial interest in, or
53	53	participates in the management of an organization required to be
54	54	registered or licensed or required to hold a certificate of
55	55	authority under this code or another insurance law of this state;
56	56	(4) is an officer, employer, or consultant of an association
57	57	in the field of insurance; or
58	58	(5) is required to register as a lobbyist under Chapter 305,
59	59	Government Code.
60	60	Sec. ______. IMMUNITY FROM LIABILITY
61	61	(a) The association, a member of the governing committee, or
62	62	an employee of the association is not personally liable for:
63	63	(1) an act performed in good faith within the scope of the
64	64	person's authority as determined under this chapter or the plan of
65	65	operation; or
66	66	(2) damages occasioned by the person's official act or
67	67	omission except an act or omission that is corrupt or malicious.
68	68	(b) The association shall provide counsel to defend an
69	69	action brought against a member of the governing committee or an
70	70	employee because of the person's official act or omission
71	71	regardless of whether the person has terminated service with the
72	72	association when the action is instituted.
73	73	(c) This section is cumulative of and does not affect or
74	74	modify a common law or statutory privilege of the association or it
75	75	governing committee.
76	76	Sec. ______. POWERS AND DUTIES OF ASSOCIATION
77	77	The association has the powers granted to a nonprofit
78	78	corporation under the Business Organizations Code.
79	79	Sec. ______. ASSIGNMENT OF INSURANCE; ELIGIBILITY.
80	80	(a) The association shall provide for the assignment of
81	81	insurance to an authorized insurer. Such assignment will be made to
82	82	carriers in proportion to each insurer's percentage of premium of
83	83	the individual health market for
84	84	(b) An applicant is not eligible for insurance assignment
85	85	through the association unless the applicant and the health agent
86	86	certify as part of the application to the association that the
87	87	applicant has been rejected for insurance by at least two insurers
88	88	that are authorized to engage in business in this state and that are
89	89	writing individual health insurance in this state. the last
90	90	calendar year.
91	91	(c) The assigned risk will be administered by the assigned
92	92	insurer.
93	93	(d) Assignment of risks to the members of the Association
94	94	shall be made on a guaranteed issue basis.
95	95	Sec. ______. ASSESSMENTS FOR OPERATIONS EXPENSES.
96	96	(a) The association may assess authorized insurers to
97	97	provide money to operate the association.
98	98	(b) The amount assessed against an authorized insurer must
99	99	be in proportion to the insurer's writing of automobile liability
100	100	insurance in this state.
101	101	(c) The association may bring an action to collect an
102	102	assessment against an authorized insurer that does not pay the
103	103	assessment within a reasonable time. In addition, the association
104	104	may report an authorized insurer's failure to pay the assessment to
105	105	the commissioner. The commissioner may institute a disciplinary
106	106	action against the insurer for failure to pay the assessment.
107	107	Sec. ______. PLAN OF OPERATION
108	108	(a) The Association shall be administered in compliance
109	109	with the plan of operation of the Association.
110	110	(b) The plan of operation must provide for the efficient,
111	111	economical, fair, and nondiscriminatory administration of the
112	112	association; and provide a means by which insurance may be
113	113	provided.
114	114	(c) Subject to the commissioner's approval, the governing
115	115	committee may amend the plan of operation. If the commissioner at
116	116	any time believes that any part of the plan of operation is
117	117	inconsistent with the purposes of this Chapter, the commissioner
118	118	shall notify the governing committee in writing so that the
119	119	governing committee may take corrective action.
120	120	(d) The Plan of Operation shall be effective upon approval
121	121	of the Commissioner.
122	122	(e) The Association shall be subject to the Open Meetings
123	123	Act and the Open Records Act.
124	124	Sec. ______. REINSURANCE
125	125	(a) The Association will also operate as a reinsurance
126	126	system, and insurers assigned a risk under this chapter may
127	127	reinsure such risk with the Association if notice of such
128	128	reinsurance is given to the Association within thirty days of the
129	129	assignment of the risk to the insurer.
130	130	(b) Reinsurance retention levels and premiums shall be set
131	131	by the Governing Board of the Association and shall be set in
132	132	accordance with sound actuarial science, and such matters will be
133	133	set forth in full in the plan of operation.
134	134	Sec. ______. PAYMENT OF EXCESS REINSURANCE LOSSES; PREMIUM
135	135	TAX CREDIT.
136	136	(a) Should there be a deficit for a calendar year caused by
137	137	the reinsurance losses greater than reinsurance premiums and
138	138	expenses of operation, carriers will be assessed during the
139	139	following year for this deficit in proportion to their individual
140	140	health premiums participation in the Association for the year in
141	141	which the deficit occurred in accordance with (b).
142	142	(b) The first $25 million shall be assessed against the
143	143	members of the association as stated above; the losses in excess of
144	144	$25 million shall be paid from reserve trust fund established by the
145	145	plan of operation and collected by fee on each policy assigned by
146	146	the plan and from any reinsurance program established by the
147	147	association; and any greater losses will be paid by an assessment of
148	148	the members of the association in the same proportion as set forth
149	149	in (a) above; and insurers may credit an amount paid in accordance
150	150	with this final portion of the assessment against the insurer's
151	151	premium tax. The tax credit authorized herein shall be allowed at a
152	152	rate not to exceed 20 percent per year for five or more successive
153	153	years beginning the calendar year that the assessments under this
154	154	section are paid.
155	155	Sec. ______. The Commissioner may adopt rules necessary to
156	156	implement this chapter.
157	157	SECTION 2
158	158	Effective January 1, 2010.