34 TAC §41.15
(Editor's note: The Teacher Retirement System of Texas proposes
for permanent adoption the new section it adopts on an emergency basis in
this issue. The text of the new section is in the Emergency Rules section
of this issue.)
The Teacher Retirement System of Texas (TRS) proposes
a new §41.15 concerning the requirements to bid on insurance for school
district employees and retirees. The proposed new rule will implement Insurance
Code article 3.50-4A, which was passed by the 76th Legislature, 1999 in Senate
Bill 1128. In addition, the proposal addresses a change in the title of Chapter
41 from Health Care Benefits to Insurance Programs to more accurately reflect
the subject matter of the chapter and the addition of two new subchapter titles.
The proposed new rule has been simultaneously adopted on an emergency basis.
In accordance with the new law, the proposed rule sets forth the requirements
for the selection of contractors for new insurance plans established by Insurance
Code article 3.50-4A, including long-term care insurance, optional permanent
life insurance, and short-term and long-term disability insurance. The selection
requirements include minimum premium income requirements and minimum capital
and surplus requirements. These criteria are necessary to ensure financial
stability and integrity of the new programs and are consistent with Insurance
Code article 3.50-4A, §2(d), which provides that TRS may consider "ability
to service contracts, past experiences, financial stability, and other relevant
criteria." The proposed rule also requires contractors to administer enrollment,
adjudication of claims and coordination of services for the applicable insurance
plans and requires contractors to account for premiums collected and disbursed.
Ronnie Jung, Chief Financial Officer, has determined that for each year
of the first five-year period the rule is in effect, there will be no fiscal
implications to state or local governments as a result of enforcing or administering
the rule.
Mr. Jung has also determined that for each year of the first five years
the rule is in effect the public benefit anticipated will be that the insurance
plans established by Insurance Code article 3.50-4A will be offered to school
district employees and retirees in accordance with the new law. The proposed
rule is not regulatory in nature, and applies only to carriers that choose
to bid on the insurance plans established under the new law (no carrier is
required to bid). Therefore, there are no anticipated economic costs to persons
who are required to comply with the section as proposed, or to small businesses.
Comments on the proposal may be submitted to Charles L. Dunlap, Executive
Director, 1000 Red River, Austin, Texas 78701.
The new section is proposed under the Government Code, Chapter
825, §825.102, which authorizes the Board of Trustees of the Teacher
Retirement System to adopt rules for the administration of the funds of the
retirement system. Further, it is adopted under Insurance Code article 3.50-4A,
including §2(d), which provides that competitive bidding shall be required
under rules adopted by TRS and that the rules may provide criteria to determine
qualified carriers. In addition, it is adopted under Insurance Code article
3.50-4A §§3(a) and (b), which provide that TRS shall adopt rules
for the selection of contractors, that the rules must require the contractors
to perform certain functions and that TRS may adopt other rules necessary
to administer the program.
There are no other laws affected by this proposed rule.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State, on
December 22, 1999.
TRD-9909018
Charles Dunlap
Executive Director
Teacher Retirement System of Texas
Proposed date of adoption: February 25, 2000
For further information, please call: (512) 391-2115