Part 1. TEXAS DEPARTMENT OF INSURANCE
Chapter 1. GENERAL ADMINISTRATION
Subchapter E. NOTICE OF TOLL-FREE TELEPHONE NUMBERS AND PROCEDURES FOR OBTAINING INFORMATION AND FILING COMPLAINTS
The Commissioner of Insurance adopts new §1.602, concerning a notice to be given by insurers to policyholders regarding an Internet website providing information to consumers relating to the purchase of residential property insurance and personal automobile insurance. The new section is adopted without changes to the proposed text published in the November 9, 2007, issue of the Texas Register (32 TexReg 8093).
REASONED JUSTIFICATION. This new section is necessary to implement the provisions of SB 611, 80th Legislature, Regular Session, effective May 21, 2007, which adds Subchapter D to Chapter 32 of the Insurance Code. Subchapter D requires the Department and the Office of Public Insurance Counsel to establish and maintain a single website that provides information to enable consumers to make informed decisions relating to the purchase of residential property insurance and personal automobile insurance.
Section 32.104(b) of the Insurance Code requires specified insurers to provide notice of the Internet website required by Subchapter D in a conspicuous manner with each residential property insurance or personal automobile insurance policy issued or renewed in this state. Section 32.104(b) also requires the Commissioner of Insurance to determine the form and content of the notice. The adopted new section establishes the form and content of this notice.
The new section provides the text of the notice in English and Spanish for consistency with the notice currently required under §1.601 (relating to Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures). To allow for flexibility and cost containment, especially during the implementation process, the new section allows insurers to provide the required notice in one of two specified ways and also allows insurers to opt to provide the notice both ways. Insurers may provide the notice as part of the Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures required under §1.601 or otherwise in a conspicuous manner with each policy.
As provided by §32.104(b) of the Insurance Code, the new section applies only to insurers that comprise the top 25 insurance groups in the national market and that issue residential property insurance or personal automobile insurance policies in this state, including a Lloyd's plan, a reciprocal or interinsurance exchange, a county mutual insurance company, a farm mutual insurance company, the Texas Windstorm Insurance Association, the FAIR Plan Association, and the Texas Automobile Insurance Plan Association.
As required by SB 611, the notice requirement mandated by the new section applies to all policies that are delivered, issued for delivery, or renewed on or after January 1, 2008.
HOW THE SECTION WILL FUNCTION. Adopted §1.602(a) states the purpose and applicability of the new §1.602. It specifies which insurers are subject to the section and provides the effective date for the notice requirements mandated by the section.
Adopted §1.602(b) requires insurers to provide the required notice in one of two specified ways and also allows insurers to opt to provide the required notice both ways. Notwithstanding the requirements in §1.601(a)(3) of this title (relating to Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures) to the contrary, an insurer shall include the notice required in §1.602(b)(1) in English and Spanish. The text must be in at least 10-point type. If an insurer elects to comply with the new section by amending the notice required under §1.601 to include the requirements of this new section, the insurer need provide only the one notice to comply with both §1.601 and §1.602.
Alternatively, the insurer may provide the notice specified in adopted §1.602(b)(2) in English and Spanish to comply with the notice requirements. This notice is required to be provided in a conspicuous manner with each policy and to be printed in at least 10-point type.
As authorized by the Uniform Electronic Transactions Act (Business and Commerce Code, Chapter 43), which is addressed in Commissioner's Bulletin No. B-0002-02, dated January 16, 2002, insurers may provide the notice required by the new §1.602 in the form that their policyholders have opted to receive policies, including via e-mail.
SUMMARY OF COMMENTS AND AGENCY'S RESPONSE.
Comment: Several commenters raised concern that the January 1, 2008 effective date does not allow sufficient lead time for programming and implementation.
Agency Response: The effective date is statutorily mandated by SB 611. The Department recognizes the difficulties presented by the commenters but the law does not provide the Department waiver authority or the opportunity to excuse the application of the statute. The Department sees the language in SB 611 as unambiguous and the adopted section requirements are consistent with the legislation. Further, insurers can meet the notice requirement deadline by using an insert.
Comment: Several commenters asserted that the notice is premature. The new section mandates that insurers begin providing the notice on January 1, 2008, for a website that will not be available until September 1, 2008.
Agency Response: The Department recognizes the situation but the law does not provide the Department waiver authority or the opportunity to excuse the application of the statute. The Department sees the language in SB 611 as unambiguous and the adopted section requirements are consistent with the legislation. Further, the existing www.helpinsure.com website will be used. The website has been updated with links to the Office of Public Insurance Counsel's policy comparisons and the Department's current price comparisons for personal automobile and homeowners insurance.
Comment: Several commenters expressed concerns about providing the required notice with policies effective on or after January 1, 2008, which are sent out for renewal prior to January 1, 2008.
Agency Response: The Department recognizes that many insurers send out renewals up to 60 days prior to their effective dates. If an insurer sends out renewal notices prior to January 1, 2008, for policies effective on or after January 1, 2008, the insurer may provide the notice in a subsequent mailing to comply with §1.602. As authorized by the Uniform Electronic Transactions Act, the insurer may provide the notice to these policyholders in the form that the policyholders have opted to receive policies and other information from the insurer, including via e-mail.
Comment: One commenter opined that the required notice is attempting to go beyond the scope of the legislation and should apply only to new policies and not renewals due to the use of the term issued in Insurance Code §32.104(b). The commenter also suggested that the notice should be provided only with the first renewal.
Agency Response: SB 611 in section 3(b) clearly states that the §32.104(b) notice requirements apply to insurance policies that are "delivered, issued for delivery, or renewed" on or after January 1, 2008. The new requirements are consistent with SB 611.
Comment: One commenter questioned the applicability of the proposed section to the Texas Automobile Insurance Plan Association (TAIPA) because TAIPA does not issue insurance policies.
Agency Response: The Department recognizes that TAIPA assigns policyholders to authorized insurers that write automobile liability insurance in Texas and does not issue policies itself. However, under §1.602(a)(2), the top 25 insurance groups in the national market and who issue residential property insurance or personal automobile insurance policies in Texas are required to provide the notice to TAIPA risks that have been assigned to them.
Comment: One commenter requested clarification on how the new §1.602 would apply to Lloyd's plans, reciprocals, county mutuals, or other insurers.
Agency Response: In accordance with §32.101 of the Insurance Code, the new §1.602 applies to insurers that comprise the top 25 insurance groups in the national market and that issue residential property insurance or personal automobile insurance policies in Texas. Lloyd's plans, reciprocals or interinsurance exchanges, county mutual insurance companies, farm mutual insurance companies, and other insurers that are part of the top 25 insurance groups in the national market and issue residential property insurance or personal automobile insurance policies in Texas are required to comply with the new §1.602.
Comment: One commenter stated that the notice requirement in the proposed §1.602(b)(1) should be amended because it is confusing as to whether insurers are required to send either or both forms of the notice and whether they are required to send separate notices to comply with §1.601 and §1.602.
Agency Response: The Department disagrees that §1.602(b)(1) is confusing. Section 1.602(b) provides that each insurer specified in subsection (a)(2) must comply with either subsection (b)(1) or (b)(2), or may opt to comply with both. Further, §1.602(b)(1) states that an insurer may include the specified text in the notice required under §1.601(a)(3). Thus, if an insurer elects to comply with the new §1.602 by amending the notice required under §1.601, the insurer need provide only the one notice to comply with both §1.601 and §1.602.
Comment: One commenter requested that either the proposed §1.602 be amended or a new rule be published concerning data reporting under Insurance Code, Chapter 32, Subchapter D.
Agency Response: The Department disagrees with the comment. As provided in the new §1.602(a)(1), the purpose of the new §1.602 is to establish the form and content of the notice required under Insurance Code §32.104(b). Hence, the new §1.602 is limited in scope to the notice of the Internet website.
Comment: One commenter recommended that the term boldface in §1.602(b)(1) be replaced with bold face.
Agency Response: The Department has consulted the American Heritage Dictionary of the English Language, Fourth Edition (Houghton Mifflin Company, 2004) and determined that the term boldface is acceptable.
NAMES OF THOSE COMMENTING FOR AND AGAINST THE PROPOSAL. Neither for nor against, with recommended changes: Association of Fire and Casualty Companies of Texas, Allstate, Farmers Insurance Group, Insurance Council of Texas, Texas Automobile Insurance Plan Association.
STATUTORY AUTHORITY. The section is adopted pursuant to Insurance Code §32.104(b) and §36.001. Section 32.104(b) requires the Commissioner of Insurance to determine the form and content of the notice of the Internet website, which insurers are required to provide pursuant to §32.104(b) of the Insurance Code. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Department under the Insurance Code and other laws of this state.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on December 19, 2007.
TRD-200706490
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 8, 2008
Proposal publication date: November 9, 2007
For further information, please call: (512) 463-6327
Chapter 131. BENEFITS--LIFETIME INCOME BENEFITS
The Commissioner of Workers' Compensation (Commissioner), Texas Department of Insurance, Division of Workers' Compensation (Division), adopts the repeal of §131.1, concerning initiation of lifetime income benefits (LIBs). The repeal of this section is adopted without changes to the proposal published in the November 2, 2007, issue of the Texas Register (32 TexReg 7856), and as corrected in the proposal published in the November 16, 2007, issue of the Texas Register (32 TexReg 8358).
The repeal of this section is necessary for the Division to conform the provisions related to the initiation of lifetime income benefits to the Texas Court of Appeals' ruling in Mid-Century Insurance Company v. Texas Workers' Compensation Commission , 183 S.W.3d 754 (Tex.App - Austin 2006 no writ). The Mid-Century case held that lifetime income benefits are to be paid from the date an injured employee is determined to be entitled to lifetime income benefits but not prior to that date.
The adoption of the repeal will allow the Division to conform the provisions related to the initiation of lifetime income benefits to the Mid-Century ruling. The repeal will also clarify for stakeholders precisely when lifetime income benefits begin to accrue and are payable. This repealed rule will not be replaced with another rule. Labor Code §408.161 already provides that lifetime income benefits are paid until the death of an employee as a result of one of seven specified injuries. The remaining provisions of the rule are merely duplicative of the Texas Labor Code or other Division rules.
Comment: Commenters supported the repeal of §131.1.
Agency Response: The Division agrees the repeal of §131.1 is necessary. The repeal will assist in conforming provisions related to the initiation of lifetime income benefits to the court's ruling in Mid-Century Insurance Company v. Texas Workers' Compensation Commission , 183 S.W.3d 754 (Tex.App - Austin 2006 no writ).
Comment: A commenter recommends the Division clarify that the repeal is not retroactive and that a carrier may not seek dispute resolution in cases where lifetime income benefits are being paid and then seek reimbursement from the subsequent injury fund. The commenter further recommends that, if the proposed repeal is effective retroactively, the Division should state the specific date it becomes effective.
Agency Response: The Division agrees that the repeal of the rule is not retroactive and will become effective 20 days after the date on which the Commissioner's adoption is filed with the Secretary of State. Although adoption of the repeal will not be effective retroactively, the adopted repeal is intended to conform the rule to the current state of the law as determined by the Mid-Century ruling filed February 24, 2006. The other repealed provisions of §131.1 included unnecessary language that is reiterated or referenced in the Labor Code or addressed in other Division rules but has no new effect on the law.
For: Insurance Council of Texas and Boeing.
For with changes: One individual.
Against: None.
The repeal is adopted under Labor Code, §§408.161, 402.00111, and 402.061. Section 408.161 provides that lifetime income benefits are paid until the death of an employee for: (1) total and permanent loss of sight in both eyes; (2) loss of both feet at or above the ankle; (3) loss of both hands at or above the wrist; (4) loss of one foot at or above the ankle and the loss of one hand at or above the wrist; (5) an injury to the spine that results in permanent and complete paralysis of both arms, both legs, or one arm and one leg; (6) a physically traumatic injury to the brain resulting in incurable insanity or imbecility; or (7) third degree burns that cover at least 40 percent of the body and require grafting, or third degree burns covering the majority of either both hands or one hand and the face. Section 402.00111 provides that the Commissioner of Workers' Compensation shall exercise all executive authority, including rulemaking authority, under the Labor Code and other laws of this state. Section 402.061 provides the Commissioner the authority to adopt rules as necessary to implement and enforce the Texas Workers' Compensation Act.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency' legal authority.
Filed with the Office of the Secretary of State on December 20, 2007.
TRD-200706514
Norma Garcia
General Counsel
Texas Department of Insurance, Division of Workers' Compensation
Effective date: January 9, 2008
Proposal publication date: November 2, 2007
For further information, please call: (512) 804-4288
Subchapter G. PROSPECTIVE AND CONCURRENT REVIEW OF HEALTH CARE
The Commissioner of Workers' Compensation (Commissioner), Texas Department of Insurance, Division of Workers' Compensation (Division), adopts the repeal of §134.650 concerning Prospective Review of Medical Care Not Requiring Preauthorization. This repeal is adopted without changes to the proposal as published in the November 2, 2007, issue of the Texas Register (32 TexReg 7857).
Rule 134.650 provided a process to resolve disputes of medical necessity in which the insurance carrier had prospectively denied future medical care that did not require preauthorization under §134.600, concerning Preauthorization, Concurrent Review, and Voluntary Certification of Health Care. The repeal of this section is a result of the Division's adoption of §137.100, concerning Treatment Guidelines, which applies to health care provided on or after May 1, 2007.
The purpose of §134.650 was to address the pretreatment impasse between insurance carriers and health care providers regarding health care that did not require preauthorization, but was informally being denied in advance by insurance carriers on the basis of medical necessity and, in some instances, relatedness to the compensable injury. Section 134.650 provided a process to resolve that impasse.
Texas Labor Code §413.011(e) required the Division to adopt treatment guidelines. Subsequently, §137.100 adopted the Official Disability Guidelines- Treatment in Workers' Compensation (ODG) as the treatment guideline for providing non-network health care to injured employees. Treatments and services provided within the ODG are presumed to be reasonable and reasonably required; therefore, preauthorization is not required for treatments provided within the ODG, except in certain circumstances.
Since adoption of the ODG, preauthorization is required when 1) the treatment or service is on the Division's preauthorization list, 2) the diagnosis is not included in the treatment guidelines, 3) the treatment or service is under study or not recommended in the ODG, or 4) the care exceeds the Division's treatment guidelines in frequency or duration. Treatment not addressed by, or that exceeds, the Division's treatment guidelines requires preauthorization, therefore, insurance carriers may not informally deny proposed health care in advance. If preauthorization is required and denied by the insurance carrier, the Division provides dispute resolution through the Independent Review Organization (IRO) process. Treatment that is preauthorized raises a health care provider's assurance of payment and denial of preauthorization can be appealed through the IRO process. The preauthorization and IRO processes provide remedies that were not previously available in situations where the §134.650 process was commonly used. With the ODG, preauthorization, and IRO processes in place, there is no longer a need for the process that was provided by §134.650.
The repeal of §134.650 removes the former process to resolve disputes of medical necessity in which the insurance carrier had prospectively denied future medical care that did not require preauthorization under §134.600. Rule 137.100, concerning Treatment Guidelines will continue in effect and the IRO process will serve to resolve medical necessity disputes.
COMMENT: Commenters support the repeal of §134.650.
AGENCY RESPONSE: The Division agrees. With the ODG, preauthorization, and IRO processes in place, there is no longer a need for the dispute process that was provided by §134.650 for prospective denials of medical care.
COMMENT: Commenter requests that preauthorization be eliminated for physical and occupational therapy requests for treatment for diagnosis and number of visits that are in the ODG guidelines since the diagnosis and number of recommended visits are already a part of the guideline and it seems a waste of treatment time to go through this unnecessary bureaucracy.
AGENCY RESPONSE: The Division disagrees. This comment is outside the scope of this repeal. However, the Division clarifies that the Labor Code at §413.014 requires preauthorization of physical and occupational therapy services.
For: Insurance Council of Texas and Zenith Insurance Company.
Neither For or Against: One individual.
The repeal is adopted pursuant to Labor Code §§406.010, 406.031, 408.004, 408.021, 408.025, 413.013, 413.018, and 413.055, 402.0111, and 402.061. Section 406.010 authorizes the Commissioner to adopt rules regarding claims service. Section 406.031 holds an insurance carrier liable for compensation for an eligible employee's injury arising out of and in the course and scope of employment. Section 408.004 allows the Commissioner to require injured employees to submit to medical examinations to resolve questions regarding appropriate medical care and similar issues. Section 408.021 provides that the injured employee is entitled to all health care reasonably required by the nature of the injury as and when needed. Section 408.025 authorizes the Commissioner to adopt requirements for reports and records that are required to be filed with the Division by health care providers. Section 413.013 allows the Commissioner to establish programs for prospective, concurrent, and retrospective review and resolution of a dispute regarding health care treatments and services. Section 413.018 provides that the Division shall review the medical treatment provided in a claim that exceeds the guidelines and may take appropriate action to ensure that necessary and reasonable care is provided. Furthermore, the Commissioner may adopt rules and forms as necessary to implement §413.018. Section 413.055 allows the Commissioner to issue medical interlocutory orders requiring carriers to be liable for specific future medical care. Section 402.00111 provides that the Commissioner of Workers' Compensation shall exercise all executive authority, including rulemaking authority, under the Labor Code and other laws of this state. Section 402.061 provides that the Commissioner of Workers' Compensation has the authority to adopt rules as necessary to implement and enforce the Texas Workers' Compensation Act.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on December 20, 2007.
TRD-200706515
Norma Garcia
General Counsel
Texas Department of Insurance, Division of Workers' Compensation
Effective date: January 9, 2008
Proposal publication date: November 2, 2007
For further information, please call: (512) 804-4288