By: Hegar S.B. No. 1291
(In the Senate - Filed March 8, 2011; March 16, 2011, read
first time and referred to Committee on Business and Commerce;
April 14, 2011, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 9, Nays 0; April 14, 2011,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 1291 By: Estes
A BILL TO BE ENTITLED
AN ACT
relating to the budget of certain divisions of the Texas Department
of Insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 401, Insurance Code, is amended by
adding Subchapter F to read as follows:
SUBCHAPTER F. SELF-DIRECTED BUDGET FOR CERTAIN DIVISIONS
Sec. 401.251. DEFINITIONS. In this subchapter:
(1) "Actuarial division" means the division within the
financial program that conducts actuarial examinations of insurers
and other entities regulated by the department and administers
state laws relating to the level of reserves required of an insurer.
(2) "Examination cost" means a cost associated with
salary, travel, or other personnel expenses associated with the
examination of insurers and other entities regulated by the
department by the financial examinations division or actuarial
division.
(3) "Financial examinations division" means the
division within the financial program that conducts financial and
market conduct examinations of insurers and other entities
regulated by the department.
(4) "Financial program" means the program within the
department through which the department regulates the financial and
operating conditions of, and issues licenses to, domestic and
foreign insurers and other entities regulated by the department.
Sec. 401.252. SELF-DIRECTED BUDGET. (a) The senior
associate commissioner of the financial program shall submit to the
commissioner an annual budget of examination costs using generally
accepted accounting principles. Notwithstanding any other
provision of law, the budget may be adopted and approved only by the
commissioner.
(b) The commissioner shall submit the budget to the
Legislative Budget Board for approval not later than July 1 of each
year. If the Legislative Budget Board does not object to the budget
in writing as provided by Subsection (c) before July 31 of the same
year, the commissioner shall approve the budget.
(c) If the Legislative Budget Board objects to the budget,
that board shall provide the commissioner with a written statement
describing changes to the budget that would result in the board not
objecting to the budget. The commissioner shall, not later than
August 31 of the year in which the budget was submitted to the
board, submit to the board a budget that conforms with this
statement.
(d) The financial program may not directly or indirectly
cause the Texas Department of Insurance operating account to incur
any examination cost.
(e) Subject to any limitations in this code or another
insurance law of this state, the department may set the amounts of
fees required or permitted by statute or rule as necessary to:
(1) carry out the functions of the financial
examinations and actuarial divisions relating to the examination of
insurers and other regulated entities; and
(2) fund the budget adopted and approved under
Subsection (b).
(f) Notwithstanding this section, the financial program may
receive funds appropriated from the state to fund costs other than
examination costs.
(g) An assessment, fee, charge, or other source of revenue
collected by the financial program relating to the examination of
insurers and other regulated entities by the financial examinations
division or actuarial division shall be deposited to the credit of
the account described by Section 401.156(a) for the purposes
described by that section.
Sec. 401.253. AUDITS. This subchapter does not affect the
duty of the state auditor to audit the financial program.
Sec. 401.254. RECORDS; REPORTING REQUIREMENTS. (a) The
financial program shall keep financial and statistical information
as necessary to disclose completely and accurately the financial
program's receipts and examination costs.
(b) The financial program shall submit to the commissioner
and the Legislative Budget Board an annual report that states:
(1) the revenue received by the financial program from
assessments and fees collected by the department relating to the
examination of insurers and other regulated entities;
(2) the total salary for each financial program
employee who performs examinations of insurers and other regulated
entities;
(3) the portion of the salary paid to each employee
from the self-directed budget approved under Section 401.252;
(4) the portion of the salary paid to each employee
from funds appropriated to the financial program by the state;
(5) the total travel expenses incurred by each
employee who performs examinations of insurers and other regulated
entities;
(6) the portion of travel expenses paid for each
employee from the self-directed budget approved under Section
401.252;
(7) the portion of travel expenses paid for each
employee from funds appropriated to the financial program by the
state; and
(8) all other examination costs of the financial
program.
Sec. 401.255. MEMBERSHIP IN EMPLOYEES RETIREMENT SYSTEM.
Employees of the actuarial division and financial examinations
division are members of the Employees Retirement System of Texas
under Chapter 812, Government Code, and the transition to a
self-directed budget as provided by this subchapter has no effect
on their membership or any benefits under that system.
SECTION 2. Subsection (d), Section 401.151, Insurance Code,
is amended to read as follows:
(d) In determining the amount of the assessment under
Subsection (c), the department:
(1) shall consider:
(A) the insurer's total annual premium receipts
or admitted assets, or both, that are not attributable to 90 percent
of pension plan contracts as defined by Section 818(a), Internal
Revenue Code of 1986; or
(B) the total amount of the insurer's insurance
in force; and
(2) may not consider insurance premiums for insurance
contracted for by a state or federal governmental entity to provide
welfare benefits to designated welfare recipients or contracted for
in accordance with or in furtherance of Title 2, Human Resources
Code, or the federal Social Security Act (42 U.S.C. Section 301 et
seq.).
SECTION 3. Section 401.156, Insurance Code, is amended to
read as follows:
Sec. 401.156. DEPOSIT AND USE OF ASSESSMENT AND FEE.
(a) The department shall deposit any assessments or fees [an
assessment or fee] collected under this subchapter relating to the
examination of insurers and other regulated entities by the
financial examinations division or actuarial division, as those
terms are defined by Section 401.251, to the credit of an account
with the Texas Treasury Safekeeping Trust Company to be used
exclusively to pay examination costs, as defined by Section 401.251
[the Texas Department of Insurance operating account]. Money
deposited under this subsection accumulates and may be disbursed to
the department in a manner consistent with Subchapter F.
(b) Revenue that is not related to the examination of
insurers or other regulated entities by the financial examinations
division or actuarial division shall be deposited to the credit of
the Texas Department of Insurance operating account [Money
deposited under this section shall be used to pay the salaries and
expenses of actuaries and examiners and all other expenses relating
to examinations of insurers].
(c) To the extent that another provision of law conflicts
with this section or a provision of this section, this section or
the provision of this section controls.
(d) The department may transfer funds between the account
described by Subsection (a) and the Texas Department of Insurance
operating account as necessary to ensure that funds are deposited
to the correct account and used for the correct purposes. This
subsection does not authorize a disbursement or transfer of funds
in a manner that is inconsistent with the purpose of Subchapter F.
SECTION 4. Section 651.005, Insurance Code, is amended to
read as follows:
Sec. 651.005. DEPOSIT AND USE OF FEES. (a) Except as
provided by Subsection (b), each [Each] fee collected under this
chapter:
(1) shall be deposited to the credit of the Texas
Department of Insurance operating account; and
(2) may be used by the department to enforce this
chapter.
(b) An assessment or fee associated with examination costs,
as defined by Section 401.251, shall be deposited to the account
described by Section 401.156(a).
SECTION 5. Section 843.154, Insurance Code, is amended by
amending Subsection (b) and adding Subsection (b-1) to read as
follows:
(b) Except for fees collected under Subsections (e) and (f),
fees [Fees] collected under this section shall be deposited to the
credit of the Texas Department of Insurance operating account.
(b-1) A fee collected under Subsection (e) or (f) shall be
deposited to the credit of the account described by Section
401.156(a).
SECTION 6. Section 4151.206, Insurance Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) The commissioner shall deposit a fee collected under
Subsection (a)(1) or (3) [this section] to the credit of the Texas
Department of Insurance operating account.
(c) The commissioner shall deposit a fee collected under
Subsection (a)(2) to the credit of the account described by Section
401.156(a).
SECTION 7. (a) To provide a reasonable period for the
financial program, as defined by Section 401.251, Insurance Code,
as added by this Act, to establish a self-directed budget, for the
one-year period following the effective date of this Act the Texas
Department of Insurance shall continue funding the financial
program within the department using money appropriated to the
department out of the general revenue fund and shall deposit to the
credit of the Texas Department of Insurance operating account all
revenue relating to the examination of insurers and other regulated
entities by the financial program. The department shall certify to
the comptroller of public accounts the amounts deposited to the
credit of the operating account under this subsection.
(b) On September 1, 2012, on a finding by the comptroller of
public accounts that amounts deposited to the credit of the Texas
Department of Insurance operating account under Subsection (a) of
this section are sufficient to fulfill the purposes of Subchapter
F, Chapter 401, Insurance Code, as added by this Act, the
comptroller shall transfer that amount to the credit of the account
described by Subsection (a), Section 401.156, Insurance Code, as
amended by this Act.
SECTION 8. This Act takes effect September 1, 2011.
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