89R9569 DNC-D
By: Morgan H.B. No. 3983
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of risk pools primarily consisting of
political subdivisions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 5, Local Government Code, is
amended by adding Chapter 172A to read as follows:
CHAPTER 172A. GENERAL PROVISIONS FOR RISK POOLS PRIMARILY
CONSISTING OF POLITICAL SUBDIVISIONS
Sec. 172A.001. APPLICABILITY OF CHAPTER. This chapter
applies only to a risk pool that primarily consists of political
subdivisions.
Sec. 172A.002. CONFLICT OF LAWS. To the extent of a
conflict between this chapter and other law, this chapter controls.
Sec. 172A.003. RULES. The commissioner of insurance may
adopt rules to implement this chapter.
Sec. 172A.004. APPLICABILITY OF INSURANCE LAWS. The
following insurance laws apply to coverage provided by a risk pool
subject to this chapter:
(1) Title 4, Insurance Code;
(2) Subtitle C, Title 5, Insurance Code; and
(3) Chapter 830, Insurance Code.
Sec. 172A.005. REQUIRED DISCLOSURES. A risk pool that
provides health or property and casualty coverage to the members of
the pool must annually provide to risk pool members:
(1) a written disclosure that the risk pool is not
insurance and is not regulated in the same manner as insurers
providing similar coverage;
(2) a copy of the declarations page of the coverage
provided under the risk pool that:
(A) lists and identifies each type of coverage
provided under the risk pool; and
(B) describes the process for filing claims and
appeals;
(3) a copy of the risk pool's budget for the preceding
risk pool year;
(4) a report stating the financial status of the risk
pool; and
(5) a report with a written explanation of each claim
denial made by the risk pool in the preceding risk pool year.
Sec. 172A.006. ENFORCEMENT. (a) The commissioner of
insurance and the Texas Department of Insurance may enforce this
chapter against a risk pool in the same manner as the department
enforces an insurance law against an insurer under Subtitle B,
Title 2, Insurance Code.
(b) A person may bring an action against a risk pool in
accordance with a law authorizing a private action under Subtitle
C, Title 5, Insurance Code. Governmental immunity of a risk pool to
suit and from liability is waived to the extent of liability created
by this subsection.
SECTION 2. Section 172A.004, Local Government Code, as
added by this Act, applies only to a contract entered into on or
after January 1, 2026.
SECTION 3. This Act takes effect September 1, 2025.