82R11615 TRH-F
By: Deuell S.B. No. 1855
A BILL TO BE ENTITLED
AN ACT
relating to the authority of certain foreign insurers to engage in
the business of health and accident insurance in this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 982.113, Insurance Code, is amended by
adding Subsections (c-1), (c-2), (c-3), and (e) to read as follows:
(c-1) Notwithstanding Subsections (a)-(c), the
commissioner may waive any requirement for the issuance of a
certificate of authority and issue to a foreign health and accident
insurance company a certificate of authority to engage in the
business of health and accident insurance in this state if:
(1) the company holds a license, certificate of
authority, or similar authorization issued by another state to
engage in the health and accident insurance business in that state;
(2) the state that issued the license, certificate of
authority, or similar authorization to the company has licensing,
certification, or authorization requirements, including financial
solvency requirements, that are substantially equivalent to the
requirements of this subchapter;
(3) the company maintains risk-based capital in an
amount of at least 300 percent of the company action level and trend
test level most recently established by the National Association of
Insurance Commissioners before the issuance of the certificate of
authority under this section; and
(4) the company's operational history demonstrates
that the expanded operation of the company in this state, or the
company's operations outside this state, will not create a
condition that might be hazardous to the company's policyholders or
creditors or the public.
(c-2) Except as provided by Subsection (c-3), if a foreign
health and accident insurance company holding a certificate of
authority issued under Subsection (c-1) attains a market share of
more than three percent of the accident and health insurance market
in this state, including the company's affiliated companies or
group, the commissioner shall require the company to:
(1) obtain a certificate of authority under Subsection
(b); or
(2) cease issuing new health and accident insurance
business in this state.
(c-3) The commissioner may waive the requirements of
Subsection (c-2) if the commissioner determines that a foreign
health and accident insurance company meets a minimum loss ratio
standard, as determined by commissioner rule.
(e) The commissioner may adopt rules as necessary to
implement this section.
SECTION 2. Subchapter C, Chapter 982, Insurance Code, is
amended by adding Section 982.1131 to read as follows:
Sec. 982.1131. APPLICABILITY OF OTHER LAWS. (a) Except as
provided by this section, a foreign insurance company that holds a
certificate of authority issued under Section 982.113(c-1) is
subject to this code in the same manner as a company that holds a
certificate of authority issued under Section 982.113(b).
(b) Sections 1507.007 and 1507.057 do not apply to a foreign
insurance company that holds a certificate of authority under
Section 982.113(c-1).
(c) A foreign insurance company that holds a certificate of
authority issued under Section 982.113(c-1) may petition the
commissioner for an exemption from a provision of Title 8 or 9 or a
related regulation. The commissioner for good cause shown may
exempt some or all of the company's insurance products from the
application of the provision or regulation. In determining whether
good cause exists, the commissioner shall consider:
(1) the availability of other coverage in this state;
(2) the level of fair competition among insurance
companies in this state; and
(3) irreconcilable differences between the insurance
laws or regulations of the company's home state and the insurance
laws or regulations of this state.
(d) The commissioner may adopt rules relating to the
determination of whether good cause exists to exempt a foreign
health and accident insurance company from a provision of this code
or a related regulation.
(e) The commissioner may enter into an agreement with the
equivalent agency of another state regarding the provisions of law
or regulations that will apply in this state to the business of a
foreign accident and health insurance company holding a certificate
of authority issued under Section 982.113(c-1).
(f) A foreign health and accident insurance company that
holds a certificate of authority under Section 982.113(c-1) that
issues a policy or certificate of accident or health insurance that
covers at the time of issuance a resident of this state and that
does not contain a state-mandated health benefit, as defined by
Section 1507.003, or that has been exempted from a requirement of
this code by the commissioner under Subsection (d), shall include:
(1) on the first page of an application to be
completed, the following statement, or a similar statement approved
by the commissioner, in boldface type: "This coverage is offered by
a non-Texas insurer which may be exempt from some Texas insurance
laws, including some consumer protection requirements. The
coverage may provide fewer health plan benefits than those normally
included in Texas policies."; and
(2) in any policy or certificate issued directly or
indirectly to a resident of this state, on the first or second page:
(A) the following statement, or a similar
statement approved by the commissioner, in boldface type: "This
coverage is provided by a non-Texas insurer which may be exempt from
some Texas insurance laws, including some consumer protection
requirements."; and
(B) a description of any statutory or regulatory
requirements from which the policy is exempt under this section.
SECTION 3. Section 101.053(b), Insurance Code, is amended
to read as follows:
(b) Sections 101.051 and 101.052 do not apply to:
(1) the lawful transaction of surplus lines insurance
under Chapter 981;
(2) the lawful transaction of reinsurance by insurers;
(3) a transaction in this state that:
(A) involves a policy that:
(i) is lawfully solicited, written, and
delivered outside this state; and
(ii) covers, at the time the policy is
issued, only subjects of insurance that are not resident, located,
or expressly to be performed in this state; and
(B) takes place after the policy is issued;
(4) a transaction:
(A) that involves an insurance contract
independently procured by the insured from an insurance company not
authorized to do insurance business in this state through
negotiations occurring entirely outside this state;
(B) that is reported; and
(C) on which premium tax is paid in accordance
with Chapter 226;
(5) a transaction in this state that:
(A) involves group life, health, or accident
insurance, other than credit insurance, and group annuities in
which the master policy for the group was lawfully issued and
delivered to an employer or to the trustee of a fund established by
an employer or a labor union in a state in which the insurer or
person was authorized to do insurance business; and
(B) is authorized by a statute of this state;
(6) an activity in this state by or on the sole behalf
of a nonadmitted captive insurance company that insures solely:
(A) directors' and officers' liability insurance
for the directors and officers of the company's parent and
affiliated companies;
(B) the risks of the company's parent and
affiliated companies; or
(C) both the individuals and entities described
by Paragraphs (A) and (B);
(7) the issuance of a qualified charitable gift
annuity under Chapter 102; or
(8) a lawful transaction by a servicing company of the
Texas workers' compensation employers' rejected risk fund under
Section 4.08, Article 5.76-2, as that article existed before its
repeal.
SECTION 4. Section 1507.007, Insurance Code, is amended to
read as follows:
Sec. 1507.007. ADDITIONAL POLICIES. (a) A health carrier
that offers one or more standard health benefit plans under this
subchapter must also offer at least one accident or sickness
insurance policy that provides state-mandated health benefits and
is otherwise authorized by this code.
(b) This section does not apply to a foreign accident and
health insurance company that holds a certificate of authority
issued under Section 982.113(c-1).
SECTION 5. The changes in law made by this Act apply
beginning on September 1, 2012.
SECTION 6. This Act takes effect September 1, 2011.