Part I.
Texas Department of Insurance
Chapter A.
General Administration
Subchapter C. Maintenance Taxes and Fees
28 TAC §1.414
The Commissioner of Insurance adopts an amendment to §1.414,
concerning assessment of maintenance taxes and fees for payment in 1997,
without changes to the proposed text as published in the November 19, 1996,
issue of the
Texas Register
(21 TexReg 11225).
A public hearing was held on December 12, 1996.
The amendment is necessary to adjust the rates of assessment for maintenance
taxes and fees for 1997 which will provide the revenue necessary to fund
appropriations made by the Legislature.
Section 1.414 applies the rates to the gross premium receipts for the calendar
year 1996, or some other basis designated by statute, to life, accident,
and health insurance; motor vehicle insurance; casualty insurance, and fidelity,
guaranty and surety bonds; fire insurance and allied lines, including inland
marine; workers' compensation insurance; title insurance; health maintenance
organizations; third party administrators; and corporations issuing prepaid
legal services contracts. The department anticipates the adopted rates will
produce revenue of $41,744,662 to the state's general revenue fund.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Insurance Code, Articles 4.17,
5.12, 5.24, 5.49, 5.68, 9.46, 21.07-6 §21, 23.08A, 1.03A, and Article
20A.33 (the Texas Health Maintenance Organization Act), which provide authorization
for the Texas Department of Insurance to assess maintenance taxes and fees
for the lines of insurance and related activities specified in amended §1.414.
Article 4.17 establishes a maintenance tax based on insurance premiums for
life, accident, and health coverage and the gross considerations for annuity
and endowment contracts. Article 5.12 establishes a maintenance tax based
on insurance premiums for motor vehicle coverage. Article 5.24 establishes
a maintenance tax based on insurance premiums for casualty insurance and
fidelity, guaranty and surety bonds coverage. Article 5.49 establishes a
maintenance tax based on insurance premiums for fire and allied lines coverage,
including inland marine. Article 5.68 establishes a maintenance tax based
on insurance premiums for workers' compensation coverage. Article 9.46 establishes
a maintenance fee based on insurance premiums for title coverage. Article
21.07-6 §21 establishes a maintenance tax based on the gross amount
of administrative or service fees for third party administrators. Article
23.08A establishes a maintenance tax based on gross revenue of corporations
issuing prepaid legal service contracts. The Texas Health Maintenance Organization
Act, §33 (codified at the Insurance Code, article 20A.33), establishes
an annual tax based on the gross amounts of revenues collected for the issuance
of health maintenance certificates or contracts. Article 1.03A authorizes
the commissioner of insurance to adopt rules and regulations for the conduct
and execution of the duties and functions of the department as authorized
by statute.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on December 23, 1996.
TRD-9618644
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 13, 1997
Proposal publication date: November 19, 1996
For further information, please call: (512) 463-6327
28 TAC §1.415
The Commissioner of Insurance adopts an amendment to §1.415,
concerning assessment of a maintenance tax surcharge which will be used to
service the bonded indebtedness of the Texas Workers' Compensation Insurance
Fund, without changes to the proposed text as published in the November 19,
1996, issue of the
Texas Register
(21 TexReg
11226). A public hearing was held on December 12, 1996.
The amendment is necessary to adjust the rate of maintenance tax surcharges
due in 1997 on the basis of gross premium receipts for calendar year 1996
for workers' compensation companies. The surcharge will be used to service
the bonded indebtedness of the Texas Workers' Compensation Fund.
The Texas Workers' Compensation Commission annually establishes and certifies
to the comptroller of public accounts the rate of assessment for the maintenance
taxes which are authorized to pay the cost of administering the Texas Workers'
Compensation Act. The commissioner of insurance may increase the Texas Workers'
Compensation Commission tax rate to a rate sufficient to pay all debt service
on the bonds issued on behalf of the Texas Workers' Compensation Insurance
Fund, subject to the maximum rate established by the Texas Labor Code, §404.003.
The department estimates $22,340,015 will be generated from the maintenance
tax surcharge which will be used to pay debt service for $300 million in
bonds issued in 1991 by the Texas Public Finance Authority on behalf of the
Texas Workers' Compensation Fund.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Insurance Code, Articles 5.76-3,
5.76-5, 5.68 and 1.03A and the Texas Labor Code, §403.002. The Insurance
Code, Article 5.76-3 establishes the Texas Workers' Compensation Insurance
Fund. Article 5.76-5 establishes the maintenance tax surcharge. Article 5.68
establishes the maintenance tax based on premiums for workers' compensation
coverage. Article 1.03A authorizes the commissioner to adopt rules and regulations
for the conduct and execution of the duties and functions of the department
as authorized by statute. The Texas Labor Code, §403.002 establishes
the maintenance tax for workers' compensation insurance companies.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on December 23, 1996.
TRD-9618645
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 13, 1997
Proposal publication date: November 19, 1996
For further information, please call: (512) 463-6327
Subchapter J. Examination Expenses and Assessments
28 TAC §7.1012
The Commissioner of Insurance adopts an amendment to §7.1012,
concerning assessments to cover the expenses of examining insurance companies,
without changes to the proposed text as published in the November 19, 1996,
issue of the
Texas Register
(20 TexReg 11227).
A public hearing was held on December 12, 1996.
The amendment is necessary to provide a rate of assessment for domestic
and foreign insurance company examination expenses in 1997 which will provide
the revenue necessary to fund the appropriations made by the Legislature.
Section 7.1012 provides the method and rates of assessment for examination
expenses of foreign and domestic insurance companies. Rates of assessment
are levied against and collected from each domestic insurance company based
on admitted assets and gross premium receipts for the 1996 calendar year,
and from each foreign insurance company examined during the 1997 calendar
year based on a percentage of the gross salary paid to an examiner for each
month or part of a month during which the examination is made. The department
anticipates that the adopted rate will produce revenue of $11,546,384 to
the state's general revenue fund. The expenses and charges to be assessed
are in addition to, and not in lieu of, any other charge which may be made
under the law, including the Insurance Code, Article 1.16.
No comments were received regarding the adoption of the amendment.
The amendment is adopted under the Insurance Code, Articles 1.16
and 1.03A. The Insurance Code, Article 1.16(a) and (b) authorizes the commissioner
of insurance to make assessments necessary to cover the expenses of examining
insurance companies and to comply with the provisions of the Insurance Code,
Articles 1.16, 1.17, and 1.18, in such amounts as the commissioner certifies
to be just and reasonable. In addition, Article 1.16(c) provides that expenses
incurred in the examination of foreign insurers by Texas examiners shall
be collected by the commissioner by assessment. Article 1.03A authorizes
the commissioner of insurance to adopt rules and regulations for the conduct
and execution of the duties and functions of the department as authorized
by statute.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on December 23, 1996.
TRD-9618642
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 13, 1997
Proposal publication date: November 19, 1996
For further information, please call: (512) 463-6327
Subchapter E. Examinations and Annual Reports
Chapter 7.
Corporate and Financial Regulation
Chapter 25.
Insurance Premium Finance