Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 1.
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 the year
2001. The amended section is adopted without changes to the proposed text
as published in the November 3, 2000, issue of the
Texas Register
(25 TexReg 10870) and will not be republished.
The amendment is necessary to adjust the rates of assessment for maintenance
taxes and fees for 2001 which will provide the revenue necessary to fund appropriations
made by the Legislature to fund regulation of the insurance industry in Texas
by the department.
The department uses the rule making process to give notice to the public
and the opportunity to comment on the proposed rates of assessment for maintenance
taxes. Section 1.414 sets rates of assessment and applies those rates to the
gross premium receipts for the calendar year 2000, 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 $42,165,670 to the state's
general revenue fund.
No comments were received.
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, and 20A.33 and §36.001.
These articles provide authorization for the Texas Department of Insurance
to assess maintenance taxes and fees for the lines of insurance and related
activities specified in the adopted §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, Section 33 (Article 20A.33),
establishes an annual tax based on the gross amounts of revenues collected
for the issuance of health maintenance certificates or contracts. Section
36.001 authorizes the commissioner of insurance to adopt rules for the conduct
and execution of the duties and functions of the department only 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.
Filed with the Office of
the Secretary of State on December 21, 2000.
TRD-200008911
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 10, 2001
Proposal publication date: November 3, 2000
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.
The amendment is adopted without changes to the text as proposed in the November
3, 2000, issue of the
Texas Register
(25 TexReg
10872) and will not be republished.
The amendment is necessary to provide a rate of assessment for domestic
and foreign insurance company examination expenses in 2001 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 2000 calendar year,
and from each foreign insurance company examined during the calendar year
2001 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 $12,418,193 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.
The amendment is adopted under the Insurance Code Article 1.16
and §36.001. Article 1.16(a) and (b) authorize 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. Section 36.001 authorizes the commissioner
of insurance to adopt rules for the conduct and execution of the duties and
functions of the department only 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.
Filed with the Office of
the Secretary of State on December 21, 2000.
TRD-200008910
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 10, 2001
Proposal publication date: November 3, 2000
For further information, please call: (512) 463-6327
Subchapter M. MANDATORY BENEFIT NOTICE REQUIREMENTS
28 TAC §§21.2101-21.2103, 21.2105, 21.2106
The Commissioner of Insurance adopts amendments to §§21.2101-21.2103,
21.2105, and 21.2106, concerning mandatory benefit notice requirements. Section
21.2105 is adopted with changes to the proposed text as published in the November
3, 2000, issue of the
Texas Register
(25 TexReg
10873). Sections 21.2101-21.2103, and 21.2106 are adopted without changes
and will not be republished.
The amendments implement legislation enacted by the 76th Legislature in
House Bill 1764 which redesignated Insurance Code Article 21.53D as Article
21.53I and amended the law to comply with the notice requirements under the
federal Women's Health and Cancer Rights Act of 1998 (Act). The federal law
was effective January 1, 1999, and requires that a notice regarding coverage
for reconstructive surgery be sent to each enrollee of a health benefit plan
that provides medical or surgical benefits with respect to a mastectomy, upon
enrollment, and annually thereafter. The amendments also make clarifying changes
for consistency and readability.
The notices provide information to individuals who have had a mastectomy,
or may have a mastectomy, concerning the benefits available under their health
benefit plans for reconstructive surgery. The amendment to §21.2101 specifies
the effective date for the notice and requires providing a notice to the enrollee
concerning health coverage for reconstructive surgery after mastectomy. The
amendment to §21.2102 adds nonprofit health corporation and reciprocal
exchange to the definition of carrier, clarifies the definition of enrollee,
addresses documents concerning multiple employer welfare arrangements and
clarifies that the definition of health benefit plan that pertains to reconstructive
surgery after mastectomy does not include certain plans. The amendment to §21.2103
advises the carrier as to which notices are required to be issued concerning
reconstructive surgery after mastectomy. The amendment to §21.2105 sets
forth the manner and occasions upon which the carrier is to send the notices.
The amendment to §21.2106 sets forth the language of the prescribed notices
and renumbers existing forms. In response to comments, and for clarification,
the department added paragraph (4) to §21.2105(b) to clarify that the
requirements concerning the delivery of mandatory benefit notices as stated
in §21.2105(a)(2)-(6) are also applicable to the reconstructive surgery
after mastectomy notices. Corrections to references were also made to §21.2105.
Comment: A commenter requested clarification that the annual notice concerning
reconstructive surgery after mastectomy may be delivered with other plan documents,
including combining the language with other notices, and other member notifications.
Agency Response: The department agrees that the annual notice requirement
concerning reconstructive surgery after mastectomy may be delivered with other
plan documents or written communication by the plan or carrier and has added
language to §21.2105(b)(4) that clarifies that §21.2105(a)(3) is
also applicable to this notice. Concerning the commenter's suggestion of combining
the language with other notices, the department directs the commenter to §21.2103(c),
which allows a carrier to combine the language of the required notices into
one notice.
Comment: A commenter stated that the proposed rule pre-empts small employer
plans from compliance, which may conflict with federal law.
Agency Response: The department disagrees. The amendments to §§21.2101-21.2103,
21.2105, and 21.2106 are due to The Women's Health and Cancer Rights Act of
1998, which requires that all group and individual health plans of a carrier
that provide coverage for mastectomy, are subject to the notice requirements
under the Act. Accordingly, the department directs the commenter to §21.2102(3)(B),
the definition of Health Benefit Plan, concerning the reconstructive surgery
after mastectomy notices. Pursuant to the definition, which complies with
federal law, small employer plans are not exempted from compliance with the
notice requirements.
Comment: A commenter suggested for the purpose of standardization, minimizing
costs, and reducing errors, that in lieu of describing in the notice any specific
deductibles, copayments, and/or coinsurance applicable to the coverage and/or
benefits, it would be more practical to require a carrier to state the general
requirements and refer the enrollee to the member materials, which provide
a complete description of the coverage and/or benefits.
Agency Response: The department disagrees. Under the Act, the enrollment
notice must describe the benefits and any deductibles and coinsurance limitations
applicable to the coverage.
For with changes: PacifiCare of Texas, Inc. and Texas Association of Health
Plans (TAHP).
Against: None.
The amendments are adopted under the Insurance Code Articles
21.53I, 3.51-6, 3.70-1, 3.95-15, 20A.22, 26.04 and §36.001. Article 21.53I
provides that the commissioner may adopt rules to implement the article and
to meet the minimum requirements of federal law. Article 3.51-6, §5 authorizes
the department to issue such rules as may be necessary to carry out the various
provisions of the article. Article 3.70-1(D) authorizes the department to
issue such reasonable rules as may be necessary to carry out the various purposes
and provisions of the article. Article 3.95-15(a) directs the commissioner
to adopt rules as necessary to carry out the provisions of the subchapter
and meet the minimum requirements of federal law and regulations. Article
20A.22(c) authorizes the commissioner to promulgate such reasonable rules
as are necessary and proper to meet the requirements of federal law and regulations.
Article 26.04 directs the commissioner to adopt rules as necessary to meet
the minimum requirements of federal law and regulations. Section 36.001 provides
that the commissioner may adopt rules for the conduct and execution of the
powers and duties of the department only as authorized by statute.
§21.2105.Delivery of Mandatory Benefit Notices.
(a)
The notices required by §21.2103(a)(1), (3) and (4)
of this title (relating to Mandatory Benefit Notices) shall be issued to enrollees
of a health benefit plan that is delivered, issued for delivery, or renewed
on or after January 1, 1998, and shall be provided according to the following
paragraphs:
(1)
The notice shall be provided:
(A)
within 60 days of March 29, 1998 to enrollees whose plans
were renewed or issued between January 1, 1998 and March 29, 1998;
(B)
within 60 days of enrollment to new enrollees, whether
in a newly issued or newly delivered health benefit plan, or an existing plan
which is renewed after March 29, 1998; or
(C)
within 60 days of renewal date to existing enrollees of
an existing plan which is renewed after March 29, 1998.
(2)
Except as specified in paragraph (6) of this subsection,
the notices shall be delivered to enrollees through the U.S. Postal Service.
(3)
The notice may be delivered with other health benefit plan
documents as long as the time frames set forth in paragraph (1) of this subsection
are met. For example, the notice may be delivered with the policy, certificate,
evidence of coverage, or enrollment/insurance card.
(4)
If the notices are provided to the primary enrollee's last
known address, the requirements of this section are satisfied with respect
to all enrollees residing at that address.
(5)
If a covered spouse or dependent's last known address is
different than the primary enrollee, separate notices are required to be provided
to the spouse or the dependent at the spouse's or dependent's last known address.
(6)
For group health benefit plans, the notice may be provided
to the group master contract holder for distribution to enrollees if the carrier
has an agreement with the group master contract holder that the notice will
be delivered in accordance with the timelines specified in paragraph (1) of
this subsection; however, the carrier will be held responsible for ensuring
that notice is provided to the enrollees.
(b)
The notices required by §21.2103(a)(2) of this title
shall be issued to enrollees of a health benefit plan and shall be provided
according to the following paragraphs.
(1)
The enrollment notice required by §21.2103(a)(2)(A)
of this title shall be issued to each enrollee upon enrollment in the health
benefit plan.
(2)
The annual notice required by §21.2103(a)(2)(B) of
this title shall be issued to each enrollee annually.
(3)
Notwithstanding §21.2103(a)(2) of this title, a carrier
may elect to issue the enrollment notice required by §21.2103(a)(2)(A)
of this title to satisfy the annual notice requirements set forth in §21.2103(a)(2)(B)
of this title.
(4)
The provisions of subsection (a)(2)-(6) of this section
shall also apply to these notices, except for the timeline requirements of
subsection (a)(1) of this section.
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.
Filed with the Office of
the Secretary of State on December 19, 2000.
TRD-200008821
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 8, 2001
Proposal publication date: November 3, 2000
For further information, please call: (512) 463-6327
Subchapter E. EXAMINATIONS AND ANNUAL REPORTS
Chapter 7.
CORPORATE AND FINANCIAL REGULATION
Chapter 21.
TRADE PRACTICES
Chapter 25.
INSURANCE PREMIUM FINANCE