By: Schwertner S.B. No. 1642
(In the Senate - Filed February 25, 2025; March 11, 2025,
read first time and referred to Committee on Business & Commerce;
April 14, 2025, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 10, Nays 0; April 14, 2025,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1642 By: Schwertner
A BILL TO BE ENTITLED
AN ACT
relating to the administration of the Texas Department of
Insurance, including the appointment of the state commission of
insurance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 31.001(1), Insurance Code, is amended to
read as follows:
(1) "Commission" ["Commissioner"] means the state
commission [commissioner] of insurance.
SECTION 2. Section 31.007, Insurance Code, is amended to
read as follows:
Sec. 31.007. REFERENCES TO BOARD OR COMMISSIONER. A
reference in this code or other law to the former State Board of
Insurance, the Board of Insurance Commissioners, [or] an individual
commissioner, or the commissioner of insurance means the commission
[commissioner] or the department as consistent with the respective
duties of the commission [commissioner] and the department under
this code and other insurance laws.
SECTION 3. The heading to Subchapter B, Chapter 31,
Insurance Code, is amended to read as follows:
SUBCHAPTER B. STATE COMMISSION [COMMISSIONER] OF INSURANCE
SECTION 4. Section 31.021, Insurance Code, is amended to
read as follows:
Sec. 31.021. GOVERNING BODY [CHIEF EXECUTIVE]. (a) The
commission [commissioner] is the department's governing body
[chief executive and administrative officer]. The commission
[commissioner] shall administer and enforce this code, other
insurance laws of this state, and other laws granting jurisdiction
or applicable to the department or the commission [commissioner].
(b) The commission [commissioner] has the powers and duties
vested in the department by:
(1) this code and other insurance laws of this state;
and
(2) Title 5, Labor Code, and other workers'
compensation insurance laws of this state.
SECTION 5. Section 31.022, Insurance Code, is amended to
read as follows:
Sec. 31.022. APPOINTMENT; TERM; PRESIDING OFFICER.
(a) The governor, with the advice and consent of the senate, shall
appoint three members to serve on the commission serving staggered
terms of six years [the commissioner. The commissioner serves a
two-year term that expires on February 1 of each odd-numbered
year].
(b) In appointing members to serve on the commission, the
governor shall appoint:
(1) one member with expertise in insurance regulation;
(2) one member with expertise in insurance
administration; and
(3) one member with expertise in insurance consumer
advocacy.
(c) The governor shall designate one member of the
commission as the presiding officer. The presiding officer:
(1) serves at the pleasure of the governor;
(2) serves for a two-year term that expires February 1
of each odd-numbered year; and
(3) is ineligible to be designated as presiding
officer more than once during a six-year period.
(d) The governor shall appoint a member of the commission
[the commissioner] without regard to the race, color, disability,
sex, religion, age, or national origin of the appointee.
SECTION 6. Section 31.023, Insurance Code, is amended to
read as follows:
Sec. 31.023. QUALIFICATIONS. A member of the commission
[The commissioner] must:
(1) be a competent and experienced administrator;
(2) be well informed and qualified in the field of
insurance and insurance regulation; [and]
(3) be well informed and qualified in consumer
advocacy;
(4) have at least five years of experience in the
administration of business or government or as a practicing
attorney, [or] certified public accountant, physician, dentist,
chiropractor, podiatrist, or health care administrator or business
owner; and
(5) be a resident of this state.
SECTION 7. Section 31.024, Insurance Code, is amended to
read as follows:
Sec. 31.024. INELIGIBILITY FOR PUBLIC OFFICE. A member of
the commission [The commissioner] is ineligible to be a candidate
for another [a] public elective office in this state, unless the
member [commissioner] has resigned and the governor has accepted
the resignation.
SECTION 8. Section 31.027, Insurance Code, is amended to
read as follows:
Sec. 31.027. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from office if a member of the commission [the
commissioner]:
(1) does not have at the time of appointment the
qualifications required by Section 31.023;
(2) does not maintain during service as member
[commissioner] the qualifications required by Section 31.023;
(3) violates a prohibition established by Section
33.001, 33.003, 33.004, or 33.005; or
(4) cannot, because of illness or disability,
discharge the member's [commissioner's] duties for a substantial
part of the member's [commissioner's] term.
(b) The validity of an action of the commission
[commissioner] or the department is not affected by the fact that it
is taken when a ground for removal of a member of the commission
[commissioner] exists.
SECTION 9. Subchapter C, Chapter 31, Insurance Code, is
amended by adding Section 31.040 to read as follows:
Sec. 31.040. DEFINITION. In this subchapter, "executive
director" means the department's executive director employed under
Section 31.041.
SECTION 10. Section 31.041, Insurance Code, is amended to
read as follows:
Sec. 31.041. EXECUTIVE DIRECTOR; DEPARTMENT PERSONNEL.
(a) Subject to the General Appropriations Act or other law, the
commission [commissioner] shall employ:
(1) an executive director; and
(2) officers and employees the commission considers
[appoint deputies, assistants, and other personnel as] necessary to
carry out the powers and duties of the commission [commissioner]
and the department under this code, other insurance laws of this
state, and other laws granting jurisdiction or applicable to the
department or the commission [commissioner].
(b) A person employed [appointed] under this section must
have the professional, administrative, and insurance experience
necessary to qualify the person for the position to which the person
is employed [appointed].
[(c) A person appointed as an associate or deputy
commissioner or to hold an equivalent position must have at least
five years of the experience required for appointment as
commissioner under Section 31.023. At least two years of that
experience must be in work related to the position to be held.]
SECTION 11. Section 31.042, Insurance Code, is amended to
read as follows:
Sec. 31.042. DUTIES OF EXECUTIVE DIRECTOR; DIVISION OF
DEPARTMENT PERSONNEL RESPONSIBILITIES. (a) The executive director
is responsible for the daily operations of the department and shall
coordinate the activities of department officers and employees.
(b) The executive director [commissioner] shall develop and
implement policies that clearly define the respective
responsibilities of [the commissioner and the staff of the]
department officers and employees.
SECTION 12. Section 31.043(a), Insurance Code, is amended
to read as follows:
(a) The executive director [commissioner or the
commissioner's designee] shall prepare and maintain a written
policy statement to ensure implementation of a program of equal
employment opportunity under which all personnel transactions are
made without regard to race, color, disability, sex, religion, age,
or national origin. The policy statement must include:
(1) personnel policies, including policies relating
to recruitment, evaluation, selection, appointment, training, and
promotion of personnel that are in compliance with Chapter 21,
Labor Code;
(2) a comprehensive analysis of the department
workforce that meets federal and state guidelines;
(3) procedures by which a determination can be made of
significant underuse in the department workforce of all persons for
whom federal or state guidelines encourage a more equitable
balance; and
(4) reasonable methods to appropriately address those
areas of significant underuse.
SECTION 13. Section 31.044, Insurance Code, is amended to
read as follows:
Sec. 31.044. QUALIFICATIONS AND STANDARDS OF CONDUCT. The
executive director [commissioner] shall provide to the commission
and department officers and employees, as often as necessary,
information regarding their:
(1) qualification for office or employment under this
code; and
(2) responsibilities under applicable laws relating
to standards of conduct for state officers and employees.
SECTION 14. Section 31.045, Insurance Code, is amended to
read as follows:
Sec. 31.045. CAREER LADDER PROGRAM; PERFORMANCE
EVALUATIONS. (a) The executive director [commissioner or the
commissioner's designee] shall develop an intra-agency career
ladder program. The program must require intra-agency posting of
all nonentry level positions concurrently with any public posting.
(b) The executive director [commissioner or the
commissioner's designee] shall develop a system of annual
performance evaluations. All merit pay for department officers and
employees must be based on the system established under this
subsection.
SECTION 15. Sections 33.002(a) and (b), Insurance Code, are
amended to read as follows:
(a) A person is not eligible for appointment as a member of
the commission [commissioner] if the person, the person's spouse,
or any other person who resides in the same household as the person:
(1) is registered, certified, or licensed by the
department;
(2) is employed by or participates in the management
of a business entity or other organization regulated by or
receiving funds from the department;
(3) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization regulated by or receiving funds from the department;
or
(4) uses or receives a substantial amount of tangible
goods, services, or funds from the department, other than
compensation or reimbursement authorized by law.
(b) A person is not eligible for appointment as a member of
the commission [commissioner] if the person:
(1) is a stockholder, director, officer, attorney,
agent, or employee of an insurance company, insurance agent,
insurance broker, or insurance adjuster; or
(2) is directly or indirectly interested in a business
described by Subdivision (1).
SECTION 16. Sections 33.004(a) and (b), Insurance Code, are
amended to read as follows:
(a) A person who is an officer, employee, or paid consultant
of a trade association in the field of insurance may not be:
(1) a member of the commission [commissioner]; or
(2) an employee of the department who is exempt from
the state's position classification plan or is compensated at or
above the amount prescribed by the General Appropriations Act for
step 1, salary group A17, of the position classification salary
schedule.
(b) A person who is the spouse of an officer, manager, or
paid consultant of a trade association in the field of insurance may
not be:
(1) a member of the commission [commissioner]; or
(2) an employee of the department who is exempt from
the state's position classification plan or is compensated at or
above the amount prescribed by the General Appropriations Act for
step 1, salary group A17, of the position classification salary
schedule.
SECTION 17. Not later than December 1, 2025, the governor
shall:
(1) appoint each initial member of the state
commission of insurance to serve staggered terms beginning January
1, 2026, with one of the members serving a two-year term, one of the
members serving a four-year term, and one of the members serving a
six-year term; and
(2) designate a member appointed under Subdivision (1)
of this section as the initial presiding officer of the state
commission of insurance.
SECTION 18. Until each member of the initial state
commission of insurance is appointed and confirmed by the senate in
the manner provided by Section 31.022, Insurance Code, as amended
by this Act, the commissioner of insurance serving on the effective
date of this Act shall, unless otherwise removed as provided by law,
continue in office under the prior law that governed the office, and
that prior law is continued in effect for that purpose. If on
January 1, 2026, there is a vacancy in the office of a member of the
state commission of insurance created under this Act because the
initial appointee has not been confirmed by the senate as provided
by Section 31.022, Insurance Code, as amended by this Act, has died,
or refuses or is permanently unable to serve, the commissioner
serving on that date shall, unless otherwise removed as provided by
law, continue in office under the prior law that governed the office
until the governor fills the vacancy by appointment in the manner
provided by Section 31.022, Insurance Code, as amended by this Act.
The prior law that governed the office of the commissioner of
insurance is continued in effect for that purpose.
SECTION 19. This Act takes effect September 1, 2025.
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