Texas 2017 - 85th Regular

Texas House Bill HB3343 Compare Versions

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

Old	New	Differences
1	1	85R6542 PMO-F
2	2	By: Paul H.B. No. 3343
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	relating to the suspension and reactivation of the operation of the
7	7	Texas Health Reinsurance System.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 1501.302, Insurance Code, is amended to
10	10	read as follows:
11	11	Sec. 1501.302. TEXAS HEALTH REINSURANCE SYSTEM. (a) The
12	12	Texas Health Reinsurance System is a nonprofit entity administered
13	13	by a board of directors and subject to the supervision and control
14	14	of the commissioner.
15	15	(b) The system may operate only during the period an order
16	16	authorizing operation of the system under Section 1501.3021 is in
17	17	effect. The system may not operate after the effective date of an
18	18	order of suspension of operation of the system under Section
19	19	1501.3022 until a subsequent order authorizing the operation of the
20	20	system under Section 1501.3021, if any, is effective.
21	21	SECTION 2. Subchapter G, Chapter 1501, Insurance Code, is
22	22	amended by adding Sections 1501.3021 and 1501.3022 to read as
23	23	follows:
24	24	Sec. 1501.3021. AUTHORIZATION OF OPERATION. (a) The
25	25	commissioner shall hold a hearing if:
26	26	(1) the commissioner believes small employer health
27	27	benefit plan issuers in this state are threatened with the
28	28	inability to secure reinsurance coverage in the open market; or
29	29	(2) the commissioner receives a petition requesting
30	30	the hearing from an association of health benefit plan issuers in
31	31	this state or a group of at least 15 small employer health benefit
32	32	plan issuers operating in this state.
33	33	(b) If, after a hearing under Subsection (a), the
34	34	commissioner finds that the operation of the system is in the public
35	35	interest, the commissioner by order shall:
36	36	(1) authorize the operation of the system;
37	37	(2) appoint a board of directors under Section
38	38	1501.303; and
39	39	(3) direct the board to develop a plan of operation
40	40	under Section 1501.306 to ensure the system is fully implemented on
41	41	a date specified in the order that is not later than the 60th day
42	42	after the effective date of the order.
43	43	(c) Sections 1501.307-1501.326 apply to the operation of
44	44	the system after the date the system is implemented as described by
45	45	Subsection (b)(3).
46	46	Sec. 1501.3022. SUSPENSION OF OPERATION. (a) The
47	47	commissioner shall hold a hearing if the system is operating or is
48	48	authorized to operate and:
49	49	(1) the commissioner believes small employer health
50	50	benefit plan issuers in this state are not threatened with the
51	51	inability to secure reinsurance coverage in the open market; or
52	52	(2) the commissioner receives a petition requesting
53	53	the hearing from an association of health benefit plan issuers in
54	54	this state or a group of at least 15 small employer health benefit
55	55	plan issuers operating in this state.
56	56	(b) If, after a hearing under Subsection (a), the
57	57	commissioner finds that suspension of the operation of the system
58	58	is in the public interest, the commissioner by order shall direct
59	59	the board to submit to the commissioner for approval, not later than
60	60	the 60th day after the date of the order, a plan of suspension of
61	61	operation of the system.
62	62	(c) A plan of suspension under Subsection (b) must:
63	63	(1) specify the date after which a health benefit plan
64	64	issuer that is a risk-assuming health benefit plan issuer on the
65	65	effective date of the plan of suspension may not:
66	66	(A) become a reinsured health benefit plan issuer
67	67	under Sections 1501.310, 1501.311, and 1501.312; and
68	68	(B) reinsure with the system a small employer
69	69	group, or any risk, covered under any small employer health benefit
70	70	plan;
71	71	(2) specify the date after which a health benefit plan
72	72	issuer that is a reinsured health benefit plan issuer on the
73	73	effective date of the plan of suspension may not:
74	74	(A) reinsure with the system additional small
75	75	employer groups in accordance with Section 1501.314; or
76	76	(B) cede additional eligible lives to the system
77	77	in accordance with Section 1501.314;
78	78	(3) provide for:
79	79	(A) the filing, receipt, processing, and payment
80	80	of all claims against and debts of the system, and extinguishment of
81	81	all liabilities of the system, including balances on any lines of
82	82	credit that may have been established by or on behalf of the system;
83	83	(B) the collection and receipt of all assessments
84	84	made with respect to reinsured health benefit plan issuers,
85	85	including any deferred assessments and any final assessment made
86	86	under Subsection (f); and
87	87	(C) a final audit of the system by the state
88	88	auditor as provided by Subsection (g);
89	89	(4) specify that the transactions required by the plan
90	90	of suspension and addressed in Subdivisions (1)-(3) must be closed
91	91	not later than the effective date of the suspension of the operation
92	92	of the system as specified under Subdivision (5);
93	93	(5) state the effective date of the suspension of the
94	94	operation of the system; and
95	95	(6) provide for the proportionate distribution of any
96	96	surplus assets of the system that remain after the date specified
97	97	under Subdivision (5).
98	98	(d) The effective date of the suspension of the operation of
99	99	the system as specified under Subsection (c)(5) may not be later
100	100	than the 270th day after the date the commissioner by order approves
101	101	the plan of suspension.
102	102	(e) If the board fails to submit a suitable plan of
103	103	suspension, the commissioner, after notice and hearing, shall adopt
104	104	a plan in accordance with Subsection (c).
105	105	(f) The board may make a final assessment of the small
106	106	employer health benefit plan issuers that, for any portion of the
107	107	last year in which the system operated, were reinsured health
108	108	benefit plan issuers. An assessment under this subsection may be
109	109	made only if the board determines the assessment is necessary to
110	110	recover net losses of the system, as provided in Sections
111	111	1501.319-1501.326, including administrative expenses for
112	112	transactions essential to complete execution of the plan of
113	113	suspension, and the cost of the final audit by the state auditor.
114	114	(g) The transactions necessary to complete execution of the
115	115	plan of suspension are subject to audit by the state auditor under
116	116	Chapter 321, Government Code. The state auditor shall report the
117	117	cost of the final audit conducted under this section to the board
118	118	and the comptroller, and the board shall remit that amount to the
119	119	comptroller for deposit to the general revenue fund.
120	120	(h) The board serving immediately before the effective date
121	121	of the suspension of the operation of the system is discharged on
122	122	the effective date of the suspension of the operation of the system
123	123	as specified under Subsection (c)(5).
124	124	(i) After the effective date of the suspension of the
125	125	operation of the system as specified under Subsection (c)(5), the
126	126	commissioner shall take any action necessary under Subsection
127	127	(c)(6) to distribute the surplus assets of the system until all
128	128	remaining assets are distributed.
129	129	(j) During a period in which the operation of the system is
130	130	suspended, Sections 1501.307-1501.326 have no effect.
131	131	SECTION 3. The board of directors of the Texas Health
132	132	Reinsurance System serving on the effective date of this Act shall
133	133	submit to the commissioner of insurance a plan of suspension of the
134	134	operation of the Texas Health Reinsurance System, as described by
135	135	Section 1501.3022(c), Insurance Code, as added by this Act, not
136	136	later than the 90th day after the effective date of this Act. If the
137	137	board fails to timely submit the plan, the commissioner of
138	138	insurance shall adopt a plan in accordance with Sections
139	139	1501.3022(c)-(i), Insurance Code, as added by this Act.
140	140	SECTION 4. This Act takes effect immediately if it receives
141	141	a vote of two-thirds of all the members elected to each house, as
142	142	provided by Section 39, Article III, Texas Constitution. If this
143	143	Act does not receive the vote necessary for immediate effect, this
144	144	Act takes effect September 1, 2017.