Texas 2011 - 82nd Regular

Texas Senate Bill SB644 Compare Versions

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1	1	By: Hegar S.B. No. 644
2	2	(In the Senate - Filed February 14, 2011; March 16, 2011,
3	3	read first time and referred to Committee on Government
4	4	Organization; March 28, 2011, reported adversely, with favorable
5	5	Committee Substitute by the following vote: Yeas 6, Nays 0;
6	6	March 28, 2011, sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 644 By: Hegar
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the continuation and operation of the Texas Department
13	13	of Insurance and the operation of certain insurance programs;
14	14	imposing administrative penalties.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	ARTICLE 1. GENERAL PROVISIONS
17	17	SECTION 1.001. Section 31.002, Insurance Code, is amended
18	18	to read as follows:
19	19	Sec. 31.002. DUTIES OF DEPARTMENT. In addition to the other
20	20	duties required of the Texas Department of Insurance, the
21	21	department shall:
22	22	(1) regulate the business of insurance in this state;
23	23	(2) administer the workers' compensation system of
24	24	this state as provided by Title 5, Labor Code; [and]
25	25	(3) ensure that this code and other laws regarding
26	26	insurance and insurance companies are executed;
27	27	(4) protect and ensure the fair treatment of
28	28	consumers; and
29	29	(5) ensure fair competition in the insurance industry
30	30	in order to foster a competitive market.
31	31	SECTION 1.002. Subsection (a), Section 31.004, Insurance
32	32	Code, is amended to read as follows:
33	33	(a) The Texas Department of Insurance is subject to Chapter
34	34	325, Government Code (Texas Sunset Act). Unless continued in
35	35	existence as provided by that chapter, the department is abolished
36	36	September 1, 2017 [2011].
37	37	SECTION 1.003. Subchapter B, Chapter 36, Insurance Code, is
38	38	amended by adding Section 36.110 to read as follows:
39	39	Sec. 36.110. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE
40	40	RESOLUTION POLICY. (a) The commissioner shall develop and
41	41	implement a policy to encourage the use of:
42	42	(1) negotiated rulemaking procedures under Chapter
43	43	2008, Government Code, for the adoption of department rules; and
44	44	(2) appropriate alternative dispute resolution
45	45	procedures under Chapter 2009, Government Code, to assist in the
46	46	resolution of internal and external disputes under the department's
47	47	jurisdiction.
48	48	(b) The department's procedures relating to alternative
49	49	dispute resolution must conform, to the extent possible, to any
50	50	model guidelines issued by the State Office of Administrative
51	51	Hearings for the use of alternative dispute resolution by state
52	52	agencies.
53	53	(c) The commissioner shall:
54	54	(1) coordinate the implementation of the policy
55	55	adopted under Subsection (a);
56	56	(2) provide training as needed to implement the
57	57	procedures for negotiated rulemaking or alternative dispute
58	58	resolution; and
59	59	(3) collect data concerning the effectiveness of those
60	60	procedures.
61	61	ARTICLE 2. CERTAIN ADVISORY BOARDS, COMMITTEES, AND COUNCILS AND
62	62	RELATED TECHNICAL CORRECTIONS
63	63	SECTION 2.001. Chapter 32, Insurance Code, is amended by
64	64	adding Subchapter E to read as follows:
65	65	SUBCHAPTER E. RULES REGARDING USE OF ADVISORY COMMITTEES
66	66	Sec. 32.151. RULEMAKING AUTHORITY. (a) The commissioner
67	67	shall adopt rules, in compliance with Section 39.003 of this code
68	68	and Chapter 2110, Government Code, regarding the purpose,
69	69	structure, and use of advisory committees by the commissioner, the
70	70	state fire marshal, or department staff, including rules governing
71	71	an advisory committee's:
72	72	(1) purpose, role, responsibility, and goals;
73	73	(2) size and quorum requirements;
74	74	(3) qualifications for membership, including
75	75	experience requirements and geographic representation;
76	76	(4) appointment procedures;
77	77	(5) terms of service;
78	78	(6) training requirements; and
79	79	(7) duration.
80	80	(b) An advisory committee must be structured and used to
81	81	advise the commissioner, the state fire marshal, or department
82	82	staff. An advisory committee may not be responsible for rulemaking
83	83	or policymaking.
84	84	Sec. 32.152. PERIODIC EVALUATION. The commissioner shall
85	85	by rule establish a process by which the department shall
86	86	periodically evaluate an advisory committee to ensure its continued
87	87	necessity. The department may retain or develop committees as
88	88	appropriate to meet changing needs.
89	89	Sec. 32.153. COMPLIANCE WITH OPEN MEETINGS ACT. A
90	90	department advisory committee must comply with Chapter 551,
91	91	Government Code.
92	92	SECTION 2.002. Section 843.441, Insurance Code, is
93	93	transferred to Subchapter L, Chapter 843, Insurance Code,
94	94	redesignated as Section 843.410, Insurance Code, and amended to
95	95	read as follows:
96	96	Sec. 843.410 [843.441]. ASSESSMENTS. (a) To provide
97	97	funds for the administrative expenses of the commissioner regarding
98	98	rehabilitation, liquidation, supervision, conservatorship, or
99	99	seizure [conservation] of a [an impaired] health maintenance
100	100	organization in this state that is placed under supervision or in
101	101	conservatorship under Chapter 441 or against which a delinquency
102	102	proceeding is commenced under Chapter 443 and that is found by the
103	103	commissioner to have insufficient funds to pay the total amount of
104	104	health care claims and the administrative[, including] expenses
105	105	incurred by the commissioner regarding the rehabilitation,
106	106	liquidation, supervision, conservatorship, or seizure, the
107	107	commissioner [acting as receiver or by a special deputy receiver,
108	108	the committee, at the commissioner's direction,] shall assess each
109	109	health maintenance organization in the proportion that the gross
110	110	premiums of the health maintenance organization that were written
111	111	in this state during the preceding calendar year bear to the
112	112	aggregate gross premiums that were written in this state by all
113	113	health maintenance organizations, as found [provided to the
114	114	committee by the commissioner] after review of annual statements
115	115	and other reports the commissioner considers necessary.
116	116	(b) [(c)] The commissioner may abate or defer an assessment
117	117	in whole or in part if, in the opinion of the commissioner, payment
118	118	of the assessment would endanger the ability of a health
119	119	maintenance organization to fulfill its contractual obligations.
120	120	If an assessment is abated or deferred in whole or in part, the
121	121	amount of the abatement or deferral may be assessed against the
122	122	remaining health maintenance organizations in a manner consistent
123	123	with the calculations made by the commissioner under Subsection (a)
124	124	[basis for assessments provided by the approved plan of operation].
125	125	(c) [(d)] The total of all assessments on a health
126	126	maintenance organization may not exceed one-fourth of one percent
127	127	of the health maintenance organization's gross premiums in any one
128	128	calendar year.
129	129	(d) [(e)] Notwithstanding any other provision of this
130	130	subchapter, funds derived from an assessment made under this
131	131	section may not be used for more than 180 consecutive days for the
132	132	expenses of administering the affairs of a [an impaired] health
133	133	maintenance organization the surplus of which is impaired and that
134	134	is [while] in supervision[, rehabilitation,] or conservatorship
135	135	[conservation for more than 150 days]. The commissioner
136	136	[committee] may extend the period during which the commissioner
137	137	[it] makes assessments for the administrative expenses [of an
138	138	impaired health maintenance organization as it considers
139	139	appropriate].
140	140	SECTION 2.003. Section 1660.004, Insurance Code, is amended
141	141	to read as follows:
142	142	Sec. 1660.004. GENERAL RULEMAKING. The commissioner may
143	143	adopt rules as necessary to implement this chapter[, including
144	144	rules requiring the implementation and provision of the technology
145	145	recommended by the advisory committee].
146	146	SECTION 2.004. Subsection (b), Section 1660.102, Insurance
147	147	Code, is amended to read as follows:
148	148	(b) The commissioner may consider [the] recommendations [of
149	149	the advisory committee] or any other information provided in
150	150	response to a department-issued request for information relating to
151	151	electronic data exchange, including identification card programs,
152	152	before adopting rules regarding:
153	153	(1) information to be included on the identification
154	154	cards;
155	155	(2) technology to be used to implement the
156	156	identification card pilot program; and
157	157	(3) confidentiality and accuracy of the information
158	158	required to be included on the identification cards.
159	159	SECTION 2.005. Subsection (a), Section 4001.009, Insurance
160	160	Code, is amended to read as follows:
161	161	(a) As referenced in Section 4001.003(9), a reference to an
162	162	agent in the following laws includes a subagent without regard to
163	163	whether a subagent is specifically mentioned:
164	164	(1) Chapters 281, 402, 421-423, 441, 444, 461-463,
165	165	[523,] 541-556, 558, 559, [702,] 703, 705, 821, 823-825, 827, 828,
166	166	844, 963, 1108, 1205-1208 [1205-1209], 1211, 1213, 1214
167	167	[1211-1214], 1352, 1353, 1357, 1358, 1360-1363, 1369, 1453-1455,
168	168	1503, 1550, 1801, 1803, 2151-2154, 2201-2203, 2205-2213, 3501,
169	169	3502, 4007, 4102, and 4201-4203;
170	170	(2) Chapter 403, excluding Section 403.002;
171	171	(3) Subchapter A, Chapter 491;
172	172	(4) Subchapter C, Chapter 521;
173	173	(5) Subchapter A, Chapter 557;
174	174	(6) Subchapter B, Chapter 805;
175	175	(7) Subchapters D, E, and F, Chapter 982;
176	176	(8) Subchapter D, Chapter 1103;
177	177	(9) Subchapters B, C, D, and E, Chapter 1204,
178	178	excluding Sections 1204.153 and 1204.154;
179	179	(10) Subchapter B, Chapter 1366;
180	180	(11) Subchapters B, C, and D, Chapter 1367, excluding
181	181	Section 1367.053(c);
182	182	(12) Subchapters A, C, D, E, F, H, and I, Chapter 1451;
183	183	(13) Subchapter B, Chapter 1452;
184	184	(14) Sections 551.004, 841.303, 982.001, 982.002,
185	185	982.004, 982.052, 982.102, 982.103, 982.104, 982.106, 982.107,
186	186	982.108, 982.110, 982.111, 982.112, and 1802.001; and
187	187	(15) Chapter 107, Occupations Code.
188	188	SECTION 2.006. Section 4102.005, Insurance Code, is amended
189	189	to read as follows:
190	190	Sec. 4102.005. CODE OF ETHICS. The commissioner[, with
191	191	guidance from the public insurance adjusters examination advisory
192	192	committee,] by rule shall adopt:
193	193	(1) a code of ethics for public insurance adjusters
194	194	that fosters the education of public insurance adjusters concerning
195	195	the ethical, legal, and business principles that should govern
196	196	their conduct;
197	197	(2) recommendations regarding the solicitation of the
198	198	adjustment of losses by public insurance adjusters; and
199	199	(3) any other principles of conduct or procedures that
200	200	the commissioner considers necessary and reasonable.
201	201	SECTION 2.007. Subsection (a), Section 2154.052,
202	202	Occupations Code, is amended to read as follows:
203	203	(a) The commissioner:
204	204	(1) shall administer this chapter through the state
205	205	fire marshal; and
206	206	(2) may issue rules to administer this chapter [in
207	207	compliance with Section 2154.054].
208	208	SECTION 2.008. The following laws are repealed:
209	209	(1) Subsection (d), Article 3.70-3D, Insurance Code,
210	210	as effective on appropriation in accordance with Section 5, Chapter
211	211	1457 (H.B. 3021), Acts of the 76th Legislature, Regular Session,
212	212	1999;
213	213	(2) Chapter 523, Insurance Code;
214	214	(3) Section 524.061, Insurance Code;
215	215	(4) the heading to Subchapter M, Chapter 843,
216	216	Insurance Code;
217	217	(5) Sections 843.435, 843.436, 843.437, 843.438,
218	218	843.439, and 843.440, Insurance Code;
219	219	(6) Chapter 1212, Insurance Code;
220	220	(7) Subdivision (2), Section 1660.002, Insurance
221	221	Code;
222	222	(8) Subchapter B, Chapter 1660, Insurance Code;
223	223	(9) Subsection (c), Section 1660.101, Insurance Code;
224	224	(10) Sections 4002.004, 4004.002, 4101.006, and
225	225	4102.059, Insurance Code;
226	226	(11) Subsections (c) and (d), Section 4201.003,
227	227	Insurance Code;
228	228	(12) Subchapter C, Chapter 6001, Insurance Code;
229	229	(13) Subchapter C, Chapter 6002, Insurance Code;
230	230	(14) Subchapter C, Chapter 6003, Insurance Code;
231	231	(15) Section 2154.054, Occupations Code; and
232	232	(16) Subsection (c), Section 2154.055, Occupations
233	233	Code.
234	234	SECTION 2.009. (a) The following boards, committees,
235	235	councils, and task forces are abolished on the effective date of
236	236	this Act:
237	237	(1) the consumer assistance program for health
238	238	maintenance organizations advisory committee;
239	239	(2) the executive committee of the market assistance
240	240	program for residential property insurance;
241	241	(3) the TexLink to Health Coverage Program task force;
242	242	(4) the Health Maintenance Organization Solvency
243	243	Surveillance Committee;
244	244	(5) the technical advisory committee on claims
245	245	processing;
246	246	(6) the technical advisory committee on electronic
247	247	data exchange;
248	248	(7) the examination of license applicants advisory
249	249	board;
250	250	(8) the advisory council on continuing education for
251	251	insurance agents;
252	252	(9) the insurance adjusters examination advisory
253	253	board;
254	254	(10) the public insurance adjusters examination
255	255	advisory committee;
256	256	(11) the utilization review agents advisory
257	257	committee;
258	258	(12) the fire extinguisher advisory council;
259	259	(13) the fire detection and alarm devices advisory
260	260	council;
261	261	(14) the fire protection advisory council; and
262	262	(15) the fireworks advisory council.
263	263	(b) All powers, duties, obligations, rights, contracts,
264	264	funds, records, and real or personal property of a board,
265	265	committee, council, or task force listed under Subsection (a) of
266	266	this section shall be transferred to the Texas Department of
267	267	Insurance not later than February 28, 2012.
268	268	SECTION 2.010. The changes in law made by this Act by
269	269	repealing Sections 523.003 and 843.439, Insurance Code, apply only
270	270	to a cause of action that accrues on or after the effective date of
271	271	this Act. A cause of action that accrues before the effective date
272	272	of this Act is governed by the law in effect immediately before that
273	273	date, and that law is continued in effect for that purpose.
274	274	ARTICLE 3. RATE REGULATION
275	275	SECTION 3.001. Section 2251.101, Insurance Code, is amended
276	276	to read as follows:
277	277	Sec. 2251.101. RATE FILINGS AND SUPPORTING INFORMATION.
278	278	(a) Except as provided by Subchapter D, for risks written in this
279	279	state, each insurer shall file with the commissioner all rates,
280	280	applicable rating manuals, supplementary rating information, and
281	281	additional information as required by the commissioner. An insurer
282	282	may use a rate filed under this subchapter on and after the date the
283	283	rate is filed.
284	284	(b) The commissioner by rule shall:
285	285	(1) determine the information required to be included
286	286	in the filing, including:
287	287	(A) [(1)] categories of supporting information
288	288	and supplementary rating information;
289	289	(B) [(2)] statistics or other information to
290	290	support the rates to be used by the insurer, including information
291	291	necessary to evidence that the computation of the rate does not
292	292	include disallowed expenses; and
293	293	(C) [(3)] information concerning policy fees,
294	294	service fees, and other fees that are charged or collected by the
295	295	insurer under Section 550.001 or 4005.003; and
296	296	(2) prescribe the process through which the department
297	297	requests supplementary rating information and supporting
298	298	information under this section, including:
299	299	(A) the number of times the department may make a
300	300	request for information; and
301	301	(B) the types of information the department may
302	302	request when reviewing a rate filing.
303	303	SECTION 3.002. Section 2251.103, Insurance Code, is amended
304	304	to read as follows:
305	305	Sec. 2251.103. COMMISSIONER ACTION CONCERNING [DISAPPROVAL
306	306	OF RATE IN] RATE FILING NOT YET IN EFFECT; HEARING AND ANALYSIS.
307	307	(a) Not later than the earlier of the date the rate takes effect or
308	308	the 30th day after the date a rate is filed with the department
309	309	under Section 2251.101, the [The] commissioner shall disapprove the
310	310	[a] rate if the commissioner determines that the rate [filing made
311	311	under this chapter] does not comply with the requirements of this
312	312	chapter [meet the standards established under Subchapter B].
313	313	(b) Except as provided by Subsection (c), if a rate has not
314	314	been disapproved by the commissioner before the expiration of the
315	315	30-day period described by Subsection (a), the rate is not
316	316	considered disapproved under this section.
317	317	(c) For good cause, the commissioner may, on the expiration
318	318	of the 30-day period described by Subsection (a), extend the period
319	319	for disapproval of a rate for one additional 30-day period. The
320	320	commissioner and the insurer may not by agreement extend the 30-day
321	321	period described by Subsection (a) or this subsection.
322	322	(d) If the commissioner disapproves a rate under this
323	323	section [filing], the commissioner shall issue an order specifying
324	324	in what respects the rate [filing] fails to meet the requirements of
325	325	this chapter.
326	326	(e) An insurer that files a rate that is disapproved under
327	327	this section [(c) The filer] is entitled to a hearing on written
328	328	request made to the commissioner not later than the 30th day after
329	329	the date the order disapproving the rate [filing] takes effect.
330	330	(f) The department shall track, compile, and routinely
331	331	analyze the factors that contribute to the disapproval of rates
332	332	under this section.
333	333	SECTION 3.003. Subchapter C, Chapter 2251, Insurance Code,
334	334	is amended by adding Section 2251.1031 to read as follows:
335	335	Sec. 2251.1031. REQUESTS FOR ADDITIONAL INFORMATION.
336	336	(a) If the department determines that the information filed by an
337	337	insurer under this subchapter or Subchapter D is incomplete or
338	338	otherwise deficient, the department may request additional
339	339	information from the insurer.
340	340	(b) If the department requests additional information from
341	341	the insurer during the 30-day period described by Section
342	342	2251.103(a) or 2251.153(a) or under a second 30-day period
343	343	described by Section 2251.103(c) or 2251.153(c), as applicable, the
344	344	time between the date the department submits the request to the
345	345	insurer and the date the department receives the information
346	346	requested is not included in the computation of the first 30-day
347	347	period or the second 30-day period, as applicable.
348	348	(c) For purposes of this section, the date of the
349	349	department's submission of a request for additional information is
350	350	the earlier of:
351	351	(1) the date of the department's electronic mailing or
352	352	documented telephone call relating to the request for additional
353	353	information; or
354	354	(2) the postmarked date on the department's letter
355	355	relating to the request for additional information.
356	356	(d) The department shall track, compile, and routinely
357	357	analyze the volume and content of requests for additional
358	358	information made under this section to ensure that all requests for
359	359	additional information are fair and reasonable.
360	360	SECTION 3.004. The heading to Section 2251.104, Insurance
361	361	Code, is amended to read as follows:
362	362	Sec. 2251.104. COMMISSIONER DISAPPROVAL OF RATE IN EFFECT;
363	363	HEARING.
364	364	SECTION 3.005. Section 2251.107, Insurance Code, is amended
365	365	to read as follows:
366	366	Sec. 2251.107. PUBLIC [INSPECTION OF] INFORMATION.
367	367	(a) Each filing made, and any supporting information filed, under
368	368	this chapter is open to public inspection as of the date of the
369	369	filing.
370	370	(b) Each year the department shall make available to the
371	371	public information concerning the department's general process and
372	372	methodology for rate review under this chapter, including factors
373	373	that contribute to the disapproval of a rate. Information provided
374	374	under this subsection must be general in nature and may not reveal
375	375	proprietary or trade secret information of any insurer.
376	376	SECTION 3.006. Section 2251.151, Insurance Code, is amended
377	377	by adding Subsections (c-1) and (f) and amending Subsection (e) to
378	378	read as follows:
379	379	(c-1) If the commissioner requires an insurer to file the
380	380	insurer's rates under this section, the commissioner shall
381	381	periodically assess whether the conditions described by Subsection
382	382	(a) continue to exist. If the commissioner determines that the
383	383	conditions no longer exist, the commissioner shall issue an order
384	384	excusing the insurer from filing the insurer's rates under this
385	385	section.
386	386	(e) If the commissioner requires an insurer to file the
387	387	insurer's rates under this section, the commissioner shall issue an
388	388	order specifying the commissioner's reasons for requiring the rate
389	389	filing and explaining any steps the insurer must take and any
390	390	conditions the insurer must meet in order to be excused from filing
391	391	the insurer's rates under this section. An affected insurer is
392	392	entitled to a hearing on written request made to the commissioner
393	393	not later than the 30th day after the date the order is issued.
394	394	(f) The commissioner by rule shall define:
395	395	(1) the financial conditions and rating practices that
396	396	may subject an insurer to this section under Subsection (a)(1); and
397	397	(2) the process by which the commissioner determines
398	398	that a statewide insurance emergency exists under Subsection
399	399	(a)(2).
400	400	SECTION 3.007. Section 2251.156, Insurance Code, is amended
401	401	to read as follows:
402	402	Sec. 2251.156. RATE FILING DISAPPROVAL BY COMMISSIONER;
403	403	HEARING. (a) If the commissioner disapproves a rate filing under
404	404	Section 2251.153(a)(2), the commissioner shall issue an order
405	405	disapproving the filing in accordance with Section 2251.103(d)
406	406	[2251.103(b)].
407	407	(b) An insurer whose rate filing is disapproved is entitled
408	408	to a hearing in accordance with Section 2251.103(e) [2251.103(c)].
409	409	(c) The department shall track precedents related to
410	410	disapprovals of rates under this subchapter to ensure uniform
411	411	application of rate standards by the department.
412	412	SECTION 3.008. Section 2254.003, Insurance Code, is amended
413	413	by amending Subsection (a) and adding Subsections (a-1), (a-2), and
414	414	(a-3) to read as follows:
415	415	(a) This section applies to a rate for personal automobile
416	416	insurance or residential property insurance filed on or after the
417	417	effective date of Chapter 206, Acts of the 78th Legislature,
418	418	Regular Session, 2003.
419	419	(a-1) If the department provides an insurer with formal
420	420	written notice that a rate is excessive or unfairly discriminatory,
421	421	then the insurer may file a new rate or take other corrective action
422	422	to substantially address the department's concerns. The new rate
423	423	or other corrective action must be filed on or before the 60th day
424	424	following the date of formal written notice. At the commissioner's
425	425	discretion, the commissioner may extend the deadline to file by an
426	426	additional 30 days. If the department accepts the new rate or other
427	427	corrective action, then the insurer shall, according to
428	428	commissioner order, refund or issue a premium discount directly to
429	429	each affected policyholder on the portion of the premium found to be
430	430	excessive or unfairly discriminatory, plus interest on that amount.
431	431	The interest rate to be paid on refunds or discounts under this
432	432	subsection is the sum of six percent and the prime rate for the
433	433	calendar year in which formal written notice is given. For purposes
434	434	of this subsection, the prime rate is the prime rate as published in
435	435	The Wall Street Journal for the first day of the calendar year that
436	436	is not a Saturday, Sunday, or legal holiday.
437	437	(a-2) If the insurer does not file or take, or the
438	438	department does not accept, a new rate or other corrective action as
439	439	provided under Subsection (a-1), and the commissioner issues an
440	440	order disapproving the rate as excessive or unfairly discriminatory
441	441	under Section 2251.104, then the insurer must refund or issue a
442	442	premium discount directly to each affected policyholder on the
443	443	portion of the premium found to be excessive or unfairly
444	444	discriminatory, plus interest on that amount. The interest rate to
445	445	be paid on refunds or discounts under this subsection is 18 percent.
446	446	An insurer is not required to pay any interest penalty if the
447	447	insurer prevails in an appeal of the commissioner's order under
448	448	Subchapter D, Chapter 36.
449	449	(a-3) The period for the refund and interest begins on the
450	450	date the department first provides the insurer with formal written
451	451	notice that the insurer's filed rate is excessive or unfairly
452	452	discriminatory, and interest continues to accrue until the refund
453	453	or discount is paid or issued.
454	454	SECTION 3.009. Section 2251.154, Insurance Code, is
455	455	repealed.
456	456	SECTION 3.010. Subsection (c), Section 2254.003, Insurance
457	457	Code, is repealed.
458	458	SECTION 3.011. Section 2251.103, Insurance Code, as amended
459	459	by this Act, and Section 2251.1031, Insurance Code, as added by this
460	460	Act, apply only to a rate filing made on or after the effective date
461	461	of this Act. A rate filing made before the effective date of this
462	462	Act is governed by the law in effect at the time the filing was made,
463	463	and that law is continued in effect for that purpose.
464	464	SECTION 3.012. Subsection (c-1), Section 2251.151,
465	465	Insurance Code, as added by this Act, applies to an insurer that is
466	466	required to file the insurer's rates for approval under Section
467	467	2251.151, Insurance Code, on or after the effective date of this
468	468	Act, regardless of when the order requiring the insurer to file the
469	469	insurer's rates for approval under that section is first issued.
470	470	SECTION 3.013. Subsection (e), Section 2251.151, Insurance
471	471	Code, as amended by this Act, applies only to an order issued by the
472	472	commissioner of insurance on or after the effective date of this
473	473	Act. An order of the commissioner issued before the effective date
474	474	of this Act is governed by the law in effect on the date the order
475	475	was issued, and that law is continued in effect for that purpose.
476	476	ARTICLE 4. STATE FIRE MARSHAL'S OFFICE
477	477	SECTION 4.001. Section 417.008, Government Code, is amended
478	478	by adding Subsection (f) to read as follows:
479	479	(f) The commissioner by rule shall prescribe a reasonable
480	480	fee for an inspection performed by the state fire marshal that may
481	481	be charged to a property owner or occupant who requests the
482	482	inspection, as the commissioner considers appropriate. In
483	483	prescribing the fee, the commissioner shall consider the overall
484	484	cost to the state fire marshal to perform the inspections,
485	485	including the approximate amount of time the staff of the state fire
486	486	marshal needs to perform an inspection, travel costs, and other
487	487	expenses.
488	488	SECTION 4.002. Section 417.0081, Government Code, is
489	489	amended to read as follows:
490	490	Sec. 417.0081. INSPECTION OF CERTAIN STATE-OWNED OR
491	491	STATE-LEASED BUILDINGS. (a) The state fire marshal, at the
492	492	commissioner's direction, shall periodically inspect public
493	493	buildings under the charge and control of the Texas Facilities
494	494	[General Services] Commission and buildings leased for the use of a
495	495	state agency by the Texas Facilities Commission.
496	496	(b) For the purpose of determining a schedule for conducting
497	497	inspections under this section, the commissioner by rule shall
498	498	adopt guidelines for assigning potential fire safety risk to
499	499	state-owned and state-leased buildings. Rules adopted under this
500	500	subsection must provide for the inspection of each state-owned and
501	501	state-leased building to which this section applies, regardless of
502	502	how low the potential fire safety risk of the building may be.
503	503	(c) On or before January 1 of each year, the state fire
504	504	marshal shall report to the governor, lieutenant governor, speaker
505	505	of the house of representatives, and appropriate standing
506	506	committees of the legislature regarding the state fire marshal's
507	507	findings in conducting inspections under this section.
508	508	SECTION 4.003. Section 417.0082, Government Code, is
509	509	amended to read as follows:
510	510	Sec. 417.0082. PROTECTION OF CERTAIN STATE-OWNED OR
511	511	STATE-LEASED BUILDINGS AGAINST FIRE HAZARDS. (a) The state fire
512	512	marshal, under the direction of the commissioner, shall take any
513	513	action necessary to protect a public building under the charge and
514	514	control of the Texas Facilities [Building and Procurement]
515	515	Commission, and the building's occupants, and the occupants of a
516	516	building leased for the use of a state agency by the Texas
517	517	Facilities Commission, against an existing or threatened fire
518	518	hazard. The state fire marshal and the Texas Facilities [Building
519	519	and Procurement] Commission shall include the State Office of Risk
520	520	Management in all communication concerning fire hazards.
521	521	(b) The commissioner, the Texas Facilities [Building and
522	522	Procurement] Commission, and the risk management board shall make
523	523	and each adopt by rule a memorandum of understanding that
524	524	coordinates the agency's duties under this section.
525	525	SECTION 4.004. Section 417.010, Government Code, is amended
526	526	to read as follows:
527	527	Sec. 417.010. DISCIPLINARY AND ENFORCEMENT ACTIONS;
528	528	ADMINISTRATIVE PENALTIES [ALTERNATE REMEDIES]. (a) This section
529	529	applies to each person and firm licensed, registered, or otherwise
530	530	regulated by the department through the state fire marshal,
531	531	including:
532	532	(1) a person regulated under Title 20, Insurance Code;
533	533	and
534	534	(2) a person licensed under Chapter 2154, Occupations
535	535	Code.
536	536	(b) The commissioner by rule shall delegate to the state
537	537	fire marshal the authority to take disciplinary and enforcement
538	538	actions, including the imposition of administrative penalties in
539	539	accordance with this section on a person regulated under a law
540	540	listed under Subsection (a) who violates that law or a rule or order
541	541	adopted under that law. In the rules adopted under this subsection,
542	542	the commissioner shall:
543	543	(1) specify which types of disciplinary and
544	544	enforcement actions are delegated to the state fire marshal; and
545	545	(2) outline the process through which the state fire
546	546	marshal may, subject to Subsection (e), impose administrative
547	547	penalties or take other disciplinary and enforcement actions.
548	548	(c) The commissioner by rule shall adopt a schedule of
549	549	administrative penalties for violations subject to a penalty under
550	550	this section to ensure that the amount of an administrative penalty
551	551	imposed is appropriate to the violation. The department shall
552	552	provide the administrative penalty schedule to the public on
553	553	request. The amount of an administrative penalty imposed under
554	554	this section must be based on:
555	555	(1) the seriousness of the violation, including:
556	556	(A) the nature, circumstances, extent, and
557	557	gravity of the violation; and
558	558	(B) the hazard or potential hazard created to the
559	559	health, safety, or economic welfare of the public;
560	560	(2) the economic harm to the public interest or public
561	561	confidence caused by the violation;
562	562	(3) the history of previous violations;
563	563	(4) the amount necessary to deter a future violation;
564	564	(5) efforts to correct the violation;
565	565	(6) whether the violation was intentional; and
566	566	(7) any other matter that justice may require.
567	567	(d) In [The state fire marshal, in] the enforcement of a law
568	568	that is enforced by or through the state fire marshal, the state
569	569	fire marshal may, in lieu of cancelling, revoking, or suspending a
570	570	license or certificate of registration, impose on the holder of the
571	571	license or certificate of registration an order directing the
572	572	holder to do one or more of the following:
573	573	(1) cease and desist from a specified activity;
574	574	(2) pay an administrative penalty imposed under this
575	575	section [remit to the commissioner within a specified time a
576	576	monetary forfeiture not to exceed $10,000 for each violation of an
577	577	applicable law or rule]; or [and]
578	578	(3) make restitution to a person harmed by the holder's
579	579	violation of an applicable law or rule.
580	580	(e) The state fire marshal shall impose an administrative
581	581	penalty under this section in the manner prescribed for imposition
582	582	of an administrative penalty under Subchapter B, Chapter 84,
583	583	Insurance Code. The state fire marshal may impose an
584	584	administrative penalty under this section without referring the
585	585	violation to the department for commissioner action.
586	586	(f) An affected person may dispute the imposition of the
587	587	penalty or the amount of the penalty imposed in the manner
588	588	prescribed by Subchapter C, Chapter 84, Insurance Code. Failure to
589	589	pay an administrative penalty imposed under this section is subject
590	590	to enforcement by the department.
591	591	ARTICLE 5. TITLE INSURANCE
592	592	SECTION 5.001. Subsection (c), Section 2703.153, Insurance
593	593	Code, is amended to read as follows:
594	594	(c) Not less frequently than once every five years, the
595	595	commissioner shall evaluate the information required under this
596	596	section to determine whether the department needs additional or
597	597	different information or no longer needs certain information to
598	598	promulgate rates. If the department requires a title insurance
599	599	company or title insurance agent to include new or different
600	600	information in the statistical report, that information may be
601	601	considered by the commissioner in fixing premium rates if the
602	602	information collected is reasonably credible for the purposes for
603	603	which the information is to be used.
604	604	ARTICLE 6. ELECTRONIC TRANSACTIONS
605	605	SECTION 6.001. Subtitle A, Title 2, Insurance Code, is
606	606	amended by adding Chapter 35 to read as follows:
607	607	CHAPTER 35. ELECTRONIC TRANSACTIONS
608	608	Sec. 35.001. DEFINITIONS. In this chapter:
609	609	(1) "Conduct business" includes engaging in or
610	610	transacting any business in which a regulated entity is authorized
611	611	to engage or is authorized to transact under the law of this state.
612	612	(2) "Regulated entity" means each insurer or other
613	613	organization regulated by the department, including:
614	614	(A) a domestic or foreign, stock or mutual, life,
615	615	health, or accident insurance company;
616	616	(B) a domestic or foreign, stock or mutual, fire
617	617	or casualty insurance company;
618	618	(C) a Mexican casualty company;
619	619	(D) a domestic or foreign Lloyd's plan;
620	620	(E) a domestic or foreign reciprocal or
621	621	interinsurance exchange;
622	622	(F) a domestic or foreign fraternal benefit
623	623	society;
624	624	(G) a domestic or foreign title insurance
625	625	company;
626	626	(H) an attorney's title insurance company;
627	627	(I) a stipulated premium company;
628	628	(J) a nonprofit legal service corporation;
629	629	(K) a health maintenance organization;
630	630	(L) a statewide mutual assessment company;
631	631	(M) a local mutual aid association;
632	632	(N) a local mutual burial association;
633	633	(O) an association exempt under Section 887.102;
634	634	(P) a nonprofit hospital, medical, or dental
635	635	service corporation, including a company subject to Chapter 842;
636	636	(Q) a county mutual insurance company; and
637	637	(R) a farm mutual insurance company.
638	638	Sec. 35.002. CONSTRUCTION WITH OTHER LAW.
639	639	(a) Notwithstanding any other provision of this code, a regulated
640	640	entity may conduct business electronically in accordance with this
641	641	chapter and the rules adopted under Section 35.004.
642	642	(b) To the extent of any conflict between another provision
643	643	of this code and a provision of this chapter, the provision of this
644	644	chapter controls.
645	645	Sec. 35.003. ELECTRONIC TRANSACTIONS AUTHORIZED. A
646	646	regulated entity may conduct business electronically to the same
647	647	extent that the entity is authorized to conduct business otherwise
648	648	if before the conduct of business each party to the business agrees
649	649	to conduct the business electronically.
650	650	Sec. 35.004. RULES. (a) The commissioner shall adopt
651	651	rules necessary to implement and enforce this chapter.
652	652	(b) The rules adopted by the commissioner under this section
653	653	must include rules that establish minimum standards with which a
654	654	regulated entity must comply in the entity's electronic conduct of
655	655	business with other regulated entities and consumers.
656	656	SECTION 6.002. Chapter 35, Insurance Code, as added by this
657	657	Act, applies only to business conducted on or after the effective
658	658	date of this Act. Business conducted before the effective date of
659	659	this Act is governed by the law in effect on the date the business
660	660	was conducted, and that law is continued in effect for that purpose.
661	661	ARTICLE 7. DATA COLLECTION
662	662	SECTION 7.001. Chapter 38, Insurance Code, is amended by
663	663	adding Subchapter I to read as follows:
664	664	SUBCHAPTER I. DATA COLLECTION RELATING TO
665	665	CERTAIN PERSONAL LINES OF INSURANCE
666	666	Sec. 38.401. APPLICABILITY OF SUBCHAPTER. This subchapter
667	667	applies only to an insurer who writes personal automobile insurance
668	668	or residential property insurance in this state.
669	669	Sec. 38.402. FILING OF CERTAIN CLAIMS INFORMATION.
670	670	(a) The commissioner shall require each insurer described by
671	671	Section 38.401 to file with the commissioner aggregate personal
672	672	automobile insurance and residential property insurance claims
673	673	information for the period covered by the filing, including the
674	674	number of claims:
675	675	(1) filed during the reporting period;
676	676	(2) pending on the last day of the reporting period,
677	677	including pending litigation;
678	678	(3) closed with payment during the reporting period;
679	679	(4) closed without payment during the reporting
680	680	period; and
681	681	(5) carrying over from the reporting period
682	682	immediately preceding the current reporting period.
683	683	(b) An insurer described by Section 38.401 must file the
684	684	information described by Subsection (a) on an annual basis. The
685	685	information filed must be broken down by quarter.
686	686	Sec. 38.403. PUBLIC INFORMATION. (a) The department shall
687	687	post the data contained in claims information filings under Section
688	688	38.402 on the department's Internet website. The commissioner by
689	689	rule may establish a procedure for posting data under this
690	690	subsection that includes a description of the data that must be
691	691	posted and the manner in which the data must be posted.
692	692	(b) Information provided under this section must be
693	693	aggregate data by line of insurance for each insurer and may not
694	694	reveal proprietary or trade secret information of any insurer.
695	695	Sec. 38.404. RULES. The commissioner may adopt rules
696	696	necessary to implement this subchapter.
697	697	ARTICLE 8. STUDY ON RATE FILING AND APPROVAL
698	698	REQUIREMENTS FOR CERTAIN INSURERS WRITING IN
699	699	UNDERSERVED AREAS; UNDERSERVED AREA DESIGNATION
700	700	SECTION 8.001. Section 2004.002, Insurance Code, is amended
701	701	by amending Subsection (b) and adding Subsections (c) and (d) to
702	702	read as follows:
703	703	(b) In determining which areas to designate as underserved,
704	704	the commissioner shall consider:
705	705	(1) whether residential property insurance is not
706	706	reasonably available to a substantial number of owners of insurable
707	707	property in the area; [and]
708	708	(2) whether access to the full range of coverages and
709	709	policy forms for residential property insurance does not reasonably
710	710	exist; and
711	711	(3) any other relevant factor as determined by the
712	712	commissioner.
713	713	(c) The commissioner shall determine which areas to
714	714	designate as underserved under this section not less than once
715	715	every six years.
716	716	(d) The commissioner shall conduct a study concerning the
717	717	accuracy of current designations of underserved areas under this
718	718	section for the purpose of increasing and improving access to
719	719	insurance in those areas not less than once every six years.
720	720	SECTION 8.002. Subchapter F, Chapter 2251, Insurance Code,
721	721	is amended by adding Section 2251.253 to read as follows:
722	722	Sec. 2251.253. REPORT. (a) The commissioner shall conduct
723	723	a study concerning the impact of increasing the percentage of the
724	724	total amount of premiums collected by insurers for residential
725	725	property insurance under Section 2251.252.
726	726	(b) The commissioner shall report the results of the study
727	727	in the biennial report required under Section 32.022.
728	728	(c) This section expires September 1, 2013.
729	729	ARTICLE 9. TRANSITION; EFFECTIVE DATE
730	730	SECTION 9.001. Except as otherwise provided by this Act,
731	731	this Act applies only to an insurance policy, contract, or evidence
732	732	of coverage that is delivered, issued for delivery, or renewed on or
733	733	after January 1, 2012. A policy, contract, or evidence of coverage
734	734	delivered, issued for delivery, or renewed before January 1, 2012,
735	735	is governed by the law as it existed immediately before the
736	736	effective date of this Act, and that law is continued in effect for
737	737	that purpose.
738	738	SECTION 9.002. This Act takes effect September 1, 2011.
739	739	* * * * *