28 TAC §15.101
The Texas Department of Insurance proposes an amendment to §15.101,
concerning the Plan of Operation of the Surplus Lines Stamping Office of Texas
("SLSOT"). The section provides for the setting of the stamping fee charged
by SLSOT pursuant to Insurance Code Article 1.14-2 §6A(b). This proposed
amendment changes the one year projection method for estimating the stamping
fee to a method utilizing the previous five-year period. This change provides
for more flexibility and stability in the setting of the stamping fee, thereby
resulting in less disruption and more efficiency in the surplus lines market.
Betty Patterson, Senior Associate Commissioner, 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. 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 to create more efficiency
in the operation of the SLSOT in the process of setting the stamping fee pursuant
to law. 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 businesses. It is anticipated
that for the first couple of years, costs will actually be reduced as the
fee is being decreased. The new five year look-back provision should stabilize
the fee for a longer time period and result in a smoother administrative process
associated with the collection of the stamping fee.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on June 9, 2003 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 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 should be submitted separately to the Office of the Chief Clerk.
The amendment is proposed under the Insurance Code Article 1.14-2,
and §36.001. Insurance Code Article 1.14-2 §6A(b) provides for the
approval by the commissioner of a stamping fee recommended by the Surplus
Lines Stamping Office of Texas. This rule is designed to implement the stamping
fee recommended by the Board of Directors of the SLSOT, as approved by the
commissioner. Article 1.14-2 §6A(d) requires approval by the commissioner
of amendments to the Plan of Operation of the Surplus Lines Stamping Office
of Texas. Section 36.001 provides that the commissioner 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: Insurance Code Article
1.14-2 §6A(b).
§15.101.Plan of Operation of the Surplus Lines Stamping Office of Texas.
(a)-(d)
(No change.)
(e)
The stamping office is subject to the following provisions:
(1)-(2)
(No change.)
(3)
Prior to November 1 of each year, the board of directors
shall adopt, subject to review by the commissioner, a budget for the stamping
office's operating and capital expenses and contingent expenses for the following
calendar year. The budget shall take into account unknown and unanticipated
expenses as may reasonably occur and make provision for such expenses in accordance
with prudent business practice, but
projected
reserves, excluding
funds for asset replacement, shall not exceed
two times the average of
audited operating expenses for the five-year period immediately preceding
the budget year. However, in the event that the reserve balance is projected
to exceed this limit in an upcoming year, the board of directors shall submit
to the commissioner within thirty days after the Annual Meeting a written
plan for reducing the amount of actual reserves in compliance with this section
within a reasonable time given the then existing market conditions
[
one year's operating expenses
]. Based upon the anticipated volume of
surplus lines premium during the upcoming calendar year, the board of directors
shall recommend for adoption by the commissioner a stamping fee to be charged
on all surplus lines filings, as measured by premium, submitted to the stamping
office.
(4)-(13)
(No change.)
(f)-(h)
(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 April 25, 2003.
TRD-200302626
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: June 8, 2003
For further information, please call: (512) 463-6327