TITLE 28.INSURANCE

Part 1. TEXAS DEPARTMENT OF INSURANCE

Chapter 3. LIFE, ACCIDENT AND HEALTH INSURANCE AND ANNUITIES

The Commissioner of Insurance adopts the repeal of §3.309, concerning minimum reserves for indeterminate premium reduction policies and §§3.1201-3.1204, concerning minimum valuation standards for plans with varying nonforfeiture benefits. The repeal of the sections is adopted without changes to the proposal as published in the November 8, 2002 issue of the Texas Register (27 TexReg 10555).

The repeal of §3.309 eliminates an obsolete provision. The repeal of §§3.1201-3.1204 eliminates differences between the repealed sections and §7.18 which adopts the National Association of Insurance Commissioners Accounting Practices and Procedures Manual (Manual). Actuarial Guideline XXXIII in the Manual also prescribes minimum valuation standards for plans with varying nonforfeiture benefits. The repeal of the sections will further the objective of the Manual to codify statutory accounting guidance into a single source to improve consistency in the regulations applicable to the accounting standards, treatments and practices of insurers doing business in Texas.

The repeal of the sections provides improved consistency in the regulations applicable to the accounting standards, treatments and practices of insurers doing business in Texas as well as enhanced comparability of financial statements of insurers domiciled in different states.

No comments were received regarding the proposed repeal.

Subchapter D. INDETERMINATE PREMIUM REDUCTION POLICIES

28 TAC §3.309

The repeal of the sections is adopted under the Insurance Code Article 3.28 and §36.001. Article 3.28 is the Standard Valuation Law for life insurance policies. Article 3.28, §§3 and 11 authorize the Commissioner to adopt actuarial tables and regulations concerning computations under the Standard Valuation Law. Section 36.001 authorizes the Commissioner to adopt rules for the conduct and execution of the duties and functions of the department as authorized by statute.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 14, 2003.

TRD-200301186

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: March 6, 2003

Proposal publication date: November 8, 2002

For further information, please call: (512) 463-6327

Subchapter M. MINIMUM VALUATION STANDARDS FOR PLANS WITH VARYING NONFORFEITURE BENEFITS

28 TAC §§3.1201 - 3.1204

The repeal of the sections is adopted under the Insurance Code Article 3.28 and §36.001. Article 3.28 is the Standard Valuation Law for life insurance policies. Article 3.28, §§3 and 11 authorize the Commissioner to adopt actuarial tables and regulations concerning computations under the Standard Valuation Law. Section 36.001 authorizes the Commissioner to adopt rules for the conduct and execution of the duties and functions of the department as authorized by statute.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 14, 2003.

TRD-200301187

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: March 6, 2003

Proposal publication date: November 8, 2002

For further information, please call: (512) 463-6327

Chapter 7. CORPORATE AND FINANCIAL REGULATION

Subchapter D. RISK-BASED CAPITAL AND SURPLUS

28 TAC §7.401, §7.410

The Commissioner of Insurance adopts amendments to §7.401 and §7.410 concerning risk-based capital and surplus requirements. The amended sections are adopted without changes to the proposed text as published in the November 8, 2002 issue of the Texas Register (27 TexReg 10558) and will not be republished.

The amendments to §7.401 and §7.410 are necessary to adopt by reference the risk-based capital reports developed by the National Association of Insurance Commissioners (NAIC) that insurers must file with the Department in 2003. The amended sections adopt the 2002 NAIC Life Risk-Based Capital Report Including Overview and Instructions for Companies, the 2002 NAIC Fraternal Risk-Based Capital Report Including Overview and Instructions for Companies and the 2002 NAIC Property and Casualty Risk-Based Capital Report Including Overview and Instructions for Companies. The Department uses the risk-based capital reports to enhance comparability of financial reports and provide a consistent regulatory environment for insurers that operate in more than one state.

The risk-based capital requirement is a method of ensuring that an insurer has an appropriate level of policyholders surplus after taking into account the underwriting, financial, and investment risks of an insurer. The formulas provided by §7.401 and §7.410 provide the Department with a widely used regulatory tool to identify the minimum amount of capital and surplus appropriate for an insurance company to support its overall business operations in consideration of its size and risk exposure. The amended sections will enable the Department to more efficiently and effectively utilize existing resources in the review of companies’ financial condition, to more efficiently monitor solvency regulation of the insurers subject to the amended sections, and to implement the most current risk-based capital requirements.

No comments were received regarding adoption of the amendments.

The amended sections are adopted under the Insurance Code Articles 1.10, 1.32, 2.01, 2.02, 2.20, 3.02, 10.30, 21.21, and 22.13 and §36.001. Article 1.10, §5 addresses the duties of the department when an insurer’s solvency is impaired. Article 1.32 authorizes the commissioner to fix standards for evaluating the financial condition of an insurer. Articles 2.01, 2.02 and 2.20 provide that the commissioner may adopt rules to require an insurer to maintain capital and surplus levels in excess of statutory levels to assure financial solvency of insurers for the protection of policyholders and insurers. Article 3.02 authorizes the commissioner to issue rules designed to ensure the financial solvency of companies for the protection of policyholders. Article 10.30 authorizes the commissioner to require fraternal benefit societies to submit reports the commissioner deems necessary. Article 21.21, §13 authorizes the commissioner to adopt rules necessary to regulate trade practices in the business of insurance. Article 22.13 authorizes the commissioner to adopt rules regarding the minimum capital and surplus for certain insurers. Section 36.001 authorizes the commissioner to adopt rules for the conduct and execution of the duties and functions of the department.

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 February 14, 2003.

TRD-200301185

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: March 6, 2003

Proposal publication date: November 8, 2002

For further information, please call: (512) 463-6327

Chapter 11. HEALTH MAINTENANCE ORGANIZATIONS

The Commissioner of Insurance adopts amendments to §11.2 concerning definitions and §11.809 concerning financial requirements for health maintenance organizations and certain insurers (health insurers). The amended sections are adopted with changes to the proposed text as published in the November 8, 2002 issue of the Texas Register (27 TexReg 10560).

The amendments to §11.2 and §11.809 are necessary to adopt by reference the risk-based capital report (RBC report) that health insurers must file with the Department in 2003. The amendment to §11.2 recognizes a change in the name of the RBC report to National Association of Insurance Commissioners Health Risk-Based Capital Report including Overview and Instructions for Companies. The amendment to §11.809 adopts the 2002 version of the RBC Report and adds insurers that file the Health Annual Statement adopted under §7.65 of this title (relating to Requirements for Filing the 2002 Quarterly and 2002 Annual Statements, Other Reporting Forms, and Electronic Data Filings with the NAIC). Previously the section only applied to health maintenance organizations (HMOs). The amendment to §11.809 also deletes the phase-in period in subsection (b) since it has expired and a reference to the phase-in period in subsection (e).

Insurance Code Articles 2.20, 3.02 and 20A.13C authorize the commissioner to adopt rules requiring insurers and HMOs operating in this state to maintain a specified net worth based on the risks inherent in its method of operation to assure financial solvency. This is referred to as risk-based capital. Risk-based capital is a method of measuring the minimum amount of capital appropriate for a health insurer to support its overall business operations in consideration of its size and risk profile. A health insurer's risk-based capital is calculated by applying factors to various asset, premium and reserve items. The factor is higher for those items with greater underlying risk and lower for less risky items. The department uses the formula in the RBC report to measure the adequacy of a health insurer's capital by comparing its total adjusted capital to its risk-based capital determined by the RBC report. Use of the RBC report provides for greater protection to the public from the risk of insolvency of a health insurer. The risk-based capital formula provides the department an important tool in evaluating the financial condition of a health insurer. The proposed amendment to §11.2 mistakenly amended the definition of "RBC" instead of the definition of "RBC Report." The purpose of the amendment was to recognize the change in the name of the RBC report and make it unnecessary to amend the definition each year to change the year of the RBC Report. The proposed amendment should have proposed "Health" as the new name and deleted "Managed Care Organizations" and added a reference to §11.809 while deleting "1999" so it would not be necessary to amend the definition each year to reflect the year of the RBC Report. As published it was clear the proposed amendment concerned the RBC report and the new language was published. The proposal failed to reflect that "1999 Managed Care Organization" would be deleted; however, the proposed definition was unmistakable and the deletion could be naturally inferred, offering any reader the opportunity to comment. The change to the proposed amendment is not a substantive change. It does not introduce any new matters, affect any new persons or add any new cost factors. The adopted section reflects the amendment as it was intended with the definition of "RBC Report" being amended and the definition of "RBC" unamended. In addition, the amendment to §11.809 was changed to delete language in subsection (e) that referenced the phase-in provisions in subsection (b) which have expired and are deleted in the adopted section. The language is unnecessary since the referenced provisions have been deleted.

No comments were received regarding the proposed amendments.

Subchapter A. GENERAL PROVISIONS

28 TAC §11.2

The amendments are adopted under Insurance Code Articles 2.20, 3.02, 20A.13C, 20A.22, 21.21 and Insurance Code, §36.001. Articles 2.20 and 3.02 authorize the commissioner to adopt rules to require an insurer to maintain capital and surplus levels in excess of statutory levels to assure financial solvency of insurers. Article 20A.13C authorizes the commissioner to adopt rules to establish guidelines requiring an HMO to maintain a specified net worth based on the risks inherent in its method of operation. Article 20A.22 authorizes the commissioner to adopt reasonable regulations necessary and proper to carry out Insurance Code, Chapter 20A. Article 21.21 authorizes the commissioner to adopt rules concerning unfair methods of competition. Section 36.001(a) provides the commissioner with the authority to adopt rules for the conduct and execution of the powers and duties of the department only as authorized by a statute.

§11.2.Definitions.

(a) The definitions found in the Texas Health Maintenance Organization Act, §2, as amended, codified in Texas Insurance Code Article 20A.02, are hereby incorporated into this chapter.

(b) The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.

(1) Act--The Texas Health Maintenance Organization Act, Senate Bill 180, enacted by Acts 1975, 64th Legislature, Chapter 214, pages 514-530, first effective December 1, 1975, as amended, codified as the Texas Insurance Code Chapter 20A.

(2) Admitted assets--All assets as defined by statutory accounting principles, as permitted and valued in accordance with §11.803 of this title (relating to Investments, Loans, and Other Assets).

(3) Adverse determination--A determination upon utilization review that the health care services furnished or adopted to be furnished to a patient are not medically necessary or not appropriate.

(4) Affiliate--A person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(5) Agent--As defined in the Insurance Code Articles 20A.15 and 20A.15A, unless the context of the rule clearly indicates applicability to any agents licensed under one specific article.

(6) ANHC or approved nonprofit health corporation--A nonprofit health corporation certified under Medical Practice Act §5.01(a) (Texas Civil Statutes, Article 4495b).

(7) Basic health care service--Health care services which an enrolled population might reasonably require to maintain good health, including, without limitations as to time and cost, those benefits as prescribed in §§11.508 and 11.509 of this title (relating to Mandatory Benefit Standards: Group, Individual and Conversion Agreements, and Additional Mandatory Benefit Standards - Group Agreement Only), other than those limitations specifically prescribed in this title.

(8) Code--The Texas Insurance Code, 1951, as amended.

(9) Contract holder--An individual, association, employer, trust or organization to which an individual or group contract for health care services has been issued.

(10) Control--As defined in the Insurance Code Article 21.49-1.

(11) Controlled HMO--An HMO controlled directly or indirectly by a holding company.

(12) Controlled person--Any person, other than an HMO, who is controlled directly or indirectly by a holding company.

(13) Copayment--A charge in addition to premium to an enrollee for a service which is not fully prepaid.

(14) Credentialing--The process of collecting, assessing, and validating qualifications and other relevant information pertaining to a physician or provider to determine eligibility to deliver health care services.

(15) Dentist--An individual provider licensed to practice dentistry by the Texas State Board of Dental Examiners.

(16) General hospital--A licensed establishment that:

(A) offers services, facilities, and beds for use for more than 24 hours for two or more unrelated individuals requiring diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy; and

(B) regularly maintains, at a minimum, clinical laboratory services, diagnostic X-ray services, treatment facilities including surgery or obstetrical care or both, and other definitive medical or surgical treatment of similar extent.

(17) HMO--A health maintenance organization as defined in Insurance Code Article 20A.02(n).

(18) Health status related factor--Any of the following in relation to an individual:

(A) health status;

(B) medical condition (including both physical and mental illnesses);

(C) claims experience;

(D) receipt of health care;

(E) medical history;

(F) genetic information;

(G) evidence of insurability (including conditions arising out of acts of domestic violence, including family violence as defined by the Insurance Code Article 21.21-5); or

(H) disability.

(19) Individual provider--Any person, other than a physician or institutional provider, who is licensed or otherwise authorized to provide a health care service. Includes, but is not limited to, licensed doctor of chiropractic, dentist, registered nurse, advanced practice nurse, physician assistant, pharmacist, optometrist, registered optician, and acupuncturist.

(20) Institutional provider--A provider that is not an individual. Includes any medical or health related service facility caring for the sick or injured or providing care or supplies for other coverage which may be provided by the HMO. Includes but is not limited to:

(A) General hospitals,

(B) Psychiatric hospitals,

(C) Special hospitals,

(D) Nursing homes,

(E) Skilled nursing facilities,

(F) Home health agencies,

(G) Rehabilitation facilities,

(H) Dialysis centers,

(I) Free-standing surgical centers,

(J) Diagnostic imaging centers,

(K) Laboratories,

(L) Hospice facilities,

(M) Infusion services centers,

(N) Residential treatment centers,

(O) Community mental health centers,

(P) Urgent care centers, and

(Q) Pharmacies.

(21) Limited provider network--A subnetwork within an HMO delivery network in which contractual relationships exist between physicians, certain providers, independent physician associations and/or physician groups which limit the enrollees’ access to only the physicians and providers in the subnetwork.

(22) Limited service HMO--An HMO which has been issued a certificate of authority to issue a limited service health care plan as defined in the Insurance Code Article 20A.02(l).

(23) Out of area benefits--Benefits that the HMO covers when its enrollees are outside the geographical limits of the HMO service area.

(24) Pathology services--Services provided by a licensed laboratory which has the capability of evaluating tissue specimens for diagnoses in histopathology, oral pathology, or cytology.

(25) Pharmaceutical services--Services, including dispensing prescription drugs, as defined in the Pharmacy Act, Texas Civil Statutes, Article 4542a-1, §5 that are ordinarily and customarily rendered by a pharmacy or pharmacist.

(26) Pharmacist--An individual provider licensed to practice pharmacy under the Pharmacy Act, Texas Civil Statutes, Article 4542a-1.

(27) Pharmacy--A facility licensed under the Pharmacy Act, Texas Civil Statutes, Article 4542a-1 §29.

(28) Premium--The prospectively determined rate that is paid by or on behalf of an enrollee for specified health services.

(29) Primary care physician or primary care provider--A physician or individual provider who is responsible for providing initial and primary care to patients, maintaining the continuity of patient care, and initiating referral for care.

(30) Primary HMO--An HMO that contracts directly with, and issues an evidence of coverage to, individuals or organizations to arrange for or provide a basic, limited, or single health care service plan to enrollees on a prepaid basis.

(31) Provider HMO--An HMO that contracts directly with a primary HMO to provide or arrange to provide health care services on behalf of the primary HMO within the primary HMO’s defined service area.

(32) Psychiatric hospital--A licensed hospital which offers inpatient services, including treatment, facilities and beds for use beyond 24 hours, for the primary purpose of providing psychiatric assessment and diagnostic services and psychiatric inpatient care and treatment for mental illness. Such services must be more intensive than room, board, personal services, and general medical and nursing care. Although substance abuse services may be offered, a majority of beds must be dedicated to the treatment of mental illness in adults and/or children.

(33) Qualified HMO--An HMO which has been federally approved under Title XIII of the Public Health Service Act, Public Law 93-222, as amended.

(34) Quality improvement--A system to continuously examine, monitor and revise processes and systems that support and improve administrative and clinical functions.

(35) Recredentialing--The periodic process by which:

(A) qualifications of physicians and providers are reassessed;

(B) performance indicators, including utilization and quality indicators, are evaluated; and

(C) continued eligibility to provide services is determined.

(36) Reference laboratory--A licensed laboratory that accepts specimens for testing from outside sources and depends on referrals from other laboratories or entities. HMOs may contract with a reference laboratory to provide clinical diagnostic services to their enrollees.

(37) Reference laboratory specimen procurement services--The operation utilized by the reference laboratory to pick up the lab specimens from the client offices or referring labs, etc. for delivery to the reference laboratory for testing and reporting.

(38) Referral specialists (other than primary care)--Physicians or individual providers who set themselves apart from the primary care physician or primary care provider through specialized training and education in a health care discipline.

(39) Schedule of charges--Specific rates or premiums to be charged for enrollee and dependent coverages.

(40) Service area--A geographic area within which direct service benefits are available and accessible to HMO enrollees who live, reside or work within that geographic area and which complies with §11.1606 of this title (relating to Organization of an HMO).

(41) Single service HMO--An HMO which has been issued a certificate of authority to issue a single health care service plan as defined in the Insurance Code Article 20A.02(y).

(42) Special hospital--A licensed establishment that:

(A) offers services, facilities and beds for use for more than 24 hours for two or more unrelated individuals who are regularly admitted, treated and discharged and who require services more intensive than room, board, personal services, and general nursing care;

(B) has clinical laboratory facilities, diagnostic X-ray facilities, treatment facilities or other definitive medical treatment;

(C) has a medical staff in regular attendance; and

(D) maintains records of the clinical work performed for each patient.

(43) Statutory surplus--Admitted assets minus accrued uncovered liabilities.

(44) Subscriber--If conversion or individual coverage, the individual who is the contract holder and is responsible for payment of premiums to the HMO; or if group coverage, the individual who is the certificate holder and whose employment or other membership status, except for family dependency, is the basis for eligibility for enrollment in the HMO.

(45) Subsidiary--An affiliate controlled by a specified person directly or indirectly through one or more intermediaries.

(46) Telehealth service--As defined in Section 57.042, Utilities Code.

(47) Telemedicine medical service--As defined in Section 57.042, Utilities Code.

(48) Urgent care--Health care services provided in a situation other than an emergency which are typically provided in a setting such as a physician or individual provider’s office or urgent care center, as a result of an acute injury or illness that is severe or painful enough to lead a prudent layperson, possessing an average knowledge of medicine and health, to believe that his or her condition, illness, or injury is of such a nature that failure to obtain treatment within a reasonable period of time would result in serious deterioration of the condition of his or her health.

(49) Utilization review--A system for prospective or concurrent review of the medical necessity and appropriateness of health care services being provided or adopted to be provided to an individual within this state. Utilization review shall not include elective requests for clarification of coverage.

(50) Voting security--As defined in the Insurance Code Article 21.49-1, including any security convertible into or evidencing a right to acquire such security.

(51) NAIC--National Association of Insurance Commissioners.

(52) Annual financial statement--The annual statement to be used by HMOs, as promulgated by the NAIC and as adopted by the commissioner under Insurance Code Articles 1.11 and 20A.10.

(53) RBC--Risk-based capital.

(54) RBC formula--NAIC risk-based capital formula.

(55) Authorized control level--The number determined under the RBC formula in accordance with the RBC instructions.

(56) RBC Report--Health Risk-Based Capital Report including Overview and Instructions for Companies published by the NAIC and adopted by reference in §11.809 of this title (relating to Risk-Based Capital for HMOs and Insurers Filing the NAIC Health Blank).

(57) Total adjusted capital--An HMO's statutory capital and surplus/total net worth as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed pursuant to the Insurance Code, and such other items, if any, as the RBC instructions provide.

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 February 14, 2003.

TRD-200301183

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: March 6, 2003

Proposal publication date: November 8, 2002

For further information, please call: (512) 463-6327

Subchapter I. FINANCIAL REQUIREMENTS

28 TAC §11.809

The amendments are adopted under Insurance Code Articles 2.20, 3.02, 20A.13C, 20A.22, 21.21 and Insurance Code, §36.001. Articles 2.20 and 3.02 authorize the commissioner to adopt rules to require an insurer to maintain capital and surplus levels in excess of statutory levels to assure financial solvency of insurers. Article 20A.13C authorizes the commissioner to adopt rules to establish guidelines requiring an HMO to maintain a specified net worth based on the risks inherent in its method of operation. Article 20A.22 authorizes the commissioner to adopt reasonable regulations necessary and proper to carry out Insurance Code, Chapter 20A. Article 21.21 authorizes the commissioner to adopt rules concerning unfair methods of competition. Section 36.001(a) provides the commissioner with the authority to adopt rules for the conduct and execution of the powers and duties of the department only as authorized by a statute.

§11.809.Risk-Based Capital for HMOs and Insurers Filing the NAIC Health Blank.

(a) Health Maintenance Organizations. This section applies to all domestic and foreign HMOs subject to the provisions of the Insurance Code, Chapter 20A.

(b) Health insurers. Insurers that file the NAIC Health Blank with the department under §7.65 of this title (relating to Requirements for Filing the 2002 Quarterly and 2002 Annual Statements, Other Reporting Forms, and Electronic Data Filings with the NAIC) are required to file the RBC Report adopted by reference in this section.

(c) Adoption of RBC formula by reference and filing requirements. The commissioner adopts by reference the 2002 NAIC Health Risk-Based Capital Report including Overview and Instructions for Companies which includes the RBC formula and the required diskettes. All HMOs and health insurers subject to this section are required to file the diskettes with the NAIC in accordance with and by the due date specified in the RBC instructions. The printed RBC Report should be available to the department on request.

(d) Conflicts. In the event of a conflict between the Insurance Code, any currently existing rule of the department or any specific requirement of this section, and the RBC formula and/or the RBC instructions, the Insurance Code, rule or specific requirement of this section shall take precedence and in all respects control. It is the express intent of this section that the adoption by reference of the RBC instructions does not repeal or modify or amend any rule of the department or the Insurance Code.

(e) Actions of commissioner. The commissioner may take the following actions against an HMO that fails to maintain, at a minimum, 70% of the authorized control level risk-based capital in the RBC Report as calculated in accordance with the RBC instructions:

(1) order the HMO to cease writing new business;

(2) place the HMO in supervision or conservation;

(3) find the HMO to be in hazardous financial condition as provided by the Insurance Code Article 20.19 and §11.810 of this title (relating to Hazardous Conditions for HMOs);

(4) find the HMO to be in violation of the minimum net worth requirements of Insurance Code Article 20A.13C and take action as provided by Insurance Code Article 20A.31, or

(5) apply any sanctions provided by the Insurance Code or Title 28 of the Texas Administrative Code.

(f) Prohibition on Announcements. Except as otherwise required under the provisions of this section, the department believes that the comparison of an HMO's total adjusted capital to its risk-based capital is a regulatory tool which may indicate the need for corrective action with respect to the HMO and such a comparison is not intended as a means to rank HMOs generally; therefore, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to any component derived in the calculation, by any HMO, insurer, agent, broker or person engaged in any manner in the insurance business would be misleading and is, therefore, prohibited.

(g) Limitations. In no event, shall the requirements of this section reduce the amount of net worth, capital and/or surplus otherwise required by provisions of the Insurance Code or Texas Administrative Code, or by order of the commissioner.

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 February 14, 2003.

TRD-200301184

Gene C. Jarmon

General Counsel and Chief Clerk

Texas Department of Insurance

Effective date: March 6, 2003

Proposal publication date: November 8, 2002

For further information, please call: (512) 463-6327