H.B. No. 4341
AN ACT
relating to the regulation of discount health care programs by the
Texas Department of Insurance; providing penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 5, Insurance Code, is amended
by adding Chapter 562 to read as follows:
CHAPTER 562. UNFAIR METHODS OF COMPETITION AND
UNFAIR OR DECEPTIVE ACTS OR PRACTICES REGARDING
DISCOUNT HEALTH CARE PROGRAMS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 562.001. PURPOSE. The purpose of this chapter is to
regulate trade practices in the business of discount health care
programs by:
(1) defining or providing for the determination of
trade practices in this state that are unfair methods of
competition or unfair or deceptive acts or practices; and
(2) prohibiting those unfair or deceptive trade
practices.
Sec. 562.002. DEFINITIONS. In this chapter:
(1) "Advertisement, solicitation, or marketing
material" means material that is made, published, disseminated,
circulated, or placed before the public:
(A) in a newspaper, magazine, or other
publication;
(B) in a notice, circular, pamphlet, letter, or
poster;
(C) over a radio or television station;
(D) through the Internet;
(E) in a telephone sales script; or
(F) in any other manner.
(2) "Discount health care program" means a business
arrangement or contract in which an entity, in exchange for fees,
dues, charges, or other consideration, offers its members access to
discounts on health care services provided by health care
providers. The term does not include an insurance policy,
certificate of coverage, or other product otherwise regulated by
the department or a self-funded or self-insured employee benefit
plan.
(3) "Discount health care program operator" means a
person who, in exchange for fees, dues, charges, or other
consideration, operates a discount health care program and
contracts with providers, provider networks, or other discount
health care program operators to offer access to health care
services at a discount and determines the charge to members.
(4) "Health care services" includes physician care,
inpatient care, hospital surgical services, emergency services,
ambulance services, laboratory services, audiology services,
dental services, vision services, mental health services,
substance abuse services, chiropractic services, and podiatry
services, and the provision of medical equipment and supplies,
including prescription drugs.
(5) "Marketer" means a person who sells or
distributes, or offers to sell or distribute, a discount health
care program, including a private label entity that places its name
on and markets or distributes a discount health care program, but
does not operate a discount health care program.
(6) "Member" means a person who pays fees, dues,
charges, or other consideration for the right to participate in a
discount health care program.
(7) "Person" means an individual, corporation,
association, partnership, or other legal entity.
(8) "Program operator" means a discount health plan
program operator.
(9) "Provider" means a person who is licensed or
otherwise authorized to provide health care services in this state.
Sec. 562.003. VENUE FOR ACTIONS INVOLVING DEPARTMENT OR
COMMISSIONER. An action under this chapter in which the department
or commissioner is a party must be brought in a district court in
Travis County.
Sec. 562.004. APPLICABILITY. Except as otherwise provided
by this chapter, a program operator, including the operator of a
freestanding discount health care program or a discount health care
program marketed by an insurer or a health maintenance
organization, shall comply with this chapter.
Sec. 562.005. LIBERAL CONSTRUCTION. This chapter shall be
liberally construed and applied to promote the underlying purposes
as provided by Section 562.001.
[Sections 562.006-562.050 reserved for expansion]
SUBCHAPTER B. UNFAIR METHODS OF COMPETITION AND
UNFAIR OR DECEPTIVE ACTS OR PRACTICES DEFINED
Sec. 562.051. MISREPRESENTATION REGARDING DISCOUNT HEALTH
CARE PROGRAM. It is an unfair method of competition or an unfair or
deceptive act or practice in the business of discount health care
programs to:
(1) misrepresent the price range of discounts offered
by the discount health care program;
(2) misrepresent the size or location of the program's
network of providers;
(3) misrepresent the participation of a provider in
the program's network;
(4) suggest that a discount card offered through the
program is a federally approved Medicare prescription discount
card;
(5) use the term "insurance," except as:
(A) a disclaimer of any relationship between the
discount health care program and insurance; or
(B) a description of an insurance product
connected with a discount health care program; or
(6) use the term "health plan," "coverage," "copay,"
"copayments," "deductible," "preexisting conditions," "guaranteed
issue," "premium," "PPO," or "preferred provider organization," or
another similar term, in a manner that could reasonably mislead an
individual into believing that the discount health care program is
health insurance or provides coverage similar to health insurance.
Sec. 562.052. FALSE INFORMATION AND ADVERTISING. It is an
unfair method of competition or an unfair or deceptive act or
practice in the business of discount health care programs to make,
publish, disseminate, circulate, or place before the public or
directly or indirectly cause to be made, published, disseminated,
circulated, or placed before the public an advertisement,
solicitation, or marketing material containing an untrue,
deceptive, or misleading assertion, representation, or statement
regarding the discount health care program.
Sec. 562.053. FAILURE TO REGISTER OR RENEW REGISTRATION;
FALSE REGISTRATION OR RENEWAL STATEMENT. (a) It is an unfair
method of competition or an unfair or deceptive act or practice in
the business of discount health care programs to:
(1) fail to register or renew registration as required
under Chapter 7001; or
(2) with intent to deceive:
(A) file with the department a false statement in
connection with an application for registration as a program
operator under Chapter 7001; or
(B) file with the department a false statement in
connection with an application for renewal of a registration as a
program operator under Chapter 7001.
(b) The commissioner may impose on a person operating a
discount health care program for the person's failure to register
or renew registration as required under Chapter 7001 any remedy
that the commissioner is authorized to impose under Chapter 101 for
the unauthorized business of insurance.
Sec. 562.054. MISREPRESENTATION OF DISCOUNT HEALTH CARE
PROGRAMS. It is an unfair method of competition or an unfair or
deceptive act or practice in the business of discount health care
programs to misrepresent a discount health care program by:
(1) making an untrue statement of material fact;
(2) failing to state a material fact necessary to make
other statements made not misleading, considering the
circumstances under which the statements were made;
(3) making a statement in a manner that would mislead a
reasonably prudent person to a false conclusion of a material fact;
(4) making a material misstatement of law; or
(5) failing to disclose a matter required by law to be
disclosed, including failing to make an applicable disclosure
required by this code.
[Sections 562.055-562.100 reserved for expansion]
SUBCHAPTER C. REGULATION OF PRACTICES
Sec. 562.101. UNFAIR METHODS OF COMPETITION AND UNFAIR OR
DECEPTIVE ACTS OR PRACTICES PROHIBITED. A person may not engage in
this state in a trade practice that is defined in this chapter as or
determined under this chapter to be an unfair method of competition
or an unfair or deceptive act or practice in the business of
discount health care programs.
Sec. 562.102. PROHIBITED CONTENT OF CERTAIN DISCOUNT HEALTH
CARE PROGRAM ADVERTISING, SOLICITATION, OR MARKETING.
Notwithstanding any other provision of this code, it is unlawful
for a program operator or marketer to advertise, solicit, or market
a discount health care program containing the words "approved by
the Texas Department of Insurance" or words with a similar meaning.
Sec. 562.103. PROGRAM OPERATOR DUTIES. (a) A program
operator shall:
(1) provide a toll-free telephone number and Internet
website for members to obtain information about the discount health
care program and confirm or find providers currently participating
in the program; and
(2) remove a provider from the discount health care
program not later than the 30th day after the date the program
operator learns that the provider is no longer participating in the
program or has lost the authority to provide services or products.
(b) A program operator shall issue at least one membership
card to serve as proof of membership in the discount health care
program that must:
(1) contain a clear and conspicuous statement that the
discount health care program is not insurance; and
(2) if the discount health care program includes
discount prescription drug benefits, include:
(A) the name or logo of the entity administering
the prescription drug benefits;
(B) the international identification number
assigned by the American National Standards Institute for the
entity administering the prescription drug benefits;
(C) the group number applicable to the member;
and
(D) a telephone number to be used to contact an
appropriate person to obtain information relating to the
prescription drug benefits provided under the program.
(c) Not later than the 15th day after the date of
enrollment, a program operator shall issue at least one set of
disclosure materials describing the terms and conditions of the
discount health care program to each household in which a person is
a member, including a statement that:
(1) the discount health care program is not insurance,
with the word "not" capitalized;
(2) the member is required to pay the entire amount of
the discounted rate;
(3) the discount health care program does not
guarantee the quality of the services or products offered by
individual providers; and
(4) if the member remains dissatisfied after
completing the discount health care program's complaint system, the
member may contact the member's state insurance department.
(d) A program operator shall ensure that an application form
or other membership agreement:
(1) clearly and conspicuously discloses the duration
of membership and the amount of payments the member is obligated to
make for the membership; and
(2) contains a clear and conspicuous statement that
the discount health care program is not insurance.
(e) A program operator shall allow any member who cancels a
membership in the discount health care program not later than the
30th day after the date the person becomes a member to receive a
refund, not later than the 30th day after the date the program
operator receives a valid cancellation notice and returned
membership card, of all periodic membership charges paid by that
member to the program operator and the amount of any one-time
enrollment fee that exceeds $50.
(f) A program operator shall:
(1) maintain a surety bond, payable to the department
for the use and benefit of members in a manner prescribed by the
department, in the principal amount of $50,000, except that a
program operator that is an insurer that holds a certificate of
authority under Title 6 is not required to maintain the surety bond;
(2) maintain an agent for service of process in this
state; and
(3) establish and operate a fair and efficient
procedure for resolution of complaints regarding the availability
of contracted discounts or services or other matters relating to
the contractual obligations of the discount health care program to
its members.
Sec. 562.104. MARKETING OF PROGRAM. (a) A program operator
may market directly or contract with marketers for the distribution
of the program operator's discount health care programs.
(b) A program operator shall enter into a written contract
with a marketer before the marketer begins marketing, promoting,
selling, or distributing the program operator's discount health
care program. The contract must prohibit the marketer from using an
advertisement, solicitation, or other marketing material or a
discount card that has not been approved in advance and in writing
by the program operator.
(c) A program operator must approve in writing before their
use all advertisements, solicitations, or other marketing
materials and all discount cards used by marketers to market,
promote, sell, or distribute the discount health care program.
(d) Each advertisement, solicitation, or marketing material
of a discount health care program must clearly and conspicuously
state that the discount health care program is not insurance.
Sec. 562.105. CONTRACT REQUIREMENTS. (a) A program
operator shall contract, directly or indirectly, with a provider
offering discounted health care services or products under the
discount health care program. The written contract must contain
all of the following provisions:
(1) a description of the discounts to be provided to a
member;
(2) a provision prohibiting the provider from charging
a member more than the discounted rate agreed to in the written
agreement with the provider; and
(3) a provision requiring the provider to promptly
notify the program operator if the provider no longer participates
in the program or loses the authority to provide services or
products.
(b) The program operator may not charge or receive from a
provider any fee or other compensation for entering into the
agreement.
(c) If the program operator contracts with a network of
providers, the program operator shall obtain written assurance from
the network that:
(1) the network has a written agreement with each
network provider that includes a discounted rate that is applicable
to a program operator's discount health care program and contains
all of the terms described in Subsection (a); and
(2) the network is authorized to obligate the network
providers to provide services to members of the discount health
care program.
(d) The program operator shall require the network to:
(1) maintain and provide the program operator on a
monthly basis an up-to-date list of providers in the network; and
(2) promptly remove a provider from its network if the
provider no longer participates or loses the authority to provide
services or products.
(e) The program operator shall maintain a copy of each
written agreement the program operator has with a provider or a
network for at least two years following termination of the
agreement.
Sec. 561.106. SUBMISSION OF MATERIALS. If the commissioner
reasonably believes that a program operator or a marketer may not be
operating in compliance with this chapter, the commissioner by
order may require the program operator or the marketer to submit to
the commissioner any advertisement, solicitation, or marketing
material, disclosure material, discount card, agreement, or other
document requested by the commissioner.
[Sections 562.107-562.150 reserved for expansion]
SUBCHAPTER D. DETERMINATION OF UNFAIR METHODS OF COMPETITION AND
UNFAIR OR DECEPTIVE ACTS OR PRACTICES; ENFORCEMENT; SANCTIONS AND
PENALTIES
Sec. 562.151. EXAMINATION AND INVESTIGATION. The
department may examine and investigate the affairs of a person
engaged in the business of discount health care programs in this
state to determine whether the person:
(1) has or is engaged in an unfair method of
competition or unfair or deceptive act or practice prohibited by
this chapter; or
(2) has violated Subchapter B or C.
Sec. 562.152. STATEMENT OF CHARGES; NOTICE OF HEARING. (a)
When the department has reason to believe that a person engaged in
the business of discount health care programs in this state has
engaged or is engaging in this state in an unfair method of
competition or unfair or deceptive act or practice defined by
Subchapter B or has violated Subchapter B or C and that a proceeding
by the department regarding the charges is in the interest of the
public, the department shall issue and serve on the person:
(1) a statement of the charges; and
(2) a notice of the hearing on the charges, including
the time and place for the hearing.
(b) The department may not hold the hearing before the sixth
day after the date the notice required by Subsection (a)(2) is
served.
Sec. 562.153. HEARING. A person against whom charges are
made under Section 562.152 is entitled at the hearing on the charges
to have an opportunity to be heard and show cause why the department
should not issue an order requiring the person to cease and desist
from:
(1) performing the unfair method of competition or
unfair or deceptive act or practice described in the charges; or
(2) violating Subchapter B or C.
Sec. 562.154. HEARING PROCEDURES. (a) Nothing in this
chapter requires the observance of formal rules of pleading or
evidence at a hearing under this subchapter.
(b) At a hearing under this subchapter, the department, on a
showing of good cause, shall permit any person to intervene,
appear, and be heard by counsel or in person.
Sec. 562.155. RECORD OF HEARING. (a) At a hearing under
this subchapter, the department may, and at the request of a party
to the hearing shall, make a record of the proceedings and the
evidence presented at the hearing.
(b) If the department does not make a record and a person
seeks judicial review of the decision made at the hearing, the
department shall prepare a statement of the evidence and proceeding
for use on review.
Sec. 562.156. COMPLIANCE WITH SUBPOENA. (a) If a person
refuses to comply with a subpoena issued in connection with a
hearing under this subchapter or refuses to testify with respect to
a matter about which the person may be lawfully interrogated, on
application of the department, a district court in Travis County or
in the county in which the person resides may order the person to
comply with the subpoena or testify.
(b) A court may punish as contempt a person's failure to
obey an order under this section.
Sec. 562.157. DETERMINATION OF VIOLATION. After a hearing
under this subchapter to determine whether a person has engaged in
an unfair method of competition or unfair or deceptive act or
practice prohibited by this chapter, the department shall determine
whether:
(1) the method of competition or the act or practice
considered in the hearing is defined as:
(A) an unfair method of competition or deceptive
act or practice under Subchapter B; or
(B) a false, misleading, or deceptive act or
practice under Section 17.46, Business & Commerce Code; and
(2) the person against whom the charges were made
engaged in the method of competition or act or practice in violation
of:
(A) this chapter; or
(B) Subchapter E, Chapter 17, Business & Commerce
Code, as specified in Section 17.46, Business & Commerce Code.
Sec. 562.158. CEASE AND DESIST ORDER. On determining that a
person committed a violation described by Section 562.157 or
committed a violation of Subchapter B or C, the department shall:
(1) make written findings; and
(2) issue and serve on the person an order requiring
the person to cease and desist from engaging in the method of
competition or act or practice determined to be a violation or the
violation of Subchapter B or C, as applicable.
Sec. 562.159. MODIFICATION OR SETTING ASIDE OF ORDER. On
the notice and in the manner the department determines proper, the
department may modify or set aside wholly or partly a cease and
desist order issued under Section 562.158 at any time before a
petition appealing the order is filed in accordance with Subchapter
D, Chapter 36.
Sec. 562.160. ADMINISTRATIVE PENALTY FOR VIOLATION OF CEASE
AND DESIST ORDER. (a) A person who violates a cease and desist
order issued under Section 562.158 is subject to an administrative
penalty under Chapter 84.
(b) In determining whether a person has violated a cease and
desist order, the department shall consider the maintenance of
procedures reasonably adapted to ensure compliance with the order.
(c) An administrative penalty imposed under this section
may not exceed:
(1) $1,000 for each violation; or
(2) $5,000 for all violations.
(d) An order of the department imposing an administrative
penalty under this section applies only to a violation of the cease
and desist order committed before the date the order imposing the
penalty is issued.
Sec. 562.161. CIVIL PENALTY FOR VIOLATION OF CEASE AND
DESIST ORDER. (a) A person who is found by a court to have violated
a cease and desist order issued under Section 562.158 is liable to
the state for a penalty. The state may recover the penalty in a
civil action.
(b) The penalty may not exceed $50 unless the court finds
the violation to be wilful, in which case the penalty may not exceed
$500.
[Sections 562.162-562.200 reserved for expansion]
SUBCHAPTER E. ENFORCEMENT BY ATTORNEY GENERAL
Sec. 562.201. INJUNCTIVE RELIEF. (a) The attorney general
may bring an action under this section if the attorney general has
reason to believe that:
(1) a person engaged in the business of discount
health care programs in this state is engaging in, has engaged in,
or is about to engage in an act or practice defined as unlawful
under:
(A) this chapter; or
(B) Section 17.46, Business & Commerce Code; and
(2) the action is in the public interest.
(b) The attorney general may bring the action in the name of
the state to restrain by temporary or permanent injunction the
person's use of the method, act, or practice.
Sec. 562.202. VENUE FOR INJUNCTIVE ACTION. An action for an
injunction under this subchapter may be commenced in a district
court in:
(1) the county in which the person against whom the
action is brought:
(A) resides;
(B) has the person's principal place of business;
or
(C) is engaging in business;
(2) the county in which the transaction or a
substantial portion of the transaction occurred; or
(3) Travis County.
Sec. 562.203. ISSUANCE OF INJUNCTION. (a) The court may
issue an appropriate temporary or permanent injunction.
(b) The court shall issue the injunction without bond.
Sec. 562.204. CIVIL PENALTY. In addition to requesting a
temporary or permanent injunction under Section 562.201, the
attorney general may request a civil penalty of not more than
$20,000 for each violation on a finding by the court that the
defendant has engaged in or is engaging in an act or practice
defined as unlawful under this chapter or Section 17.46, Business &
Commerce Code.
Sec. 562.205. COMPENSATION OR RESTORATION. The court may
make an additional order or judgment as necessary to compensate an
identifiable person for actual damages or for restoration of money
or property that may have been acquired by means of an enjoined act
or practice.
Sec. 562.206. CIVIL PENALTY FOR VIOLATION OF INJUNCTION.
(a) A person who violates an injunction issued under this
subchapter is liable for and shall pay to the state a civil penalty
of not more than $10,000 for each violation.
(b) The attorney general may, in the name of the state,
petition the court for recovery of the civil penalty against the
person who violates the injunction.
(c) The court shall consider the maintenance of procedures
reasonably adapted to ensure compliance with the injunction in
determining whether a person has violated an injunction.
(d) The court issuing the injunction retains jurisdiction
and the cause is continued for the purpose of assessing a civil
penalty under this section.
Sec. 562.207. REMEDIES NOT EXCLUSIVE. The remedies
provided by this subchapter:
(1) are not exclusive; and
(2) are in addition to any other remedy or procedure
provided by another law or at common law.
[Sections 562.208-562.250 reserved for expansion]
SUBCHAPTER F. ASSURANCE OF VOLUNTARY COMPLIANCE
Sec. 562.251. ACCEPTANCE OF ASSURANCE. (a) In
administering this chapter, the department may accept assurance of
voluntary compliance from a person who is engaging in, has engaged
in, or is about to engage in an act or practice in violation of this
chapter or Section 17.46, Business & Commerce Code.
(b) The assurance must be in writing and be filed with the
department.
(c) The department may condition acceptance of an assurance
of voluntary compliance on the stipulation that the person offering
the assurance restore to a person in interest money that may have
been acquired by the act or practice described in Subsection (a).
Sec. 562.252. EFFECT OF ASSURANCE. (a) An assurance of
voluntary compliance is not an admission of a prior violation of
this chapter or Section 17.46, Business & Commerce Code.
(b) Unless an assurance of voluntary compliance is
rescinded by agreement, a subsequent failure to comply with the
assurance is prima facie evidence of a violation of this chapter or
Section 17.46, Business & Commerce Code.
Sec. 562.253. REOPENING. A matter closed by the filing of
an assurance of voluntary compliance may be reopened at any time.
[Sections 562.254-562.300 reserved for expansion]
SUBCHAPTER G. CONSTRUCTION OF CHAPTER WITH OTHER LAWS
Sec. 562.301. LIABILITY UNDER OTHER LAW. An order of the
department under this chapter, or an order by a court to enforce
that order, does not relieve or absolve a person affected by either
order from liability under another law of this state.
Sec. 562.302. POWERS IN ADDITION TO OTHER POWERS AUTHORIZED
BY LAW. The powers vested in the department and the commissioner by
this chapter are in addition to any other powers to enforce a
penalty, fine, or forfeiture authorized by law with respect to a
method of competition or act or practice defined as unfair or
deceptive.
Sec. 562.303. DOUBLE RECOVERY PROHIBITED. A person may not
recover damages and penalties for the same act or practice under
both this chapter and another law.
SECTION 2. The Insurance Code is amended by adding Title 21
to read as follows:
TITLE 21. DISCOUNT HEALTH CARE PROGRAMS
CHAPTER 7001. REGISTRATION OF DISCOUNT HEALTH CARE
PROGRAM OPERATORS
Sec. 7001.001. DEFINITIONS. In this chapter:
(1) "Discount health care program" means a business
arrangement or contract in which an entity, in exchange for fees,
dues, charges, or other consideration, offers its members access to
discounts on health care services provided by health care
providers. The term does not include an insurance policy,
certificate of coverage, or other product otherwise regulated by
the department or a self-funded or self-insured employee benefit
plan.
(2) "Discount health care program operator" means a
person who, in exchange for fees, dues, charges, or other
consideration, operates a discount health care program and
contracts with providers, provider networks, or other discount
health care program operators to offer access to health care
services at a discount and determines the charge to members.
(3) "Health care services" includes physician care,
inpatient care, hospital surgical services, emergency services,
ambulance services, laboratory services, audiology services,
dental services, vision services, mental health services,
substance abuse services, chiropractic services, and podiatry
services, and the provision of medical equipment and supplies,
including prescription drugs.
(4) "Marketer" means a person who sells or
distributes, or offers to sell or distribute, a discount health
care program, including a private label entity that places its name
on and markets or distributes a discount health care program, but
does not operate a discount health care program.
(5) "Member" means a person who pays fees, dues,
charges, or other consideration for the right to participate in a
discount health care program.
(6) "Program operator" means a discount health plan
program operator.
(7) "Provider" means a person who is licensed or
otherwise authorized to provide health care services in this state.
Sec. 7001.002. EXEMPTION. This chapter does not apply to a
program operator who is an insurer and who holds a certificate of
authority under Title 6.
Sec. 7001.003. RULES. The commissioner shall adopt rules
in the manner prescribed by Subchapter A, Chapter 36, as necessary
to implement this chapter.
Sec. 7001.004. REGISTRATION REQUIRED. A discount health
care program operator may not offer a discount health care program
in this state unless the program operator is registered with the
department.
Sec. 7001.005. APPLICATION FOR REGISTRATION AND RENEWAL OF
REGISTRATION. (a) An applicant for registration under this
chapter or an applicant for renewal of registration under this
chapter whose information has changed shall submit:
(1) a completed registration application on the form
prescribed by the department indicating the program operator's
name, physical address, and mailing address and its agent for
service of process;
(2) a list of names, addresses, official positions,
and biographical information of:
(A) the individuals responsible for conducting
the program operator's affairs, including:
(i) each member of the board of directors,
board of trustees, executive committee, or other governing board or
committee;
(ii) the officers of the program operator;
and
(iii) any contracted management company
personnel; and
(B) any person owning or having the right to
acquire 10 percent or more of the voting securities of the program
operator;
(3) a statement generally describing the applicant,
its facilities and personnel, and the health care services or
products for which a discount will be made available under its
discount health care programs;
(4) a list of the marketers authorized to sell or
distribute the program operator's programs under the program
operator's name, a list of the marketing entities authorized to
private label the program operator's programs, and other
information about the marketers and marketing entities considered
necessary by the commissioner; and
(5) a copy of the form of all contracts made or to be
made between the program operator and any providers or provider
networks regarding the provision of health care services or
products to members.
(b) After the initial registration, if the form of a
contract described by Subsection (a)(5) changes, the program
operator must file the modified contract form with the department
before it may be used.
(c) As part of the registration required under Subsection
(a), and annually thereafter, the program operator shall certify in
writing to the department that its programs comply with the
requirements of this chapter and Chapter 562.
Sec. 7001.006. FEES. A discount health care program
operator shall pay the department an initial registration fee of
$1,000 and an annual renewal fee in the amount set by the
commissioner not to exceed $500.
Sec. 7001.007. DEPOSIT IN OPERATING ACCOUNT. All fees
collected by the department under this chapter shall be deposited
to the credit of the Texas Department of Insurance operating
account.
Sec. 7001.008. CRIMINAL BACKGROUND CHECK. The department
may conduct a criminal background check on:
(1) the individuals responsible for conducting the
program operator's affairs;
(2) each member of the board of directors, board of
trustees, executive committee, or other governing board or
committee;
(3) the officers of the program operator;
(4) any contracted management company personnel; and
(5) any person owning or having the right to acquire 10
percent or more of the voting securities of the program operator.
Sec. 7001.009. ENFORCEMENT. (a) The department may deny a
registration application or take any action authorized under
Chapters 82, 83, and 84 if the department determines that the
applicant or registered discount health care program operator,
individually or through an officer, director, or shareholder:
(1) has wilfully violated a provision of this code or
an order or rule of the commissioner;
(2) has intentionally made a material misstatement in
the registration application;
(3) has obtained or attempted to obtain a registration
by fraud or misrepresentation;
(4) has misappropriated, converted to the applicant's
or registration holder's own use, or illegally withheld money
belonging to a member of a discount health care program;
(5) has engaged in fraudulent or dishonest acts or
practices; or
(6) has been convicted of a felony.
(b) Chapter 2001, Government Code, applies to an action
taken under this section.
SECTION 3. Chapter 76, Health and Safety Code, is repealed.
SECTION 4. Not later than January 1, 2010, the commissioner
of insurance shall adopt the rules and procedures necessary to
implement Chapter 7001, Insurance Code, as added by this Act.
SECTION 5. (a) Notwithstanding Section 7001.004,
Insurance Code, as added by this Act, a person is not required to
register under that section before April 1, 2010, except as
provided by Subsection (b) of this section.
(b) A program operator that is registered with the Texas
Department of Licensing and Regulation on January 1, 2010, as
required by Chapter 76, Health and Safety Code, shall file an
application for renewal of registration with the Texas Department
of Insurance under Chapter 7001, Insurance Code, not later than
April 1, 2010.
SECTION 6. (a) Except as provided by Subsections (b) and
(c) of this section, this Act takes effect September 1, 2009.
(b) Section 3 of this Act takes effect April 1, 2010.
(c) Subchapter E, Chapter 562, Insurance Code, as added by
this Act, takes effect April 1, 2010.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4341 was passed by the House on May 6,
2009, by the following vote: Yeas 143, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 4341 on May 23, 2009, by the following vote: Yeas 141, Nays 0,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4341 was passed by the Senate, with
amendments, on May 19, 2009, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor