Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 3.
LIFE, ACCIDENT, AND HEALTH INSURANCE ANNUITIES
Subchapter X. PREFERRED PROVIDER PLANS
28 TAC §3.3703
The Texas Department of Insurance proposes amendments to §3.3703,
concerning required contracting provisions for preferred provider plans. The
proposed amendments address the disclosure of certain information concerning
fee schedules and coding procedures that affect the payment process relating
to services provided by physicians and other health care providers pursuant
to a preferred provider contract with an insurer that is subject to Texas
Insurance Code Article 3.70-3C. The proposed amendments implement Article
3.70-3C, Sec. 3A(i), which states that insurers shall provide preferred providers
with copies of all applicable claim processing policies or procedures. The
amendments clarify that an insurer must disclose information concerning fees
and coding that relates to or affects the claim payment process and the payment
to be made to a preferred provider for services that the preferred provider
has contracted to provide on behalf of an insurer. Lack of contractual access
to this information may have prohibited some preferred providers from ascertaining
whether they had been compensated according to the terms of their contracts
with the insurer. The proposed amendments are designed to remedy this problem.
The Department has decided to publish for comment two alternative rule
amendments each intended to accomplish the stated purpose. Interested persons
may comment on either or both of these proposals, which are contained at §3.3703(a)(20)
and (21). However, following public comment, the Department will adopt only
one alternative, possibly with changes from the proposed version.
The proposed amendments to §3.3703(a)(11) require that a contract
between a preferred provider and an insurer contain terms regarding compliance
with all applicable prompt pay statutes and regulations. The first alternative,
proposed new paragraph (20) to §3.3703(a), requires that a contract between
a preferred provider and an insurer contain preferred provider-specific information
in a sufficient level of detail that a reasonable person with sufficient training,
experience and competence in claims processing can determine the payment to
be made according to the terms of the contract. The information must explain
all methodologies that will be used to process and pay claims submitted in
accordance with the contract, including a fee schedule, any non-standard coding
methodologies, bundling processes, downcoding policies, and any other applicable
policy or procedure used by the insurer in processing or paying claims under
the contract. Additionally, the insurer must provide any addendum, schedule,
exhibit or policy used by the insurer that is necessary to provide a reasonable
understanding of the information that is being disclosed to the preferred
provider. For example, a fee schedule that indicates that the insurer will
reimburse certain claims at a usual and customary rate must explain how the
insurer will determine the usual and customary rate for a particular service.
An insurer may provide any required information in a document or manual that
is separate from the contract, provided that the terms of the contract identify
the document or manual as the source of the required information and the document
or manual is presented to the preferred provider no later than the execution
date of the contract. If the document or manual refers to information that
is held by an outside source and is not within the control of the insurer,
such as state Medicaid or federal Medicare fee schedules, the contract must
provide a specific means by which the preferred provider may access the source.
An insurer that cannot provide the information required by proposed §3.3703(a)(20)
due to copyright laws or a licensing agreement may supply a summary of the
required information. However, the summary must be sufficient to allow the
preferred provider to determine the payment to be made under the contract.
Any information required to be provided pursuant to this paragraph may be
amended, revised or substituted only upon written notice to the preferred
provider at least 60 calendar days prior to the effective date of the amendment,
revision or substitution. An insurer that fails to provide any required information
is in violation of proposed paragraph (20) as set forth in §3.3703(b).
The requirements added by proposed paragraph (20) apply to all contracts entered
into or renewed on or after the effective date of the amendments. An insurer
that has an existing contract with a preferred provider as of the effective
date must provide the information required by this paragraph within 90 calendar
days of the effective date and any amendments, revisions, or substitutions
of any of this information that occur while the contract is in effect must
be made pursuant to the notice requirements set forth in proposed paragraph
(20). A preferred provider receiving information pursuant to proposed paragraph
(20) may not use or disclose the information for any purpose other than practice
management, billing activities or other business operations. A preferred provider
may not use the information to misrepresent the level of services actually
performed when submitting a claim under the contract. Information provided
pursuant to these amendments about a particular service does not constitute
a verification that the service that a preferred provider has provided or
proposes to provide is a covered benefit for a particular insured. Proposed
paragraph (20) is not intended to dictate the types of practices, policies
or procedures that relate to or affect the claims payment process that an
insurer may elect to employ. In addition, other plan requirements, such as
co-payments, co-insurance or annual, lifetime or other deductibles, may also
affect the actual amount of reimbursement.
The second alternative, proposed paragraph (21), requires a contract between
an insurer and a preferred provider to provide that the preferred provider
may request a description of the coding guidelines, including any underlying
bundling, recoding, or other payment processes and fee schedules applicable
to specific procedures that the preferred provider will receive under the
contract. The insurer or the insurer's agent must provide the requested information
no later than the 30th day after the date the insurer receives the request.
In addition, the insurer must provide notice of material changes to the coding
guidelines and fee schedules not later than the 60th day before the date the
changes are to take effect and cannot make retroactive revisions to the coding
guidelines and fee schedules. A preferred provider that receives information
pursuant to proposed paragraph (21) may use or disclose the information only
for the purpose of practice management, billing activities, or other business
operations. The amendments provide that nothing in proposed paragraph (21)
shall be interpreted to require an insurer to violate copyright or other law
by disclosing proprietary software that the insurer has licensed. In addition
to the above, the insurer shall, on request of a preferred provider, provide
the name, edition, and model version of the software that the insurer uses
to determine bundling and unbundling of claims. The requirements added by
proposed paragraph (21) apply to all contracts entered into or renewed on
or after the effective date of the amendments. As with proposed paragraph
(20), information provided pursuant to these amendments about a particular
service does not constitute a verification that the service that a preferred
provider has provided or proposes to provide is a covered benefit for a particular
insured. Proposed paragraph (21) is not intended to dictate the types of practices,
policies or procedures that relate to or affect the claims payment process
that an insurer may elect to employ. In addition, other plan requirements,
such as co-payments, co-insurance or annual, lifetime or other deductibles,
may also affect the actual amount of reimbursement.
The department will consider the adoption of amendments to §3.3703
in a public hearing under Docket Number 2524, scheduled for 9:30 a.m. on July
19, 2002, in Room 100 of the William P. Hobby, Jr. State Office Building,
333 Guadalupe Street, Austin, Texas.
Kimberly Stokes, Senior Associate Commissioner, Life, Health and Licensing
Program, has determined that for each year of the first five years the proposed
amendments will be in effect, there will be no fiscal impact to state and
local governments as a result of the enforcement or administration of the
amendments. There will be no measurable effect on local employment or the
local economy as a result of the proposal.
Ms. Stokes has also determined that for each year of the first five years
the amendments are in effect, the public benefits anticipated as a result
of the proposed amendments will be the required disclosure of claim processing
policies and procedures by insurers to preferred providers. The benefit of
proposed paragraph (11) is that it makes the rule consistent with the statutory
requirements of Article 3.70-3C. The benefits of proposed alternative paragraph
(20) and proposed alternative paragraph (21) are similar. Paragraph (20) is
more comprehensive in that it contains more detail and imposes a standard
that the information to be disclosed will ensure that preferred providers
receive information of a sufficient level of detail that a reasonable person
with sufficient training, experience and competence in claims processing can
determine the payment to be made according to the terms of the contract for
covered services that are rendered to insureds. Paragraph (21) is more streamlined
and does not specify a standard for the required disclosure of the information.
It is anticipated that either alternative will increase the number of preferred
providers available to provide services to insureds under preferred provider
benefit plans and result in a reduction in the time and resources currently
being expended on resolution of disputes between preferred providers and insurers,
which, in turn, will enhance services to consumers.
The probable economic cost to persons required to comply with paragraphs
(20) and (21) will depend upon the number and types of contracts that the
insurer enters into with preferred providers involved in preferred provider
benefit plans. Some insurers are already providing fee schedules to preferred
providers and not all insurers employ bundling processes and/or downcoding
policies in claim processing. It is anticipated that the cost to these insurers
would be minimal.
With regard to paragraph (20), insurers that are not currently making this
information available to preferred providers will need to review their claim
payment processes to determine the kind of information that will have to be
provided to comply with the amendments. For example, an insurer that leases
software or other modalities from a vendor relating to bundling and/or downcoding
will need to review the agreements and, if necessary, consult with the vendor
to determine how it can comply with the requirements of these amendments.
Some vendor contracts may specify a cost associated with such consultations.
Insurers will also need to review current contracts, prepare the required
information and identify all preferred providers that must be provided with
this information. The amount of time involved will depend upon the complexity
of the individual insurer's contracts and processes. The cost to the insurer
will vary depending upon the types of individuals utilized to review existing
contracts and prepare the information required by these amendments. The department
estimates that the labor costs will range from an average of $27 per hour
of labor to an average of $43 per hour of labor. The labor figures are based
upon the 2001 Occupational Wage Data collected by the Texas Workforce Commission.
The range of figures represents the average cost, per hour, for review of
existing contracts and preparation of the required information by an administrative
service manager at the low end of the range and for preparation by an attorney
at the high end of the range. An insurer utilizing outside counsel may incur
increased costs for labor. Both small businesses and the largest businesses
affected by these amendments would incur the same cost per hour of labor.
Paragraph (20) is designed to provide maximum flexibility to insurers to determine
the mechanism by which information that is not physically contained in a current
contract, such as any information required to be provided pursuant to §3.3703(a)(20)(A)(i)(II),
(D) or (F), will be made available to preferred providers. Costs involved
with providing the information to preferred providers will depend upon the
mechanism selected by the insurer. For example, it is estimated that an insurer
that chooses to mail required information would incur a cost of $5.00 per
50-page mailing. This figure includes the cost of paper, printing, envelopes
and postage. The actual total cost to each insurer will vary depending on
the number of preferred providers to whom the required information must be
sent. If an insurer chooses to use a toll-free telephone system to make any
required information available to a preferred provider, it is estimated that
the insurer would incur costs of $27.50 per telephone line per month and an
additional $5.00 per port per month for each line. It is estimated that the
cost per call will be from 5 - 10 cents per minute per call. The estimates
for providing toll-free telephone assistance are based on the department's
costs for its toll-free telephone information assistance lines. The costs
incurred by a specific insurer would vary based upon the number of lines or
ports required or already in use by the insurer and the expected call volume.
The call volume experienced by an insurer would vary based upon the number
of preferred providers with which the insurer contracts. Based on discussions
with industry, the estimated labor cost for one employee to answer the telephone
calls from preferred providers on a full-time basis is $38,000 per year. The
estimate is based upon the assumption that a claims examiner would be the
most qualified employee for answering such inquiries. The actual costs would
vary depending upon the volume of calls received and whether there are currently
adequate personnel to respond to these telephone calls as part of their job
activities. Insurers that opt to provide information through a searchable
database would have different costs depending upon the type and sophistication
of the system utilized. The department estimates that the cost of developing
a Web-based search mechanism of an existing database will range from $22,000
to $45,000, depending upon the complexity of the database. This estimate is
based upon the department's own experiences in developing similar tools for
customers and consumers. Insurers with highly complex databases may require
additional modifications that would increase the cost for these insurers.
As in the case of labor costs, both small businesses and the largest businesses
affected by these amendments would incur the same costs for providing information
to preferred providers.
There may be somewhat different costs for proposed alternative paragraph
(21). As with paragraph (20), an insurer that leases software or other modalities
from a vendor relating to bundling and/or downcoding will need to review the
agreements and, if necessary, consult with the vendor to determine how it
can comply with the requirements of these amendments. Some vendor contracts
may specify a cost associated with such consultations. Insurers will also
need to review contracts and prepare the requested information. However, since
paragraph (21) requires the information to be provided only upon request,
an insurer will be required to review only the contracts for which a specific
type of preferred provider has made a request. In addition, without the reasonable
person standard imposed in paragraph (20), the review of each contract and
preparation of the materials under this paragraph may not take as much time
as the reviews and preparation that would take place under paragraph (20).
The cost to the insurer will vary depending upon the types of individuals
utilized to review existing contracts and prepare the information required
by paragraph (21). The department estimates that the labor costs will range
from an average of $27 per hour of labor to an average of $43 per hour of
labor. The labor figures are based upon the 2001 Occupational Wage Data collected
by the Texas Workforce Commission. The range of figures represents the average
cost, per hour, for review of existing contracts and preparation of the required
information by an administrative service manager at the low end of the range
and for preparation by an attorney at the high end of the range. An insurer
utilizing outside counsel may incur increased costs for labor. Both small
businesses and the largest businesses affected by these amendments would incur
the same cost per hour of labor. It is estimated that the cost of mailing
requested information would be $5.00 per 50-page mailing. This figure includes
the cost of paper, printing, envelopes and postage. If an insurer chooses
to deliver requested information using some alternative method, it is anticipated
that costs would be similar to those described for compliance with the alternative
delivery methods set forth for paragraph (20). Again, there should be no difference
in cost for large and small employers.
It is the department's position that the adoption of these proposed amendments
will have no adverse economic effect on small or micro businesses. It is neither
legal nor feasible to waive or modify the requirements of these amendments
for small or micro businesses, because physicians and providers contracting
with insurers should be able to obtain information regarding claims processing
policies and procedures whether they are contracting with a small insurer
or a large insurer.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on July 15, 2002 to Lynda H. Nesenholtz, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comment must be
simultaneously submitted to Barbara Holthaus, Director of Project Development,
Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of
Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
The amendments are proposed under the Insurance Code Article
3.70-3C, Section 3A and §36.001. Article 3.70-3C, Section 3A(n) gives
the Commissioner the authority to adopt rules as necessary to implement Article
3.70-3C, Section 3A. Article 3.70-3C, Section 3A(i) provides that an insurer
shall make available to a preferred provider its claim processing policies
and procedures. The Commissioner's authority to adopt rules relating to the
disclosure of claims payment processes such as fee schedules, bundling processes,
and downcoding policies was clarified by Attorney General Opinion No. JC-0502.
The opinion states that the Texas Department of Insurance is authorized to
promulgate rules to require preferred provider benefit plans and HMOs to disclose
their fee schedules, bundling processes, and downcoding policies. Section
36.001 provides that the Commissioner of Insurance may adopt rules to execute
the duties and functions of the Texas Department of Insurance as authorized
by statute.
The following article is affected by this proposal: Article 3.70-3C, Preferred
Provider Benefit Plans
§3.3703.Contracting Requirements.
(a)
An insurer marketing a preferred provider benefit plan
must contract with physicians and health care providers to assure that all
medical and health care services and items contained in the package of benefits
for which coverage is provided, including treatment of illnesses and injuries,
will be provided under the plan in a manner that assures both availability
and accessibility of adequate personnel, specialty care, and facilities. Each
contract must meet the following requirements:
(1) - (10)
(No change.)
(11)
A contract between a preferred provider and an insurer
shall require
the insurer to comply with all applicable statutes and
rules pertaining to prompt payment of clean claims, including, but not limited
to, Insurance Code Article 3.70-3C §3A (Prompt Payment of Preferred Providers)
and §§21.2801-21.2820 of this title (relating to Submission of Clean
Claims) with respect to
payment to the provider for covered services
that are rendered to insureds
.
[
[
[
(12) - (19)
(No change.)
(20)
A contract between a preferred
provider and an insurer must contain information of a sufficient level of
detail that a reasonable person with sufficient training, experience and competence
in claims processing can determine the payment to be made according to the
terms of the contract for covered services that are rendered to insureds.
(A)
This information must include a preferred provider-specific
summary and explanation of all payment and reimbursement methodologies that
will be used to process and pay claims submitted by a preferred provider which
must, in turn, include:
(i)
a fee schedule, including, if applicable, CPT,
HCPCS, ICD-9-CM codes and modifiers:
(I)
by which all claims submitted by or on behalf
of the preferred provider will be calculated and paid; or
(II)
that pertains to the range of health care services
reasonably expected to be delivered by that type of contracting physician
or health care provider on a routine basis along with a toll-free number or
electronic address through which the physician or health care provider may
request the fee schedules applicable to any covered services that the physician
or health care provider intends to provide to an insured and any other information
required by this paragraph, including non-standard coding methodologies, bundling
processes, and downcoding policies, that pertain to the service for which
the fee schedule is being requested if that information has not previously
been provided to the preferred provider;
(ii)
any non-standard coding methodologies;
(iii)
any bundling processes, including if applicable,
global service periods, comprehensive codes, component codes and mutually
exclusive procedures;
(iv)
downcoding policies, including, if applicable,
evaluation and management criteria;
(v)
a description of any other applicable policy
or procedure the insurer may use that affects the processing or payment of
specific claims submitted by or on behalf of the preferred provider, including
recoupment;
(vi)
any addenda, schedules, exhibits or policies
used by the insurer in carrying out the processing or payment of claims submitted
by or on behalf of the preferred provider that are necessary to provide a
reasonable understanding of the information provided pursuant to this paragraph;
and
(vii)
any information required to be provided by
the insurer to the preferred provider through the contract under any applicable
statutes and rules pertaining to prompt payment of clean claims, including,
but not limited to, Insurance Code Article 3.70-3C §3A (Prompt Payment
of Preferred Providers) and §§21.2801 - 21.2820 of this title.
(B)
An insurer may comply with this paragraph by
providing the required information in a document or manual that is separate
from the contract only if:
(i)
the additional document or manual is clearly
identified as the source of the specific information required by this paragraph;
(ii)
the additional document or manual is provided
to the preferred provider no later than the time at which the contract is
presented for execution; or
(iii)
in the case of a reference to an outside source
of information as the basis for fee computation that is not within the control
of the insurer, such as state Medicaid or federal Medicare fee schedules,
the contract clearly identifies the source and provides within the contract
the means by which the provider may readily access the source electronically,
telephonically, or as otherwise agreed to by the parties; and
(iv)
the additional document or manual document
is clearly identified by and incorporated into the contract by reference.
(C)
Nothing in this paragraph shall be construed
to require an insurer to provide specific information that would violate any
applicable copyright law or licensing agreement. However, the insurer must
supply, in lieu of any information withheld on the basis of copyright law
or licensing agreement, a summary of the information that will allow a reasonable
person with sufficient training, experience and competence in claims processing
to determine the payment to be made according to the terms of the contract
for covered services that are rendered to insureds as required by subparagraph
(A) of this paragraph.
(D)
No amendment, revision, or substitution of any
of the information, including addenda, schedules, exhibits, or documents or
manuals incorporated by reference required by this paragraph shall be effective
as to the preferred provider, unless the insurer provides at least 60 calendar
days written notice to the preferred provider identifying with specificity
the amendment, revision or substitution. In the case of a contractual provision
between the insurer and the preferred provider that provides for mutual agreement
of the parties as the sole mechanism for requiring amendment, revision or
substitution of the information required by this paragraph, then the written
notice specified in this section does not supersede the requirement for mutual
agreement.
(E)
Failure to comply with this paragraph constitutes
a violation as set forth in subsection (b) of this section.
(F)
This paragraph applies to all contracts entered
into or renewed after the effective date of this paragraph. Notwithstanding
this subparagraph, if a preferred provider contract does not contain the terms
set forth in subparagraphs (A) and (B) of this paragraph, the insurer must
provide the information required by subparagraphs (A) and (B) of this paragraph
to the preferred provider within 90 calendar days of the effective date of
these amendments. If the preferred provider has previously agreed to communicate
with the insurer electronically, the insurer may provide the required information
via e-mail, or by the use of an electronic database through which the preferred
provider can access this information. Any amendments, revisions or substitutions
of any information provided pursuant to this subparagraph must be made in
accordance with subparagraph (D) of this paragraph.
(G)
A preferred provider that receives information
under this paragraph:
(i)
may not use or disclose the information for
any purpose other than the preferred provider's practice management, billing
activities, or other business operations;
(ii)
may not use this information to knowingly submit
a claim that does not accurately represent the level, type or amount of services
that were actually provided to an insured or to misrepresent any aspect of
the services for purposes of payment; and
(iii)
may not rely upon information provided pursuant
to this paragraph about a service as a verification that an insured is covered
for that service under the terms of the insured's policy or certificate.
(21)
A preferred provider contract
between an insurer and a physician or provider must provide that the physician
or provider may request a description of the coding guidelines, including
any underlying bundling, recoding, or other payment process and fee schedules
applicable to specific procedures that the physician or provider will receive
under the contract.
(A)
The insurer or the insurer's agent will provide
the coding guidelines and fee schedules not later than the 30th day after
the date the insurer receives the request.
(B)
The insurer will provide notice of material
changes to the coding guidelines and fee schedules not later than the 60th
day before the date the changes take effect and will not make retroactive
revisions to the coding guidelines and fee schedules.
(C)
A physician or provider who receives information
under subparagraph (A) of this paragraph may use or disclose the information
only for the purpose of practice management, billing activities, or other
business operations.
(D)
Nothing in this paragraph shall be interpreted
to require an insurer to violate copyright or other law by disclosing proprietary
software that the insurer has licensed. In addition to the above, the insurer
shall, on request of a physician or provider, provide the name, edition, and
model version of the software that the insurer uses to determine bundling
and unbundling of claims.
(E)
This paragraph applies to all contracts entered
into or renewed after the effective date of this paragraph.
(b) - (c)
(No change.)
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 June 3, 2002.
TRD-200203434
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 14, 2002
For further information, please call: (512) 463-6327
Subchapter A. AUTOMOBILE INSURANCE
1.
CERTIFICATES OF ASSUMPTION
28 TAC §5.11
The Texas Department of Insurance proposes an amendment to §5.11,
concerning assumption certificates related to automobile insurance policies.
The section provides for the issuance of assumption certificates covering
automobile policies only after the Texas Department of Insurance has approved
a reinsurance assumption agreement that is in the best interests of the policyholders.
This proposed amendment deletes the requirement of the ceding carrier being
in conservatorship or receivership as the department recognizes the need for
approving assumption reinsurance agreements in other limited situations. In
general, these limited situations are tied to the best interests of the affected
policyholders when a transaction such as a related dissolution, sale or hazardous
financial condition, or other financial condition of the ceding insurer indicates
an assumption of the policies would be in the best interest of the policyholders.
Each situation will be determined on a case-by-case review.
Betty Patterson, Senior Associate Commissioner, Financial Program, has
determined that for each year of the first five years the proposed amendment
is in effect, there will be no fiscal implications for state or local government
as a result of enforcing and administering the section as proposed. There
is no anticipated effect on local employment or local economy.
Ms. Patterson also has determined that for each year of the first five
years the proposed amendment is in effect, the public benefit anticipated
as a result of the adoption of the amendment will be the more efficient servicing
and handling of policyholders where the ceding insurer is dissolving, being
sold, or in hazardous financial condition. In addition, the security of the
policyholder is a primary factor in the consideration of any request to approve
an assumption reinsurance transaction. Ms. Patterson has also determined that,
for each year of the first five years that this proposed section is in effect,
there will be no anticipated economic cost to persons required to comply with
the proposed section and thus will have no adverse impact to small or micro
business.
To be considered, written comments on the proposal must be submitted no
later than 5:00 P.M. on July 15, 2002, to Lynda H. Nesenholtz, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comments should
be submitted simultaneously to Jimmy Atkins, Staff Attorney, Mail Code 110-1A,
Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
A request for a public hearing on the proposal should be submitted separately
to the Office of the Chief Clerk.
The amendment is proposed under the Insurance Code Articles 5.06
and 5.10 and §36.001. Articles 5.06 and 5.10 authorize the commissioner
to adopt rules as necessary to carry out the provisions of the Insurance Code,
Chapter 5, regarding automobile insurance. Section 36.001 provides the commissioner
of insurance with the authority to adopt rules for the conduct and execution
of the powers and duties of the department as authorized by statute.
Insurance Code Article 5.06 is affected by this section.
§5.11.Certificates of Assumption.
A certificate of assumption may be attached only to
an automobile
insurance
[
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 May 30, 2002.
TRD-200203355
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 14, 2002
For further information, please call: (512) 463-6327
Subchapter A. EXAMINATION AND FINANCIAL ANALYSIS
28 TAC §7.65
(Editor's note: The text of the following section proposed for
repeal will not be published. The section may be examined in the offices of
the Texas Department of Insurance or in the Texas Register office, Room 245,
James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Department of Insurance proposes the repeal
of §7.65 concerning the 1995 annual statement and 1996 quarterly statements,
other reporting forms, and diskettes necessary to report information concerning
the financial condition and business operations and activities of insurers
and other entities regulated by the department. The section is proposed for
repeal to facilitate the proposal of a new §7.65 concerning 2002 annual
and quarterly statement blanks, other reporting forms, electronic data filings
with the National Association of Insurance Commissioners via the Internet
and instructions to be used by insurers and certain other entities regulated
by the Texas Department of Insurance when reporting their financial condition
and business operations and activities of the 2002 calendar year. The department
is proposing the new §7.65 which appears elsewhere in this issue of the
Betty Patterson, CPA, AFE, Senior Associate Commissioner, Financial Program
has determined that, for the first five-year period the repeal of the section
will be in effect, there will be no fiscal implications for state or local
government as a result of enforcing or administering the repeal, and there
will be no effect on local employment or local economy.
Ms. Patterson also has determined that, for each year of the first five
years the repeal of the section will be in effect, the public benefit anticipated
as a result of the repeal of the section will be the elimination of obsolete
regulations. There will be no economic cost to persons who are required to
comply with the repeal as proposed.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on July 15, 2002 to Lynda H. Nesenholtz, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comments should
be submitted to Betty Patterson, CPA, AFE, Senior Associate Commissioner,
Financial Program, Mail Code 305-2A, Texas Department of Insurance, P.O. Box
149099, Austin, Texas 78714-9099. A request for a public hearing should be
submitted separately to the Office of the Chief Clerk.
The repeal of the section is proposed under the Insurance Code
Article 1.11 and §36.001. Article 1.11 authorizes the commissioner to
make changes in the forms of the annual statements required of insurance companies
of any kind, as shall seem best adapted to elicit a true exhibit of their
condition and methods of transacting business. Section 36.001 provides that
the commissioner may adopt rules for the conduct and execution of the duties
and functions of the department as authorized by statute for general and uniform
application.
The following articles and section of the Insurance Code will be affected
by this proposed repeal: Articles 1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11,
6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39,
15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22,
21.39, 21.43, 21.49, 21.52F, 21.54, 22.06, 23.02 and 23.26, and §32.041.
§7.65.Requirements for Filing the 1995 Annual and 1996 Quarterly Statements, Other Reporting Forms, and Diskettes.
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 May 30, 2002.
TRD-200203344
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 14, 2002
For further information, please call: (512) 463-6327
28 TAC §7.65
The Texas Department of Insurance proposes new §7.65
concerning 2002 annual and quarterly statement blanks, other reporting forms,
electronic data filings with the National Association of Insurance Commissioners
(NAIC) via the Internet and instructions to be used by insurers and certain
other entities regulated by the Texas Department of Insurance when reporting
their financial condition and business operations and activities of the 2002
calendar year. The information provided by the completion of the forms is
necessary to allow the department to monitor the solvency, business activities
and statutory compliance of the insurers and other entities regulated by the
department. The new section defines terms relevant to the statement blanks
and reporting forms; provides the dates by which certain reports are to be
filed; and proposes to adopt by reference the NAIC 2002 annual and 2002 quarterly
statement blanks, other reporting forms and instructions for reporting the
financial condition and business operations and activities; and requires insurance
companies and certain other regulated entities to file such annual and quarterly
statements and other reporting forms with the department and/or the NAIC as
directed. Subsection (a) explains the purpose of the section and adopts by
reference the forms described in the section. Subsection (b) defines terms
used in the section. Subsection (c) describes the hierarchy of laws in the
event of a conflict between the Insurance Code, this section and other regulations.
Subsections (d)-(l) describe the forms, instructions and filing requirements
for the various types of insurers and other regulated entities. Subsection
(m) provides the department may request financial reports other than those
specified in this section. Copies of the forms and instructions are available
for inspection in the office of the Financial Analysis and Examinations Activity
of the Texas Department of Insurance, William P. Hobby Jr. State Office Building,
333 Guadalupe, Building 3, Third Floor, Austin, Texas. The new section will
replace existing §7.65 which concerned the adoption of the 1995 annual
and 1996 quarterly statement filings and is proposed for repeal elsewhere
in this issue of the
Texas Register
.
Betty Patterson, CPA, AFE, Senior Associate Commissioner, Financial Program,
has determined that for the first year the section will be in effect, there
will not be fiscal implications for state government as a result of enforcing
or administering the section. There will be fiscal implications in connection
with the filing of annual statements in 2003 as a result of Insurance Code
Article 1.11. Under Article 1.11, insurers are required to file a copy of
their annual statement with the NAIC. However, Article 1.11 also provides
that insurers cannot be required to pay any costs or expenses (other than
the expense of preparing and furnishing the annual statement to the NAIC)
for the filing of the annual statement with the NAIC; therefore such costs
are paid by the department to the NAIC. There will be no effect on local government
or local employment for the first year of the five-year period the section
will be in effect. There will not be fiscal implications for the remaining
four years the section is in effect since the section is applicable to financial
reporting for 2002 with the final report being due in 2003.
Ms. Patterson has also determined that, for each year of the first five
years this section, as proposed, is in effect, the public benefits anticipated
as a result of enforcing this section are the ability of the department to
provide financial information to the public and other regulatory bodies as
requested, and to monitor the financial condition of insurers and other regulated
entities licensed in Texas to better assure financial solvency. Such insurers
and other regulated entities are generally required by statute to provide
the department with annual reports on their operations. These reports generally
summarize information already captured or created by the insurer or other
regulated entity in its normal course of business. The probable economic cost
to insurers and other regulated entities required to comply with this proposed
section is estimated to be no more than $3,500. Such estimated cost may be
lower based upon factors such as the type of company (e.g. life, accident
and health, or property and casualty); the size of the company (e.g. large
or small); the type of business written within a company; and the cost of
annual statement software. The department assumes that micro, small and large
businesses will utilize employees who are familiar with the records of the
insurer or health maintenance organization and accounting practices in general.
Such individuals are compensated from $17 to $30 per hour based on the department's
experience. On the basis of cost per hour of labor, there is no expected difference
in cost of compliance between micro, small and larger businesses affected
by this section. The department finds it neither legal nor feasible to reduce
the effect of the proposed section on micro or small insurers subject to the
section since the information required by the forms is necessary to effectively
regulate and monitor the activities of insurers and other regulated entities
licensed in Texas regardless of their size.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on July 15, 2002, to Lynda H. Nesenholtz, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comments should
be submitted to Betty Patterson, CPA, AFE, Senior Associate Commissioner,
Financial Program, Mail Code 305-2A, Texas Department of Insurance, P. O.
Box 149099, Austin, Texas 78714-9099. A request for a public hearing on the
proposal should be submitted separately to the Office of the Chief Clerk.
The new section is proposed under the Insurance Code Articles
1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22,
9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22,
17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.39, 21.43, 21.49, 21.52F, 21.54,
22.06, 23.02, 23.26, and §§32.041 and 36.001. Article 1.11 authorizes
the commissioner to make changes in the forms of the annual statements required
of insurance companies of any kind, as shall seem best adapted to elicit a
true exhibit of their condition and methods of transacting business, and requires
certain insurers to make filings with the National Association of Insurance
Commissioners. Articles 3.07, 3.20-1, 3.27-2, 3.77, 6.11, 6.12, 8.07, 8.08,
8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18,
16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.49, 21.54, 22.06,
23.02, and 23.26 require the filing of financial reports and other information
by insurers and other regulated entities, and specify particular rulemaking
authority of the commissioner relating to those insurers and other regulated
entities. Article 21.39 requires insurers to establish adequate reserves and
provides for the adoption of each current formula for establishing reserves
applicable to each line of insurance. Article 21.43 provides the conditions
under which foreign insurers are permitted to do business in this state and
requires foreign insurers to comply with the provisions of the Insurance Code.
Article 21.52F authorizes the commissioner to adopt rules to implement the
regulation of nonprofit health corporations holding a certificate of authority
under that article. Section 32.041 requires the department to furnish the
statement blanks and other reporting forms necessary for companies to comply
with the filing requirements. Section 36.001 provides that the commissioner
may adopt rules for the conduct and execution of the duties and functions
of the department as authorized by statute for general and uniform application.
The following articles and section of the Insurance Code will be affected
by this proposed section: Articles 1.11, 3.07, 3.20-1, 3.27-2, 3.77, 6.11,
6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39,
15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22,
21.39, 21.43, 21.49, 21.52F, 21.54, 22.06, 23.02 and 23.26, and §32.041.
§7.65.Requirements for Filing the 2002 Quarterly and 2002 Annual Statements, Other Reporting Forms, and Electronic Data Filings with the NAIC.
(a)
Scope. This section provides insurers and other regulated
entities with the requirements for the 2002 quarterly statements, 2002 annual
statement, other reporting forms, and electronic data filings via the Internet
with the National Association of Insurance Commissioners (NAIC) necessary
to report information concerning the financial condition and business operations
and activities of insurers. This section applies to all insurers and other
regulated entities authorized to do the business of insurance in this state
and includes, but is not limited to, life insurers; accident insurers; life
and accident insurers; life and health insurers; accident and health insurers;
life, accident and health insurers; mutual life insurers; stipulated premium
insurers; group hospital service corporations; fire insurers; fire and marine
insurers; U.S. Branch of an alien insurer; Mexican casualty insurers; general
casualty insurers; fire and casualty insurers; mutual insurers other than
life; exempt associations; county mutual insurers; Lloyd's plans; reciprocal
and inter-insurance exchanges; domestic risk retention groups; domestic joint
underwriting associations; title insurers; fraternal benefit societies; farm
mutual insurers; health maintenance organizations; nonprofit health corporations;
nonprofit legal services corporations; the Texas Health Insurance Risk Pool;
the Texas Mutual Insurance Company (successor to the Texas Workers' Compensation
Insurance Fund); and the Texas Windstorm Insurance Association. The commissioner
adopts by reference, the 2002 NAIC quarterly statement blanks, the 2002 NAIC
annual statement blanks and the related instruction manuals, and other reporting
forms specified in this section. The annual and quarterly statement blanks
and other reporting forms are available from the department, Financial Analysis
and Examinations Activity, Mail Code 303-1A, P. O. Box 149099, Austin, Texas
78714-9099. Insurers and other regulated entities shall properly report to
the department and the NAIC by completing the appropriate annual and quarterly
statement blanks, prepared with laser quality print (hand written copies must
be prepared legibly using black ink), other reporting forms, and electronic
data filings with the NAIC via the Internet following the applicable instructions
as outlined in subsections (d) - (m) of this section.
(b)
Definitions. The following words and terms, when used in
this section, shall have the following meanings:
(1)
Association edition--Blanks and forms promulgated by the
NAIC.
(2)
Commissioner--The commissioner of insurance appointed under
the Texas Insurance Code.
(3)
Department--The Texas Department of Insurance.
(4)
Texas edition--Blanks and forms promulgated by the commissioner.
(c)
Conflicts with other laws. In the event of a conflict between
the Insurance Code, any currently existing departmental rule, form, instructions,
or any specific requirement of this section and the NAIC instructions listed
in this section, then and in that event, the Insurance Code, the department's
promulgated rule, form, instruction, or the specific requirement of subsections
(d) - (m) of this section shall take precedence and in all respects control.
(d)
Filing requirements for life, accident and health insurers.
Each life, life and accident, life and health, accident, accident and health,
mutual life, or life, accident and health insurance company, stipulated premium
insurance company, group hospital services corporation and the Texas Health
Insurance Risk Pool shall complete and file the blanks, forms, or electronic
data filings as directed in this subsection. (This subsection does not apply
to health maintenance organizations. Filing requirements for health maintenance
organizations are described in subsection (h) of this section.) The forms
and reports identified in paragraphs (1)(A)-(C); (1)(F) and (G); (2)(A)-(C);
and (3)(A)-(J) of this subsection shall be completed in accordance with the
2002 NAIC Annual Statement Instructions, Life, Accident and Health. The forms
and reports identified in paragraphs (1)(D)-(G); (2)(A) and (B); (3)(B), (D)
and (E) of this subsection shall be completed in accordance with the 2002
NAIC Health Annual Statement Instructions. The electronic data filings with
the NAIC via the Internet identified in paragraph (3)(K) and (L) of this subsection
shall be in accordance with the NAIC data specifications and instructions
for internet filing and shall include PDF format filing. Insurers described
under this subsection that reported 100% of their total direct premiums as
health premiums for the calendar year ending December 31, 2001 may elect to
file on the NAIC Health statement blank for the three quarters of 2002 and
the calendar year 2002 if the insurer wrote "health premiums" as defined in
the 2002 NAIC Health Annual Statement Instructions. Those instructions describe
health premiums to include hospital, surgical and major medical; Medicare
supplement business reportable in the Medicare Supplement Insurance Experience
Exhibit of the annual statement; dental and vision only coverage issued as
stand alone or as a rider to a medical policy that is not related to the medical
policy through deductibles or out of pocket limits; federal employees health
benefits plan premiums (FEHBP); Title XVIII - Medicare premiums; Title XIX
- Medicaid premiums that result from an arrangement between the company and
a Medicaid state agency for services to a Medicaid beneficiary; and other
health premiums such as stop loss, disability income, long term care, and
other. If a reporting entity qualifying under this subsection, elects to use
the health annual statement, it must continue to use that annual statement
for a minimum of three years or obtain written approval from its domestic
state to change to another type of annual statement. Foreign companies that
wrote less than 100% of health premiums in 2001 may file on the health annual
statement blank if permitted or required by their domicilary state.
(1)
Reports to be filed both with the department and the NAIC
include the following:
(A)
2002 Life, Accident and Health Annual Statement (association
edition) for the 2002 calendar year to be filed on or before March 1, 2003
(stipulated premium insurance companies, April 1, 2003);
(B)
2002 Life, Accident and Health Annual Statement of the
Separate Accounts (association edition) for the 2002 calendar year (required
of companies maintaining separate accounts), to be filed on or before March
1, 2003 ;
(C)
2002 Life, Accident and Health Quarterly Statements (association
edition), to be filed on or before May 15, August 15, and November 15, 2002.
However, a Texas stipulated premium insurance company, unless specifically
requested to do so by the department, is not required to file quarterly statements
with the department or the NAIC if it meets all three of the following conditions:
(i)
it is authorized to write only life insurance on its certificate
of authority;
(ii)
it collected premiums in the prior calendar year of less
than $1 million; and
(iii)
it had a profit from operations in the prior two calendar
years.
(D)
2002 Health Quarterly Statements (association edition),
to be filed on or before May 15, August 15, and November 15, 2002 if the company
qualifies as described in this subsection;
(E)
2002 Health Annual Statement (association edition) for
the 2002 calendar year, to be filed on or before March 1, 2003 if the company
qualifies as described in this subsection;
(F)
Management's Discussion and Analysis, to be filed as part
of the 2002 Life, Accident and Health Annual Statement on or before April
1, 2003, or if the 2002 Health Annual Statement is required, then filed as
part of the 2002 Health Annual Statement on or before April 1, 2003;
(G)
Actuarial Opinion, to be attached to the Life, Accident
and Health Annual Statement or Health Annual Statement, as applicable, and
in accordance with paragraph (4) of this subsection;
(2)
Reports to be filed only with the department:
(A)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
to be filed on or before March 1, 2003. This filing is also required if filing
a Health Annual Statement, as applicable;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2003 (stipulated premium companies, April 1, 2003). This filing is also
required if filing a Health Annual Statement, as applicable;
(C)
The Texas Health Insurance Risk Pool shall file the 2002
Life, Accident and Health Annual and Quarterly Statements as follows:
(i)
2002 Life, Accident and Health Annual Statement (association
edition), with only pages 1 - 5, the Notes to Financial Statements on page
19 and Schedule E Part 1 on page E24 to be completed and filed on or before
March 1, 2003.; and
(ii)
2002 Life, Accident and Health Quarterly Statement (association
edition), with only pages 1-5, the notes on page 7 and Schedule E on page
E08 to be completed and filed on or before May 15, August 15, and November
15, 2002.
(iii)
The Texas Health Insurance Risk Pool is not required
to file any reports, diskettes, or electronic data filings with the NAIC.
(D)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2003
(stipulated premium insurance companies, April 1, 2003);
(E)
Analysis of Surplus (Texas edition) for life, accident
and health insurers, to be filed on or before March 1, 2003 (stipulated premium
insurance companies, April 1, 2003);
(F)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), to be filed
with the annual statement on or before March 1, 2003 (stipulated premium companies,
April 1, 2003); and
(G)
Texas Supplemental Form - Number of Persons Covered Under
Texas Health Policies, as an attachment to the Texas state page of the annual
statement. This filing is also required if filing a Health Annual Statement,
as applicable.
(3)
Reports or electronic data filings via the Internet filed
only with the NAIC:
(A)
Trusteed Surplus Statement (association edition), Life,
Accident and Health Supplement (required of the U. S. branch of an alien insurer),
to be filed on or before May 15, August 15, November 15, 2002 and March 1,
2003 with the annual statement;
(B)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business), to be filed
on or before March 1, 2003. This filing is also required if filing a Health
Annual Statement, as applicable;
(C)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit business), to be filed on or before
April 1, 2003;
(D)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), to be filed on or
before March 1, 2003 (stipulated premium insurance companies, April 1, 2003).
This filing is also required if filing a Health Annual Statement, as applicable;
(E)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2003. This filing is also required if filing a Health
Annual Statement, as applicable;
(F)
Interest Sensitive Life Insurance Products Report (association
edition) (required of companies writing interest sensitive products), to be
filed on or before April 1, 2003;
(G)
Life, Health and Annuity Guaranty Association Model Act
Assessment Base Reconciliation Exhibit (association edition), to be filed
on or before April 1, 2003;
(H)
Adjustments to the Life, Health and Annuity Guaranty Association
Model Act Assessment Base Reconciliation Exhibit (association edition), to
be filed on or before April 1, 2003;
(I)
Workers' Compensation Carve-Out Supplement, to be filed
on or before March 1, 2003;
(J)
Supplemental Investment Risks Interrogatories, to be filed
on or before April 1, 2003;
(K)
Electronic data filings via the Internet containing annual
statement data, to be filed on or before March 1, 2003 (stipulated premium
insurance companies, April 1, 2003); and
(L)
Electronic data filings via the Internet containing quarterly
statement data, to be filed on or before May 15, August 15, and November 15,
2002. A Texas stipulated premium insurance company, unless specifically requested
to do so by the department, is not required to file quarterly electronic data
filings via the Internet with the NAIC if it meets all three of the following
conditions:
(i)
it is authorized to write only life insurance on its certificate
of authority;
(ii)
it collected premiums in the prior calendar year of less
than $1 million; and
(iii)
it had a profit from operations in the prior two calendar
years.
(4)
Actuarial opinions required by paragraph (1)(G) of this
subsection shall be in accordance with the following:
(A)
Unless exempted, the statement of actuarial opinion, attached
to either the Life, Accident and Health Annual Statement or the Health Annual
Statement, should follow the applicable provisions of §§3.1601-3.1611
of this title (relating to Actuarial Opinion and Memorandum Regulation).
(B)
For those companies exempted from §§3.1601-3.1611
of this title, instructions 1-12, established by the NAIC, must be followed.
(C)
Any stipulated premium company subject to §§3.1601-3.1611
of this title which does not insure or assume risk on contracts with death
benefits, cash value, or accumulation values on any one life in excess of
$15,000, except as permitted by Insurance Code Article 22.13, §1(b),
is exempt from submission of a statement of actuarial opinion in accordance
with §3.1608 of this title (relating to Statement of Actuarial Opinion
Based on an Asset Adequacy Analysis), but must submit an actuarial opinion
pursuant to §3.1607 of this title (relating to Statement of Actuarial
Opinion Not Including an Asset Adequacy Analysis).
(D)
Any company required by §3.4505(b)(3)(I) of this title
(relating to General Calculation Requirements for Basic Reserves and Premium
Deficiency Reserves) to opine on the application of X factors, shall attach
this opinion to the Life, Accident and Health Annual Statement or the Health
Annual Statement, as applicable.
(e)
Requirements for property and casualty insurers. Each fire,
fire and marine, general casualty, fire and casualty, or U.S. Branch of an
alien insurer, county mutual insurance company, mutual insurance company other
than life, Lloyd's plan, reciprocal or inter-insurance exchange, domestic
risk retention group, life insurance company that is licensed to write workers'
compensation, any farm mutual insurance company that filed an NAIC property
and casualty annual statement for the 2001 calendar year or had gross written
premiums in 2002 in excess of $5,000,000, any Mexican non-life insurer licensed
under any article of the Insurance Code other than, or in addition to, Insurance
Code Article 8.24, domestic joint underwriting association, the Texas Mutual
Insurance Company (successor to the Texas Workers' Compensation Insurance
Fund) and the Texas Windstorm Insurance Association shall complete and file
the following blanks, forms, and diskettes or electronic data filings as directed
by this subsection. The forms and reports identified in paragraphs (1)(A)-(E);
(2)(A)-(C); and (3)(A)-(H) of this subsection shall be completed in accordance
with the 2002 NAIC Annual Statement Instructions, Property and Casualty. The
diskettes or electronic version of the filings with the NAIC via the Internet
identified in paragraph (3)(I)-(K) of this subsection shall be in accordance
with the NAIC data specifications and instructions and shall include PDF format
filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
2002 Property and Casualty Annual Statement (association
edition), to be filed on or before March 1, 2003;
(B)
2002 Property and Casualty Quarterly Statements (association
edition), to be filed on or before May 15, August 15, and November 15, 2002;
(C)
2002 Combined Property/Casualty Annual Statement (association
edition), to be filed on or before May 1, 2003. This statement is required
only for those affiliated insurers that wrote more than $35 million in direct
premiums as a group in calendar year 2002, as disclosed in Schedule T of the
Annual Statement(s);
(D)
Management's Discussion and Analysis, to be filed on or
before April 1, 2003;
(E)
Actuarial Opinion to be filed with the annual statement;
and
(2)
Reports to be filed only with the department:
(A)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
to be filed on or before March 1, 2003;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2003;
(C)
The Texas Windstorm Insurance Association (Insurance Code
Article 21.49) shall complete and file only the following:
(i)
Property and Casualty Annual Statement (association edition),
to be filed on or before March 1, 2003;
(ii)
Property and Casualty Quarterly Statement (association
edition), to be filed on or before May 15, August 15, and November 15, 2002;
and
(iii)
Management's Discussion and Analysis, to be filed on
or before April 1, 2003.
(iv)
The Texas Windstorm Insurance Association is not required
to file any reports with the NAIC.
(D)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), to be filed
with the annual statement on or before March 1, 2003;
(E)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2003;
(F)
Analysis of Surplus (Texas edition) for property and casualty
insurers except Texas county mutual companies, to be filed on or before March
1, 2003;
(G)
Supplement for County Mutuals (Texas edition) (required
of Texas county mutual companies), to be filed with the annual statement on
or before March 1, 2003;
(H)
Texas Supplemental A for County Mutuals (Texas edition)
(required of Texas county mutual companies), to be filed with the annual statement
on or before March 1, 2003; and
(I)
Texas Supplemental Form-Number of Persons Covered Under
Texas Health Policies), as an attachment to the Texas state page of the annual
statement.
(3)
Reports or electronic data filings via the Internet filed
only with the NAIC:
(A)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business), to be filed
on or before March 1, 2003;
(B)
Trusteed Surplus Statement (association edition) (required
of the U. S. branch of an alien insurer), to be filed on or before May 15,
August 15, November 15, 2002, and March 1, 2003 with the annual statement;
(C)
Supplement "A" to Schedule T, Exhibit of Medical Malpractice
Premiums Written (association edition) (required of companies writing medical
malpractice business), to be filed on or before March 1, 2003;
(D)
Insurance Expense Exhibit (association edition), to be
filed on or before April 1, 2003;
(E)
Credit Insurance Experience Exhibit (association edition)
(required of companies writing credit accident and/or health business), to
be filed on or before April 1, 2003;
(F)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2003;
(G)
Financial Guaranty Insurance Exhibit (association edition)
(required of companies writing financial guaranty business), to be filed on
or before March 1, 2003;
(H)
Supplemental Investment Risks Interrogatories, to be filed
on or before April 1, 2003;
(I)
Electronic data filings via the Internet containing annual
statement data, to be filed on or before March 1, 2003;
(J)
Electronic data filings via the Internet containing combined
annual statement data, to be filed on or before May 1, 2003; and
(K)
Electronic data filings via the Internet containing quarterly
statement data, to be filed on or before May 15, August 15, and November 15,
2002.
(f)
Requirements for fraternal benefit societies. Each fraternal
benefit society shall complete and file the following blanks, forms, and electronic
data filings for the 2002 calendar year and the three quarters for the 2002
calendar year. The forms and reports identified in paragraphs (1)(A)-(D),
(2)(A)-(C), and (3)(A)-(D), (F) and (G) of this subsection shall be completed
in accordance with the 2002 NAIC Annual Statement Instructions, Fraternal.
The electronic data filings with the NAIC via the Internet identified in paragraph
(3)(E) of this subsection shall be in accordance with the NAIC data specifications
and instructions and shall include PDF format filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
Annual Statement, Fraternal (association edition), to be
filed on or before March 1, 2003;
(B)
Annual Statement of the Separate Accounts, Fraternal, (association
edition) (required of companies maintaining separate accounts), to be filed
on or before March 1, 2003;
(C)
Management's Discussion and Analysis, to be filed on or
before April 1, 2003; and
(D)
Actuarial Opinion to be filed with the annual statement.
(2)
Reports to be filed only with the department:
(A)
Fraternal Quarterly statement (association edition), to
be filed on or before May 15, August 15, and November 15, 2002;
(B)
Supplemental Compensation Exhibit (association edition)
(required of Texas domestic companies only), to be filed on or before March
1, 2003;
(C)
Fraternal Benefit Societies Supplement to Valuation Report
(association edition) to be filed on or before June 30, 2003; and
(D)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2003;
(E)
Analysis of Surplus (Texas Edition) for fraternal benefit
societies to be filed on or before March 1, 2003; and
(F)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), to be filed
with the annual statement on or before March 1, 2003.
(3)
Reports and diskettes or electronic data filings via the
Internet to be filed only with the NAIC:
(A)
Trusteed Surplus Statement (association edition, Fraternal
Supplement) (required of the U. S. branch of an alien insurer), to be filed
on or before March 1, 2003 with the annual statement;
(B)
Medicare Supplement Insurance Exhibit (association edition)
(for insurers writing Medicare supplement business) to be filed on or before
March 1, 2003;
(C)
Long-Term Care Insurance Exhibit (association edition)
(required of companies writing long-term care business), to be filed on or
before March 1, 2003;
(D)
Long-Term Care Experience Reporting Forms (association
edition) (required of companies writing long-term care business), to be filed
on or before April 1, 2003;
(E)
Electronic data filings via the Internet containing annual
statement data, to be filed on or before March 1, 2003; and
(F)
Fraternal Interest Sensitive Life Insurance Products Report
(association edition) (required of companies writing interest sensitive products),
to be filed on or before April 1, 2003.
(G)
Supplemental Investment Risks Interrogatories, due on or
before April 1, 2003.
(g)
Requirements for title insurers. Each title insurance company
shall complete and file the following blanks and forms for the 2002 calendar
year and the three quarters of the 2002 calendar year. The reports and forms
identified in paragraphs (1)(A)-(C), (2)(A)-(C), and (3)(A) of this subsection
shall be completed in accordance with the 2002 NAIC Annual Statement Instructions,
Title. The electronic version of the filings with the NAIC via the Internet
identified in paragraph (3)(B) of this subsection shall be in accordance with
the NAIC data specifications and instructions and shall include PDF format
filing.
(1)
Reports to be filed with the department and the NAIC:
(A)
Title Annual Statement (association edition), to be filed
on or before March 1, 2003;
(B)
Management's Discussion and Analysis, to be filed on or
before April 1, 2003; and
(C)
Actuarial Opinion to be filed on or before March 1, 2003;.
(2)
Reports to be filed only with the department:
(A)
Title Quarterly Statement (association edition), to be
filed on or before May 15, August 15, and November 15, 2002;
(B)
Supplemental Compensation Exhibit (association edition),
(required of Texas domestic companies only), to be filed on or before March
1, 2003; and
(C)
Schedule SIS, Stockholder Information Supplement (association
edition) (required of domestic stock companies which have 100 or more stockholders),
to be filed on or before March 1, 2003.
(D)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2003;
(E)
Analysis of Surplus (Texas Edition) for title companies
to be filed on or before March 1, 2003; and
(F)
Supplemental Investment Income Exhibit (Texas edition)
(shows percent of net investment income by type of investment), to be filed
with the annual statement on or before March 1, 2003;
(3)
Reports to be filed only with the NAIC:
(A)
Supplemental Investment Risk Interrogatories, to be filed
on or before April 1, 2003; and
(B)
Electronic data filings via the Internet containing annual
statement data, to be filed on or before March 1, 2003.
(h)
Requirements for health maintenance organizations. Each
health maintenance organization shall use the NAIC Health blank to file the
2002 annual and 2002 quarterly information. The forms and reports, identified
in paragraphs (1)(A)-(D); (2)(A); and (3)(C)-(E) of this subsection shall
be completed in accordance with the 2002 NAIC Annual and Quarterly Statement
Instructions, Health. The actuarial opinion shall include the additional requirements
of the department set forth in paragraph (1)(D) of this subsection. The forms,
reports, and diskettes identified in paragraphs (1)(A) and (B), and (2)(B),
(C), and (D) of this subsection shall be completed in accordance with instructions
provided by the department. The electronic data filings with the NAIC via
the Internet identified in paragraph (3)(A) and (B) of this subsection shall
be in accordance with NAIC data specifications and instructions and shall
include PDF format filing.
(1)
Reports to be filed both with the department and the NAIC:
(A)
2002 Health Annual Statement (association edition), to
be filed on or before March 1, 2003;
(B)
NAIC Health Quarterly Statements (association edition),
on or before May 15, August 15, and November 15, 2002. As part of each quarterly
filing, include a completed copy of Schedule E - part 2 - Special Deposits,
from the 2002 NAIC Health Annual Statement;
(C)
Management's Discussion and Analysis, to be filed on or
before April 1, 2003;
(D)
Actuarial Opinion to be filed with the annual statement.
In addition to the requirements set forth in the 2002 NAIC Annual Statement
Instructions, Health, the department requires that the actuarial opinion include
the following:
(i)
The statement of actuarial opinion must include assurance
that an actuarial report and underlying actuarial workpapers supporting the
actuarial opinion will be maintained at the company and available for examination
for seven years. The foregoing must be available by May 1 of the year following
the year-end for which the opinion was rendered or within two weeks after
a request from the commissioner. The suggested wording used will depend on
whether the actuary is employed by the company or is a consulting actuary.
The wording for an actuary employed by the company should be similar to the
following: "An actuarial report and any underlying actuarial workpapers supporting
the findings expressed in this Statement of Actuarial Opinion will be retained
for a period of seven years in the administrative offices of the company and
available for regulatory examination." The wording for a consulting actuary
retained by the company should be similar to the following: "An actuarial
report and any underlying actuarial workpapers supporting the findings expressed
in this Statement of Actuarial Opinion have been provided to the company to
be retained for a period of seven years in the administrative offices of the
company and available for regulatory examination."
(ii)
Under the scope paragraph requirements of section 5 of
the instructions relating to the Actuarial Certification in the 2002 NAIC
Annual Statement Instructions, Health, the department requires that the actuarial
opinion specifically list the premium deficiency reserve as an item and disclose
the amount of such reserve.
(2)
Reports to be filed only with the department:
(A)
Supplemental Compensation Exhibit (association edition),
(required of Texas domestic companies only), to be filed on or before March
1, 2003;
(B)
HMO Supplement (Texas edition), to be filed quarterly on
or before May 15, August 15, November 15, 2002;
(C)
Department formatted diskettes containing annual statement
data (diskettes provided by the department for entering of health maintenance
organization financial statement data), to be completed according to the instructions
provided by the department and filed with the department on or before March
1, 2003; and
(D)
Department formatted diskettes containing quarterly statement
data (diskettes provided by the department for entering of health maintenance
organization financial statement data), to be completed according to the instructions
provided by the department and filed with the department on or before May
15, August 15, and November 15, 2002.
(E)
Texas Overhead Assessment Form (Texas edition) (required
of Texas domestic companies only), to be filed on or before March 1, 2003;
and
(F)
HMO Supplement 2002 Annual Data (Texas edition), to be
filed on or before March 1, 2003.
(3)
Reports and electronic data filings via the Internet to
be filed only with the NAIC.
(A)
Diskettes or electronic data filings via the Internet containing
annual statement data, to be filed on or before March 1, 2003;
(B)
Diskettes or electronic data filings via the Internet containing
quarterly statement data, to be filed on or before May 15, August 15, and
November 15, 2002;.
(C)
Medicare Supplement Insurance Experience Exhibit (association
edition) (for insurers writing Medicare supplement business) to be filed on
or before March 1, 2003;
(D)
Long-Term Care Experience Reporting Form (association edition)
(for those insurers writing long-term care), to be filed on or before April
1, 2003;
(E)
Supplemental Investment Risk Interrogatories, to be filed
on or before April 1, 2003.
(i)
Requirements for farm mutual insurers not subject to the
provisions of subsection (e) of this section relating to filing requirements
for property and casualty insurers. Each farm mutual insurance company shall
file the following completed blanks and forms for the 2002 calendar year with
the department only, on or before March 1, 2003:
(1)
Annual statement (Texas edition);
(2)
Texas Overhead Assessment Form (Texas edition);
(3)
Actuarial Opinion, unless otherwise exempted.
(j)
Requirements for statewide mutual assessment companies,
local mutual aid and mutual burial associations, and exempt companies. Each
statewide mutual assessment company, local mutual aid association, local mutual
burial association, and exempt company shall complete and file the following
blanks and forms for the 2002 calendar year with the department only, on or
before April 1, 2003:
(1)
Annual Statement (Texas Edition) (exempt companies are
required to complete all pages except lines 22, 23, 24, 25, and 26 on page
3, the special instructions at the bottom of page 3, and pages 4 - 7);
(2)
Texas Overhead Assessment Form (Texas edition);
(3)
Release of Contributions Form (Texas edition);
(4)
3 1/2 % Chamberlain Reserve Table (Reserve Valuation) (Texas
edition);
(5)
Reserve Summary (1956 Chamberlain Table 3 1/2 %) (Texas
edition);
(6)
Inventory of Insurance in Force by Age of Issue or Reserving
Year (Texas edition); and
(7)
Summary of Inventory of Insurance in Force by Age and Calculation
of Net Premiums (Texas edition).
(k)
Requirements for Non-profit Legal Service Corporations.
Each non-profit legal service corporation doing business as authorized by
a certificate of authority issued under the Insurance Code Chapter 23 shall
complete and file the following blanks and forms for the 2002 calendar year
with the department only. An actuarial opinion is not required. The following
forms are required to be filed on or before March 1, 2003:
(1)
Annual Statement (Texas edition);
(2)
Texas Overhead Assessment Form (Texas edition);
(l)
Requirements for Mexican casualty companies. Each Mexican
casualty company doing business as authorized by a certificate of authority
issued under the Insurance Code Article 8.24, shall complete and file the
following blanks and forms for the 2002 calendar year with the department
only. All submissions shall be printed or typed in English and all monetary
values shall be clearly designated in United States dollars. The form identified
in paragraph (1) of this subsection shall be completed in accordance with
the 2002 NAIC Annual Statement Instructions, Property and Casualty, except
as provided by this subsection. An actuarial opinion is not required. It is
the express intent of this subsection that it shall not repeal or otherwise
modify or amend any department rule or the Insurance Code. The following blanks
or forms are to be filed on or before March 1, 2003:
(1)
Annual Statement (association edition); provided, however,
only pages 1 - 4, 24, and 108 are required to be completed;
(2)
A copy of the balance sheet and the statement of profit
and loss from the Mexican financial statement (printed or typed in English);
(3)
A copy of the official documents issued by the COMISION
NACIONAL DE SEGUROS Y FIANZAS approving the 2002 annual statement; and
(4)
A copy of the current license to operate in the Republic
of Mexico.
(m)
Other financial reports. Nothing in this section prohibits
the department from requiring any insurer or other regulated entity from filing
other financial reports with the department.
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 May 30, 2002.
TRD-200203343
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: July 14, 2002
For further information, please call: (512) 463-6327
Subchapter J. PHYSICIAN AND PROVIDER CONTRACTS AND ARRANGEMENTS
:
]
(A)
within 45 calendar days after
the date on which the claim for payment is received by the insurer with the
documentation reasonably necessary to process the claim; or]
(B)
within a specified number
of calendar days, which number has been agreed upon by the parties and included
in the contract, after the date on which the claim for payment is received
by the insurer with the documentation reasonably necessary to process the
claim.]
Chapter 5.
PROPERTY AND CASUALTY INSURANCE
a
] policy issued for
an insurer
[
a company in receivership or conservatorship
] for which a reinsurance
assumption
agreement
has been
approved by a [
court order,
] commissioner's order
pursuant to 28 Texas Administrative Code §7.604
[
, or board order applies
]. For utilization under this section,
the
Texas Department of Insurance
[
State Board of Insurance
] adopts by reference a certificate of assumption form which is published
by the
Texas Department of Insurance
[
State Board of Insurance
] and available from the Automobile [
and Miscellaneous Lines
]
Division
, P.O. Box 149104, Mail Code 104-1A, Austin, Texas 78714-9104.
[
of the State Board of Insurance, 1110 San Jacinto Boulevard,
Austin, Texas 78701-1998.
]
Chapter 7.
CORPORATE AND FINANCIAL REGULATION
Chapter 11.
HEALTH MAINTENANCE ORGANIZATIONS