Texas 2017 - 85th Regular

Texas Senate Bill SB1171 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Estes S.B. No. 1171
2		-	(Paul)
	1	+	S.B. No. 1171
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		relating to the suspension and reactivation of the operation of the
7	5		Texas Health Reinsurance System.
8	6		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	7		SECTION 1. Section 1501.302, Insurance Code, is amended to
10	8		read as follows:
11	9		Sec. 1501.302. TEXAS HEALTH REINSURANCE SYSTEM. (a) The
12	10		Texas Health Reinsurance System is a nonprofit entity administered
13	11		by a board of directors and subject to the supervision and control
14	12		of the commissioner.
15	13		(b) The system may operate only during the period an order
16	14		authorizing operation of the system under Section 1501.3021 is in
17	15		effect. The system may not operate after the effective date of an
18	16		order of suspension of operation of the system under Section
19	17		1501.3022 until a subsequent order authorizing the operation of the
20	18		system under Section 1501.3021, if any, is effective.
21	19		SECTION 2. Subchapter G, Chapter 1501, Insurance Code, is
22	20		amended by adding Sections 1501.3021 and 1501.3022 to read as
23	21		follows:
24	22		Sec. 1501.3021. AUTHORIZATION OF OPERATION. (a) The
25	23		commissioner shall hold a hearing if:
26	24		(1) the commissioner believes small employer health
27	25		benefit plan issuers in this state are threatened with the
28	26		inability to secure reinsurance coverage in the open market; or
29	27		(2) the commissioner receives a petition requesting
30	28		the hearing from an association of health benefit plan issuers in
31	29		this state or a group of at least 15 small employer health benefit
32	30		plan issuers operating in this state.
33	31		(b) If, after a hearing under Subsection (a), the
34	32		commissioner finds that the operation of the system is in the public
35	33		interest, the commissioner by order shall:
36	34		(1) authorize the operation of the system;
37	35		(2) appoint a board of directors under Section
38	36		1501.303; and
39	37		(3) direct the board to develop a plan of operation
40	38		under Section 1501.306 to ensure the system is fully implemented on
41	39		a date specified in the order that is not later than the 60th day
42	40		after the effective date of the order.
43	41		(c) Sections 1501.307-1501.326 apply to the operation of
44	42		the system after the date the system is implemented as described by
45	43		Subsection (b)(3).
46	44		Sec. 1501.3022. SUSPENSION OF OPERATION. (a) The
47	45		commissioner shall hold a hearing if the system is operating or is
48	46		authorized to operate and:
49	47		(1) the commissioner believes small employer health
50	48		benefit plan issuers in this state are not threatened with the
51	49		inability to secure reinsurance coverage in the open market; or
52	50		(2) the commissioner receives a petition requesting
53	51		the hearing from an association of health benefit plan issuers in
54	52		this state or a group of at least 15 small employer health benefit
55	53		plan issuers operating in this state.
56	54		(b) If, after a hearing under Subsection (a), the
57	55		commissioner finds that suspension of the operation of the system
58	56		is in the public interest, the commissioner by order shall direct
59	57		the board to submit to the commissioner for approval, not later than
60	58		the 60th day after the date of the order, a plan of suspension of
61	59		operation of the system.
62	60		(c) A plan of suspension under Subsection (b) must:
63	61		(1) specify the date after which a health benefit plan
64	62		issuer that is a risk-assuming health benefit plan issuer on the
65	63		effective date of the plan of suspension may not:
66	64		(A) become a reinsured health benefit plan issuer
67	65		under Sections 1501.310, 1501.311, and 1501.312; and
68	66		(B) reinsure with the system a small employer
69	67		group, or any risk, covered under any small employer health benefit
70	68		plan;
71	69		(2) specify the date after which a health benefit plan
72	70		issuer that is a reinsured health benefit plan issuer on the
73	71		effective date of the plan of suspension may not:
74	72		(A) reinsure with the system additional small
75	73		employer groups in accordance with Section 1501.314; or
76	74		(B) cede additional eligible lives to the system
77	75		in accordance with Section 1501.314;
78	76		(3) provide for:
79	77		(A) the filing, receipt, processing, and payment
80	78		of all claims against and debts of the system, and extinguishment of
81	79		all liabilities of the system, including balances on any lines of
82	80		credit that may have been established by or on behalf of the system;
83	81		(B) the collection and receipt of all assessments
84	82		made with respect to reinsured health benefit plan issuers,
85	83		including any deferred assessments and any final assessment made
86	84		under Subsection (f); and
87	85		(C) a final audit of the system by the state
88	86		auditor as provided by Subsection (g);
89	87		(4) specify that the transactions required by the plan
90	88		of suspension and addressed in Subdivisions (1)-(3) must be closed
91	89		not later than the effective date of the suspension of the operation
92	90		of the system as specified under Subdivision (5);
93	91		(5) state the effective date of the suspension of the
94	92		operation of the system; and
95	93		(6) provide for the proportionate distribution of any
96	94		surplus assets of the system that remain after the date specified
97	95		under Subdivision (5).
98	96		(d) The effective date of the suspension of the operation of
99	97		the system as specified under Subsection (c)(5) may not be later
100	98		than the 270th day after the date the commissioner by order approves
101	99		the plan of suspension.
102	100		(e) If the board fails to submit a suitable plan of
103	101		suspension, the commissioner, after notice and hearing, shall adopt
104	102		a plan in accordance with Subsection (c).
105	103		(f) The board may make a final assessment of the small
106	104		employer health benefit plan issuers that, for any portion of the
107	105		last year in which the system operated, were reinsured health
108	106		benefit plan issuers. An assessment under this subsection may be
109	107		made only if the board determines the assessment is necessary to
110	108		recover net losses of the system, as provided in Sections
111	109		1501.319-1501.326, including administrative expenses for
112	110		transactions essential to complete execution of the plan of
113	111		suspension, and the cost of the final audit by the state auditor.
114	112		(g) The transactions necessary to complete execution of the
115	113		plan of suspension are subject to audit by the state auditor under
116	114		Chapter 321, Government Code. The state auditor shall report the
117	115		cost of the final audit conducted under this section to the board
118	116		and the comptroller, and the board shall remit that amount to the
119	117		comptroller for deposit to the general revenue fund.
120	118		(h) The board serving immediately before the effective date
121	119		of the suspension of the operation of the system is discharged on
122	120		the effective date of the suspension of the operation of the system
123	121		as specified under Subsection (c)(5).
124	122		(i) After the effective date of the suspension of the
125	123		operation of the system as specified under Subsection (c)(5), the
126	124		commissioner shall take any action necessary under Subsection
127	125		(c)(6) to distribute the surplus assets of the system until all
128	126		remaining assets are distributed.
129	127		(j) During a period in which the operation of the system is
130	128		suspended, Sections 1501.307-1501.326 have no effect.
131	129		SECTION 3. The board of directors of the Texas Health
132	130		Reinsurance System serving on the effective date of this Act shall
133	131		submit to the commissioner of insurance a plan of suspension of the
134	132		operation of the Texas Health Reinsurance System, as described by
135	133		Section 1501.3022(c), Insurance Code, as added by this Act, not
136	134		later than the 90th day after the effective date of this Act. If the
137	135		board fails to timely submit the plan, the commissioner of
138	136		insurance shall adopt a plan in accordance with Sections
139	137		1501.3022(c)-(i), Insurance Code, as added by this Act.
140	138		SECTION 4. This Act takes effect immediately if it receives
141	139		a vote of two-thirds of all the members elected to each house, as
142	140		provided by Section 39, Article III, Texas Constitution. If this
143	141		Act does not receive the vote necessary for immediate effect, this
144	142		Act takes effect September 1, 2017.
	143	+	______________________________ ______________________________
	144	+	President of the Senate Speaker of the House
	145	+	I hereby certify that S.B. No. 1171 passed the Senate on
	146	+	April 19, 2017, by the following vote: Yeas 31, Nays 0.
	147	+	______________________________
	148	+	Secretary of the Senate
	149	+	I hereby certify that S.B. No. 1171 passed the House on
	150	+	May 12, 2017, by the following vote: Yeas 142, Nays 0, one
	151	+	present not voting.
	152	+	______________________________
	153	+	Chief Clerk of the House
	154	+	Approved:
	155	+	______________________________
	156	+	Date
	157	+	______________________________
	158	+	Governor