28 TAC §11.204
The Texas Department of Insurance proposes an amendment to §11.204(15)(A),
concerning the notice that an insurer is required to give the commissioner
and a health maintenance organization (HMO) prior to the termination or reduction
of coverage by the insurer of any reinsurance agreement and any other agreement
covering excess of loss, stop-loss, and/or catastrophes as prescribed in Insurance
Code Article 20A.05(a)(4)(C). The purpose of the amendment is to correct an
incorrect cite to the Insurance Code contained in §11.204(15)(A). Section
11.204(15)(A) currently refers to any reinsurance agreement and any other
agreement described in Insurance Code Article 20A.05(b)(2)(C)(iii). No such
provision exists in the Insurance Code. Section 11.204(15)(A) should cite
to Insurance Code Article 20A.05(a)(4)(C), which states that the commissioner
considers any agreement that an HMO enters into with an insurer, group hospital
service corporation, a political subdivision of government, or any other organization
for insuring the payment of the cost of health care services or the provision
for automatic applicability of alternative coverage in the event of discontinuance
of the plan. Section 11.204(15)(A) requires that an agreement entered into
between an HMO and an insurer provide that the commissioner and the HMO will
be notified no less than 60 days prior to termination or reduction of coverage
by the insurer.
Betty Patterson, CPA, CFE, 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 identification
of the statutory requirement that an HMO is responsible for and may reasonably
be expected to meet its obligations to enrollees and prospective enrollees
and identification of the factors the commissioner shall consider in determining
whether an HMO has complied with this requirement. 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.
To be considered, written comments on the proposal must be submitted no
later than 5:00 P.M. on March 8, 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 Betty Patterson, CPA, AFE, Senior Associate
Commissioner, Financial Program, Mail Code 305-2A, 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, Article 20A.22
and §36.001. Article 20A.22 authorizes the commissioner to adopt rules
as necessary to carry out the provisions of Insurance Code, Chapter 20A. 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 20A.05 is affected by this section.
§11.204.Contents.
Contents of the application must include the following items in the
order listed:
(1) - (14)
(No change.)
(15)
insurance, guarantees, and other protection against insolvency:
(A)
any reinsurance agreement and any other agreement described
in the Insurance Code Article
20A.05(a)(4)(C)
[
20A.05(b)(2)(C)(iii)
], covering excess of loss, stop-loss, and/or catastrophes. The agreement
must provide that the commissioner and HMO will be notified no less than 60
days prior to termination or reduction of coverage by the insurer;
(B)
any conversion policy or policies which will be offered
by an insurer to an HMO enrollee in the event of the HMO's insolvency;
(C)
any other arrangements offering protection against insolvency,
including guarantees, as specified in §11.806 of this title (relating
to Liabilities), §11.808 of this title (relating to Guarantee from a
Sponsoring Organization), and §11.1804 of this title (relating to guarantee);
(16) - (24)
(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 January 24, 2002.
TRD-200200360
Lynda Nesenholtz
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: March 10, 2002
For further information, please call: (512) 463-6327