28 TAC §5.9912
The Texas Department of Insurance proposes an amendment to §5.9912,
concerning the plan of operation of the Fair Access to Insurance Requirements
(FAIR) Plan Association. The Texas FAIR Plan Association was established by
Insurance Code Article 21.49A for the purpose of delivering residential property
insurance to qualified citizens of Texas in areas determined by the Commissioner
of Insurance to be underserved areas. The current Governing Committee, composed
of eleven voting members, five of whom represent insurers, four members of
the public, and two members who are licensed agents, has requested an amendment
to the Plan of Operation to clarify that all members may be reimbursed for
actual expenses. The FAIR Plan often has meetings which are not located in
the home town of the members and has been reimbursing members for their actual
expenses to attend meetings. It has recommended that §5.9912 be amended
by adding subsection (o) which provides for the reimbursement of reasonable
actual expenses to members of the Governing Committee.
Marilyn Hamilton, Associate Commissioner, Property and Casualty Program,
has determined that for each year of the first five years the proposed section
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 rule. There will be
no measurable effect on local employment or the local economy as a result
of the proposal.
Ms. Hamilton has also determined that for each of the first five years
the amended section is in effect, the public benefits anticipated as a result
of the proposed section will be that the pool of qualified persons willing
to serve on the Governing Committee of the FAIR Plan will be expanded since
it will be clear that members will not have to use personal funds to pay expenses
of attending meetings. An expanded pool of qualified persons willing to serve
will benefit the FAIR Plan Association and the public as well. The estimated
cost per member for reimbursement of actual reasonable expenses is approximately
$470.00 per year. This figure is based on the actual past expenses of members
who have incurred costs for hotel accommodations, travel and meals while attending
a FAIR Plan Association meeting. The total estimated annual cost for the FAIR
Plan Association would be $5,170 which is based on eleven members and annual
reimbursable expenses of $470 each. The Government Code §2006.001 defines
small business and microbusiness in pertinent part as a legal entity, including
a corporation, partnership, or sole proprietorship that is formed for the
purpose of making a profit. Since the FAIR Plan Association was not formed
for the purpose of making a profit, it does not meet the definition, and thus
it is not necessary to include a small or micro-business analysis in this
proposal.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on August 29, 2005 to Gene C. Jarmon, 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 Marilyn Hamilton, Associate Commissioner, Property
and Casualty Program, Mail Code 104 PC, Texas Department of Insurance, P.O.
Box 149104, Austin, Texas 78714-9104. A request for a public hearing should
be submitted separately to the Office of the Chief Clerk.
The amendment is proposed under the Insurance Code Article 21.49A
and §36.001. Article 21.49A, §3(a) authorizes the FAIR Plan Governing
Committee to propose amendments to the plan of operation and submit them to
the Commissioner of Insurance for approval. Article 21.49A charges the Commissioner
with the authority to supervise the Association and to approve and adopt by
rule the plan of operation developed by the Governing Committee. Section 36.001
provides that the Commissioner of Insurance may adopt any rules necessary
and appropriate to implement the powers and duties of the Texas Department
of Insurance under the Insurance Code and other laws of this state.
The following article is affected by this proposal: Insurance Code Article
21.49A
§5.9912.Governing Committee.
(a) - (n)
(No change.)
(o)
Members of the Governing Committee
may be reimbursed for their reasonable actual expenses incurred as a result
of serving as a member of the Governing Committee. The FAIR Plan Association
will establish procedures for reimbursement.
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 July 18, 2005.
TRD-200502914
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: August 28, 2005
For further information, please call: (512) 463-6327