Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 1.
GENERAL ADMINISTRATION
Subchapter F. SUMMARY PROCEDURES FOR ROUTINE MATTERS
28 TAC §§1.702 - 1.705
The Commissioner of Insurance adopts amendments to §§1.702
- 1.705 concerning activities related to summary procedures for routine matters.
The amendments to §1.702 and §1.704 are adopted with changes to
the proposed text as published in the December 6, 2002 issue of the
The amendments are necessary to update Subchapter F to reflect the restructuring
of the department's divisions, statutory changes, and technological advancements
regarding communication between the department and persons affected by these
routine matters. Insurance Code §36.102 permits the commissioner by rule
to create a summary procedure for certain routine matters. This subchapter
sets forth those activities that have been designated by the commissioner
as routine because they are voluminous, repetitive, believed to be noncontroversial,
and of limited interest to persons other than those immediately involved or
affected.
The amendments to §1.702 set forth the activities designated for summary
procedure disposition. Among other things, these amendments add viatical and
life settlement certificates of registration, utilization review and independent
review organization certificates, and third-party administrator certificates
of authority to the list of designated forms and filings and licenses, certificates,
or registrations, as applicable. The amendments also eliminate outdated references
to Insurance Code Chapter 5, Subchapter B, (a) rates; Chapter 5, Subchapter
B, excess rate or umbrella; excess inland marine; and cessation of acceptance
of workers' compensation of small premium policies. Due to statutory changes,
(a) rates are no longer accepted, personal umbrella rates are subject to prior
approval, and commercial umbrella rates are submitted as file and use. In
House Bill 2 (72nd Legislative Session, 1991) the Texas Legislature deregulated
commercial property and general liability insurance rates, and in Board Order
No. 59970 (1992), the former State Board of Insurance re-designated the status
of the rates to "standard" from "approved standard and uniform." The department
no longer approves standard and uniform rates and Insurance Code Article 5.26
provides for rates in excess of the promulgated rate, making the language
in §1.702 regarding "excess of" no longer applicable. Insurance Code
Article 5.65-2, which among other things contained provisions regarding the
workers' compensation small premium policy plan, was repealed effective December
31, 1993. Minor changes were also made to the section to correct punctuation.
The amendments to §1.703 delegate the various activities listed in §1.702
to the appropriate associate or deputy commissioner within the department
responsible for summary procedure disposition of those activities. These amendments
reflect a restructuring of various divisions within the department and assignment
of responsibilities for certain functions, including the regulatory functions
regarding health maintenance organizations, which is delegated in part to
the Financial Program and in part to the HMO Division. Language was also added
to recognize that, in the event of such a restructuring of the department
in the future, the delegation of the administration over the activities will
follow the appropriate associate or deputy commissioner assuming responsibility
for the activities. The amendments to this section also delete language referencing
the filings for which the deputy commissioner of property insurance was delegated
responsibility because they were previously deleted pursuant to Board Order
No. 59970 (1992). The amendments also change various references to the former
state board of insurance to commissioner or department, as appropriate. Amendments
to §1.704 add electronic transmission as another means of notifying a
person of an action regarding a matter requiring final disposition by the
department. The amendments to this section also establish the procedure to
be used by the department in notifying a person of a departmental action affecting
the person. Minor changes were also made to the section to correct punctuation.
The amendments to §1.705 correct statutory references to the Insurance
Code and clarify how to file a petition for review.
No comments were received.
The sections are adopted pursuant to Insurance Code §36.102
and §36.001. Insurance Code §36.102 provides that the commissioner
of insurance may, by rule, create a summary procedure for routine matters
and designate department activities that otherwise would be subject to Government
Code Chapter 2001, as routine matters to be handled under summary procedure.
Insurance Code §36.001 permits the commissioner to adopt rules for the
conduct and execution of the powers and duties of the department as authorized
by statute.
§1.702.Designated Activities.
The following statutorily prescribed activities are designated for
summary procedure disposition:
(1)
Filings of forms, rates, and related filings pursuant to
Insurance Code Articles 3.42, 3.50-6A, 3.70-12, 3.53, 3.74, 5.13-1; Chapters
23 and 26; and §3.3325(f) and (g) of this title (relating to Medicare
Select Policies, Certificates, and Plans of Operation), but not withdrawals
of approval pursuant to Insurance Code Articles 3.42, 3.53, 5.13-1, and Chapter
23.
(2)
Filings of forms, rates, and related filings by health
maintenance organizations pursuant to §11.301(4)(A), (B), and (L), and
(5)(C), (G), (K), (M), and (N) of this title (relating to Filing Requirements),
but not withdrawals of approval pursuant to Insurance Code Chapter 20A.
(3)
Filings of forms, rates, and related filings by health
maintenance organizations pursuant to §11.301 of this title, except those
listed in paragraph (2) of this section, but not withdrawals of approval pursuant
to Insurance Code Chapter 20A.
(4)
Filings of application or renewal for the following:
(A)
agents and adjusters licenses pursuant to Insurance Code
Articles 1.14-2, 3.75, 21.07, 21.07-1, 21.07-2, 21.07-3, 21.07-4, 21.09, 21.11,
21.14, and 23.23, insurance premium finance licenses pursuant to Insurance
Code Article 24.03, and third party administrator certificates of authority
pursuant to Insurance Code Article 21.07-6;
(B)
viatical and life settlement certificates of registration
pursuant to Insurance Code Article 3.50-6A;
(C)
utilization review agent certificates pursuant to Insurance
Code Article 21.58A and §§19.1704(g) and 19.2004 of this title (relating
to Certification of Utilization Review Agents), and independent review organization
certificates pursuant to Insurance Code Article 21.58C and §12.109 of
this title (relating to Appeal of Denial of Application or Renewal); and
(D)
licenses pursuant to Insurance Code Articles 9.35 - 9.38,
9.41 - 9.45, 9.56, and 9.58.
(5)
Applications to change rates, forms, or deductibles for
motor vehicle insurance on an individual risk basis pursuant to Rule 4 in
the Texas Automobile Rules and Rating Manual adopted under Insurance Code
Article 5.101.
(6)
Applications to charge a rate or premium greater than the
standard rate or premium approved by the commissioner for the types of insurance
specified in Insurance Code Article 5.13, pursuant to Insurance Code Article
5.15(c).
(7)
Filings of endorsements for negotiated deductible plans
for workers' compensation insurance policies made pursuant to Insurance Code
Article 5.55C.
§1.704.Summary Procedure; Notice.
(a)
Actual notice for proposed negative action. In the case
of proposed negative action with regard to any delegated activity designated
under §1.702 of this subchapter (relating to Designated Activities),
parties directly involved shall be given actual notice at least five days
in advance of the action proposed. Actual notice means written or electronic
notice. If the actual notice is a written notice, it will be sent by mail
addressed to the last known address of the person, or, if the person is represented
by an attorney, to the person's attorney of record, as submitted with the
filing, application, form, or submission that is the subject of the proposed
negative action. If the actual notice is electronic, it will be sent electronically
to the email address or to the electronic destination, as applicable, from
which the person submitted the filing, application, form, or submission which
is the subject of the proposed negative action.
(b)
Notice of decision. For §1.702(1) - (7) of this subchapter,
the appropriate associate or deputy commissioner shall notify the person by
mail or electronic transmission of a positive or negative decision and the
date of the decision, shall record the decision in the department's electronic
files, and shall retain a record of the notification with the filing, application,
form, or submission or cause the appropriate license, certificate, or registration
to be mailed to the person.
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 May 5, 2003.
TRD-200302774
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 1, 2003
Proposal publication date: December 6, 2002
For further information, please call: (512) 463-6327
Subchapter A. REQUIREMENTS FOR FILING OF POLICY FORMS, RIDERS, AMENDMENTS, AND ENDORSEMENTS FOR LIFE, ACCIDENT AND HEALTH INSURANCE AND ANNUITIES
28 TAC §§3.1 - 3.21
The Commissioner of Insurance adopts the repeal of Subchapter
A, §§3.1 - 3.21, concerning requirements for filing of policy forms,
riders, amendments, and endorsements for life, accident and health insurance
and annuities. The repeal is adopted without changes to the proposed text
as published in the December 6, 2002 issue of the
Texas Register
(27 TexReg 11454) and will not be republished.
The repeal of §§3.1 - 3.21 is necessary so that new Subchapter
A can be adopted which will streamline and clarify the overall process by
which policy forms, certificates, riders, amendments, and endorsements for
life, accident and health insurance and annuities are filed with the department
for statutory and regulatory review and approval. Simultaneous to the adoption
of this repeal, adopted new Subchapter A, §§3.1 - 3.21, is published
elsewhere in this issue of the
Texas Register
.
The adopted repeal will result in the elimination of sections that are
obsolete and combine information from several sections into the same or similar
sections. This elimination of sections streamlines Chapter 3 of the Texas
Administrative Code, and clarifies and simplifies the filing process with
the department.
No comments were received regarding the repeal.
The repeal of §§3.1 - 3.21 is adopted under Insurance
Code Article 3.42 and §36.001. Insurance Code Article 3.42(p) provides
that the commissioner is authorized to adopt such reasonable rules as are
necessary to implement and accomplish the specific provisions of Article 3.42.
Insurance Code §36.001 authorizes the commissioner of insurance to adopt
rules for the conduct and execution of the powers and duties 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 May 5, 2003.
TRD-200302777
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 1, 2003
Proposal publication date: December 6, 2002
For further information, please call: (512) 463-6327
28 TAC §§3.1 - 3.8
The Commissioner of Insurance adopts new Subchapter A, §§3.1
- 3.8, concerning requirements for filing of policy forms, certificates, riders,
amendments, and endorsements for life, accident, and health insurance and
annuities. Sections 3.3, 3.4 and 3.8 are adopted with changes to the proposed
text as published in the December 6, 2002, issue of the
Texas Register
(27 TexReg 11455). Sections 3.1. 3.2, 3.5 - 3.7 are
adopted without changes and will not be republished.
Sections 3.1 - 3.8 are necessary to streamline and clarify the overall
process by which forms and related documents concerning life insurance products,
annuities, accident and health insurance products, credit life insurance,
credit accident and health insurance, and prepaid legal forms are filed for
statutory and regulatory review and approval. To further streamline the filing
process, the sections allow companies to electronically file forms with the
department using a form and format determined by the department, which currently
is the National Association of Insurance Commissioners (NAIC) supported SERFF
(System for Electronic Rate and Form Filing) system. The department will be
able to receive SERFF filings after all necessary rules are adopted. The new
sections further streamline the filing process by enabling the department
to notify companies of the department's decisions by letter in lieu of stamping
the duplicate copy, thus eliminating the need for filing of duplicate copies
of forms.
The new sections will facilitate consistent and appropriate filing of forms
and rates with the department and will improve communications and understanding
of the filing requirements. The sections will further combine the existing
filing requirements for the regular, general and expedited review processes
into one filing process by consolidating the information into one transmittal
checklist with a transmittal form for miscellaneous documents. This will eliminate
the use of the previously promulgated certification transmittal checklists
for the regular, general and expedited review processes.
In conjunction with the adoption of the new subchapter, the department
is adopting the repeal of existing Subchapter A, §§3.1 - 3.21, which
is published elsewhere in this issue of the
Texas
Register
.
New §3.1 sets out the scope of the subchapter to identify the types
of forms and miscellaneous documents that must be filed under Chapter 3, Subchapter
A, Section 3.2 defines terms used in this subchapter. Section 3.3 establishes
the information that must be included in a transmittal checklist and transmittal
form which must accompany all filings. Section 3.4 specifies the general submission
requirements, which include information concerning the contact person, form
specifications, specimen language, variable material, matrix and insert page
filings, limited/partial refilings, outlines of coverage, supplemental coverage,
policy or contract forms, and rates/actuarial information. Section 3.4(q)(5)
clarifies that if, during any 12-month period, the cumulative increase in
premium rate is equal to or greater than 50%, actuarial information must be
provided to support the rate increase. For example, for a particular 12-month
period, the premium rate for the first 2 months is $100. The premium increases
by 10% in month three, 10% in month five and 25% in month eleven. The cumulative
increase for purposes of applying the 50% test under this paragraph is 51.25%
(1.10 x 1.10 x 1.25). Section 3.4(r) specifies required filing fees. Section
3.4(r)(1)(D) increases the filing fee from $50 to $100 for rates filed separately
from the policy or contract that are subject to review and approval by the
department. The department currently assesses a fee of $100 for other rates
filed for review. Section 3.4(r)(1)(J) and (2)(H) require a filing fee of
$50 for each form with a maximum fee of $500 for each matrix filing as these
filings can be used to create multiple contracts or policies through the combination
of various matrix provisions.
Section 3.5 sets forth the appropriate statutory and/or regulatory authorities
to utilize when submitting filings to the department and the description of
each filing such as: new, informational, substantially similar, exact copy,
substitution, pending, and resubmission. Section 3.6 addresses information
concerning certifications, attachments, and other additional information required
for a complete and comprehensive review of the submitted forms. Section 3.7
contains the requirements for form acceptance and the final disposition of
the form. Section 3.8 establishes an effective date for the adopted rules.
Section 3.3 was changed to correct two clerical errors and §3.4 was
changed to clarify sentence structure. In §3.8, the date has been changed
to June 1, 2003 in order to complete technical and administrative tasks necessary
to implement the billing system.
General: A commenter expresses support of the proposed rules providing
requirements for policy forms and related filings.
Agency Response: The department appreciates the commenter's support and
believes the more efficient and effective policy form filing and review process
will benefit all parties involved.
Matrix filings: A commenter asks for confirmation that following the approval
of various matrix provisions, new form filings may reference previously approved
provisions and thus only submit for review new provisions for a particular
filing.
Agency Response: The commenter is correct that matrix filings submitted
to the department should only include new provisions for review. Carriers
should not include previously approved provisions with the new filing. Carriers
must determine how they will file new product filings. A carrier may file
forms for a specific policy, certificate, rider, endorsement form or for a
matrix filing, however; it may not file a specific form as both.
Section 3.2(6)(D): A commenter asks for clarification regarding limited,
partial refilings due to a change to the separate account for variable products
when the separate account is bracketed as variable text on the initial filing.
The commenter's specific concern is whether a change in funds in the separate
account triggers this requirement.
Agency Response: The rule does not require limited or partial refilings
for a change to the funds of the separate account if, when the form reflecting
the funds was filed and approved, the fund names were bracketed as variable
text.
Section 3.4(r)(1)(A) - (J): A commenter asks whether companies, when submitting
a new filing, are required to pay for use of matrix filings in addition to
new form filing fees.
Agency Response: Insurers are required to choose between either a matrix
filing or single form filing (policy, certificate, rider, endorsement, etc.).
An insurer may use a matrix filing only with other approved or exempted matrix
filings, not in conjunction with single form filings. The department will
charge the appropriate fee as provided by §3.4(r)(1)(A) - (J). Matrix
filings are always $50 per form with a maximum of $500 (see §3.4(r)(1)(J)
and (2)(H)), whether they are a new filing, an exempt filing, or a resubmission.
For with changes: New York Life Insurance Company. Against: None.
The new sections are adopted pursuant to Insurance Code Articles
3.42, 3.51-6, 3.53, 3.64, 3.70-1, 3.70-12, 3.74, 5.13-1, and 21.42, Chapters
23 and 26 and §36.001. Insurance Code Article 3.42(p) provides that the
commissioner is authorized to adopt reasonable rules that are within the standards
and purposes of Insurance Code Article 3.42 and necessary to implement and
accomplish the specific provisions of Article 3.42. Insurance Code Article
3.51-6 §5 provides that the department is authorized to issue rules necessary
to accomplish the specific provisions of Article 3.51-6. Insurance Code Article
3.53 §7(H) authorizes the department to charge a fee for forms or schedules
filed under Article 3.53 in an amount to be determined by the department.
Insurance Code Article 3.64(f) provides that the commissioner is authorized
to adopt rules to implement and accomplish the specific provisions of Article
3.64. Insurance Code Articles 3.70-1 and 3.70-12 require the department to
issue reasonable rules necessary to carry out the purposes of the articles.
Insurance Code Article 3.74 provides that the department shall adopt rules
in accordance with federal law applicable to the regulation of Medicare supplement
insurance coverage that are necessary for the state to obtain or retain certification
as a state with an approved regulatory program under 42 U.S.C. 1395ss. Insurance
Code Article 5.13-1(d) authorizes the department to promulgate and enforce
rules concerning legal service contracts that in the discretion of the department
are deemed necessary to accomplish the purposes of the article. Insurance
Code Article 21.42 provides that Texas laws govern any insurance contract
that is payable to any citizen or inhabitant of Texas. Insurance Code Article
23.19 authorizes the commissioner to adopt rules concerning participation
contracts and agreements related to non-profit legal services. Insurance Code
Article 26.04 requires the commissioner to adopt rules as necessary to implement
Chapter 26 and to meet the minimum requirements of federal law and regulations.
Insurance Code §36.001 authorizes the commissioner of insurance to adopt
rules for the conduct and execution of the powers and duties of the department
as authorized by statute.
§3.3.Transmittal Information.
(a)
All filings submitted pursuant to this subchapter shall
be accompanied by the department's transmittal checklist except for the documents
listed in §3.1(11)(B) of this subchapter (relating to Scope), which shall
be accompanied by the department's transmittal form as described in this section.
Copies of the transmittal checklist and transmittal form are available from
the Filings Intake Division, Mail Code 106-1E, Texas Department of Insurance,
P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas,
78701, or by accessing the department's website at www.tdi.state.tx.us.
(b)
The transmittal checklist shall:
(1)
provide complete and accurate information about the filing;
(2)
include, at a minimum, the following information:
(A)
the name and address of the submitting company;
(B)
the contact person information as required in §3.4(b)
of this subchapter (relating to General Submission Requirements);
(C)
the unique identifying form number of each form submitted;
(D)
an explanation of the purpose and use of each form as defined
in §3.2 of this subchapter (relating to Definitions);
(E)
an indication of the product and type;
(F)
an indication of whether the filing is prompted by a business
change such as an assumption, a name change, or a demutualization/conversion;
(G)
the applicable authority from the Insurance Code or the
Administrative Code under which the form is being submitted as described in §3.5
of this subchapter (relating to Filing Authorities and Categories);
(H)
an indication of whether the filing is a matrix filing;
(I)
rate filing information, if applicable;
(J)
a statement that the submission will be used:
(i)
on a general use basis, only with the policy being filed,
or with previously approved or exempted forms; and
(ii)
if the submission will be used with previously approved
or exempted forms, a listing of the following:
(I)
the form numbers of the previously approved or exempted
forms;
(II)
the approval or exemption dates of the previously approved
or exempted forms; and
(III)
a brief description of when or how each submitted form
will be used with the previously approved or exempted forms;
(K)
if the filing is a group filing, it must contain:
(i)
A statement specifying the specific group type as set forth
in §3.6(c)(1) of this subchapter (relating to Certifications, Attachments,
and Additional Information Requirements).
(ii)
A separate policy and certificate for each type of group.
A submission of a single policy and certificate for use with more than one
type of group is prohibited.
(iii)
The following as applicable:
(I)
a statement specifying the size of the group if issued
under Chapter 26 of this title (relating to Small Employer Health Insurance
Regulations);
(II)
a copy of the trust agreement if issued to a trust;
(III)
a copy of the constitution, bylaws, and articles of incorporation
if issued to an association; or
(IV)
certification and evidence that the master policy for
the group was lawfully issued and delivered in a state in which the company
was authorized to do insurance business;
(L)
any certifications and attachments, including summary of
differences, if applicable, or any additional information required by §3.6
of this subchapter, or variable information in accordance with §3.4(e)
of this subchapter.
(3)
be completed, signed, and certified by an attorney licensed
to practice law in this state, an actuary familiar with the requirements of
the Insurance and Administrative Codes, the chief executive officer of the
filing company, or a person with authority to bind the company.
(c)
The transmittal form shall:
(1)
provide complete and accurate information about the filing;
(2)
include, at a minimum, the following information:
(A)
the name and address of the submitting company;
(B)
the contact person information as required by §3.4(b)
of this subchapter;
(C)
an identification of the type of miscellaneous document
or information being submitted as described in §3.1(11)(B) of this subchapter;
and
(D)
for filings to be used with previously approved or exempted
forms:
(i)
the form numbers of the previously approved or exempted
forms;
(ii)
the approval or exemption dates of the previously approved
or exempted forms;
(iii)
a general statement of the types of previously approved
or exempted forms (e.g., waiver of surrender charge rider); and
(iv)
a brief description of when or how each submitted form
will be used with the previously approved or exempted forms;
(d)
Notwithstanding subsections (b)(2) and (c)(2) of this section,
the commissioner may prescribe a transmittal document prescribed by the NAIC
for purposes of standardization.
(e)
Filings that are not accompanied by a completed transmittal
checklist or transmittal form, or which do not include all required certifications
or signatures will not be accepted by the department and will be returned
to the company as incomplete.
§3.4.General Submission Requirements.
(a)
Submission. Companies shall submit one copy of the filing
to the Filings Intake Division at the address set forth in §3.3(a) of
this subchapter (relating to Transmittal Information). A filing submitted
electronically shall be submitted in such form and format as determined by
the department.
(b)
Contact Person. A company submitting a filing to the department
shall:
(1)
have one person designated as the contact person for that
filing;
(2)
provide the contact person's name, address, telephone number,
and if available, fax number on the transmittal checklist or transmittal form;
(3)
provide, for any filing submitted by anyone other than
the company, a dated letter of specific authorization which shall:
(A)
designate the consulting firm, actuary, legal counsel,
or other person as the designated contact person for that filing; and
(B)
be signed by an officer of the company or a person with
authority to bind the company; and
(4)
notify the department immediately of any change of information
with regard to the contact person for a pending filing, regardless of whether
the contact person is the company's employee or other authorized representative.
(c)
Form Specifications. Any filing submitted pursuant to this
subchapter shall comply with the following:
(1)
Filings submitted in paper format shall:
(A)
be submitted on 8 1/2 by 11 inch paper;
(B)
not be submitted in bound booklets;
(C)
be legible;
(D)
be in typewritten, computer generated, or printer's proof
format; and
(E)
not contain any color highlighting.
(2)
Any form submitted shall be designated by a form number
that:
(A)
is sufficient to distinguish it from all other forms used
by the company;
(B)
is located in the lower left-hand corner of the cover page
or on the first page of the form if the form number is visible with the cover
closed;
(C)
has the additional identifying form number requirements
set forth in Subchapter FF of this chapter (relating to Credit Life and Accident
and Health Insurance), if the form is submitted for consideration pursuant
to Insurance Code Article 3.53; and
(D)
has the additional identifying form number requirements
set forth in §26.14(g) of this title (relating to Coverage), if the form
is submitted for consideration pursuant to Insurance Code Chapter 26.
(d)
Specimen Language and Specimen Fill-in Material.
(1)
For all forms, specimen language and fill-in material shall
reflect the most restrictive option available under variability. Additional
descriptions of variability options shall be provided upon request or as otherwise
required.
(2)
Life and annuity forms shall be completed with fill-in
material for specimen age 35. If the form is not issued at age 35, the fill-in
material shall be completed for the youngest age at which the form may be
issued. If reduced death benefits are provided for any age at issue, the specimen
form shall be filled in for the age at issue for which the greatest reduction
in benefits is made. The fill-in material shall be for the longest premium
paying period available under the form.
(e)
Variable Material.
(1)
For all forms, any variable material in a form shall be
bracketed and shall contain a clear explanation of how the material will vary.
It is acceptable for certain materials to vary due solely to the age, sex,
classification of the insured, plan type such as 403(b) and IRA, telephone
numbers, and addresses depending on the manner in which the company intends
to use the variations. The unique form number on a form may not be bracketed
as variable.
(2)
For individual life forms, the text and specifications
of non-forfeiture assumptions generally cannot be considered variable material.
(f)
Matrix Filings. Policies, certificates, contracts, or applications
may be submitted as a matrix filing. Any company submitting a matrix filing:
(1)
shall identify each provision with a unique form number
that:
(A)
is sufficient to distinguish it from all other provisions
used by the company; and
(B)
is located at the lower left-hand corner of the provision;
(2)
may use the same provision filed under one form number
for all products, provided the language is applicable to each product; however,
any changes in the language to comply with the requirements for each product
will require a unique form number;
(3)
shall list the form number for each provision on the transmittal
checklist and provide a statement indicating how the provision will be used
and the type of product for which the provision will be used; and
(4)
shall provide the certifications required in §3.6(a)(8)
of this subchapter (relating to Certifications, Attachments, and Additional
Information Requirements).
(g)
Insert Page Filings. Policies, certificates, and contracts
may be submitted with insert pages, or an insert page may be filed subsequent
to the approval of a policy, certificate, or contract. Any company submitting
an insert page filing:
(1)
shall identify each insert page with a unique form number
that:
(A)
is sufficient to distinguish it from all other forms used
by the company; and
(B)
is located in the lower left-hand corner of the page;
(2)
may use the same insert page filed under one form number
for all products, provided the language is applicable to each product type;
however, any changes in the language to comply with the requirements for each
product type will require a unique form number;
(3)
may use the same insert page to replace an existing page
of a previously approved or exempted contract, if used in this manner, the
replaced page, as originally filed, must reflect a unique form number that
distinguishes it from the other pages of the form or contract;
(4)
shall list the form number for each insert page on the
transmittal checklist and provide a statement indicating how the insert page
will be used and the type of product for which the insert page will be used;
and
(5)
shall provide the certifications required in §3.6(a)(8)
of this subchapter.
(h)
Limited, Partial Re-filings. Limited, partial refilings
shall contain the change and any additional actuarial information necessary
for a comprehensive review of the filing(s).
(i)
Outline of Coverage. An outline of coverage shall be filed
with each individual accident and health policy, group or individual Medicare
supplement policy and/or certificate, or group or individual long-term care
policy and/or certificate.
(j)
Supplemental Coverages.
(1)
Individual accident and health forms submitted pursuant
to §3.3080 of this title (relating to Supplemental Coverage) shall be
accompanied by the certification required in §3.6(a)(7) of this subchapter;
(2)
Group life forms submitted pursuant to Insurance Code Article
3.50 §1(1) or (5) shall be accompanied by the certification required
in §3.6(a)(7) of this subchapter.
(k)
Complete Submission of Policy or Contract Forms. For a
submission to be considered complete, the submission shall include the following:
(1)
the toll-free notice unless the company is exempt under §1.601(c)
of this title (relating to Notice of Toll-Free Telephone Numbers and Information
and Complaint Procedures) or has on file a toll-free notice which is current
with the requirements set forth in §1.601 of this title;
(2)
the application, if applicable;
(3)
in the case of group policies or contracts, the certificate;
(4)
any rider which will or can be included in all issues of
the form; and
(5)
disclosures and other information, if applicable.
(l)
Riders Included with Filing. For any rider included with
the policy or contract filing, indicate whether the rider is to be used:
(1)
only with the policy being filed; or
(2)
with other clearly identified previously approved or exempted
forms.
(m)
Previously Approved or Exempted Forms. Any previously approved
or exempted form (e.g., application or rider) to be used with the policy or
contract filing need not be resubmitted; however, the filing shall indicate
the type of form (e.g., rider, policy, application, etc.), form number, and
the approval or exemption date of the previously approved or exempted form.
If there is a change in the use of the previously approved or exempted form,
the filing must state the form number of the form(s) with which the previously
approved or exempted form was designed to be exclusively used, as well as
the updated forms list.
(n)
Appropriate Use of Previously Approved or Exempted Forms.
The company is responsible for assuring the appropriate use of previously
approved or exempted forms. This includes the appropriate use of any riders
or other forms such as matrix and insert pages.
(o)
Submission of a Certificate for Policies or Contracts Issued
Outside of Texas. A copy of the master policy or contract issued outside of
Texas must accompany any life, annuity, credit, or accident and health certificate
filed for review or filed as exempt, along with certification and evidence
that the master policy for the group was lawfully issued and delivered in
a state in which the company was authorized to do insurance business.
(p)
Rates. Initial and subsequent rate filings shall include
all specific descriptions and required information as follows:
(1)
policy forms for which the rate filing applies shall be
specified on the transmittal checklist or the transmittal form, as applicable;
(2)
credit life and credit accident and health filings submitted
under Insurance Code Article 3.53 and Subchapter FF of this chapter shall
include the rate information;
(3)
group and individual Medicare supplement filings submitted
under Insurance Code Article 3.74 §4, and Subchapter T of this chapter
(relating to Minimum Standards for Medicare Supplement Policies) shall include
the applicable rate schedule and experience by plan;
(4)
group and individual long-term care forms submitted under
Insurance Code Article 3.70-12 and Chapter 3, Subchapter Y of this chapter
(relating to Standards for Long-Term Care Insurance Coverage Under Individual
and Group Policies) shall include the rate schedule;
(5)
all individual accident and health filings submitted under
Insurance Code Article 3.42 shall include the rate schedule; and
(6)
rate schedules submitted shall be accompanied by the actuarial
information set forth in subsection (q) of this section.
(q)
Actuarial Information.
(1)
Each life filing, including riders, insert pages, or limited
partial refilings, which changes the non-forfeiture values of a particular
policy or certificate shall be accompanied by the information set forth in
subparagraphs (A) - (C) of this paragraph:
(A)
The mathematical formulas and sample calculations for the
items set forth in clauses (i) - (iv) of this subparagraph.
(i)
net premiums for the specimen age and plan of insurance;
(ii)
specimen non-forfeiture calculations necessary to verify
consistency between the non-forfeiture values and the text of the form for
years one, 20, and 50;
(iii)
terminal reserves for the specimen age and plan; and
(iv)
any other calculations necessary to verify non-forfeiture
values and reserves.
(B)
An actuarial memorandum as specified in clauses (i) and
(ii) of this subparagraph, as applicable:
(i)
for universal life and interest sensitive forms:
(I)
an actuarial memorandum shall provide the mortality table,
guaranteed interest rates, maximum surrender charges, maximum expense charges,
maximum risk rates (cost of insurance rates), maximum loads, and maximum fees
at issue. Upon a change in basic coverage, bands and risk classes for all
ages shall be provided.
(II)
actuarial proof shall be provided that:
(-a-)
cash surrender values meet the minimum requirements of
Insurance Code Article 3.44a;
(-b-)
cash surrender values will always equal or exceed the
minimum values required by law; and
(-c-)
provide a comparison table of all guaranteed cash surrender
values, standard nonforfeiture law minimum cash surrender values, guaranteed
death benefits, and reserves. Such comparison should be based on the fill-in
issue age (usually age 35) as defined in subsection (d) of this section, a
premium which will provide coverage to the latest available maturity date,
the minimum issue amount, minimum guaranteed interest rates, maximum guaranteed
cost of insurance rates (mortality rates), maximum guaranteed charges, and
a month-by-month calculation of the values shown in the comparison for the
first and fiftieth years.
(ii)
for variable life forms, actuarial information shall be
provided as required by §3.804 of this chapter (relating to Insurance
Contract and Filing Requirements), and as required by this section.
(C)
A statement shall be provided certifying that all policies
or certificates, in addition to the specimen language and fill-in material,
will have premiums, reserves, and non-forfeiture values calculated in a manner
consistent with the information furnished with the specimen language and fill-in
material. Any qualifications to such certification shall be specified, including
any variation in formulas at different ages at issue or at time of a change.
(2)
For each annuity filing, an actuarial memorandum shall
be provided to meet the minimum requirements of Insurance Code Article 3.44b
and specify the guaranteed interest rates, the maximum surrender charges,
and any other maximum charges applicable in the determination of non-forfeiture
values. If the company intends to change the guaranteed interest rates specified
in the form, notification shall be submitted to the department prior to the
change. The notification shall specify the new guaranteed interest rate and
the date when the new guaranteed interest rate will be effective for new issues
of a specified policy form, as required by §3.1004 of this chapter (relating
to Policy Form Review).
(A)
For variable annuities, the actuarial information shall
provide the information required in this paragraph and the information required
by §3.705 of this chapter (relating to Contract Requirements), to the
extent such material is applicable.
(B)
For policies or contracts that contain a market-value adjustment,
the actuarial memorandum shall:
(i)
identify the name of the separate account;
(ii)
indicate the basis for the market-value adjustment formula
and that the formula provides reasonable equity to both the contract holder
and the company;
(iii)
detail that the reserve liabilities are established in
accordance with actuarial procedures that recognize that assets of the separate
account are based on market values, the variable nature of the benefits provided,
and any mortality guarantees;
(iv)
include a table of minimum guaranteed policy values and
cash surrender values which:
(I)
are based on the longest guaranteed investment period,
(II)
reflect both upward and downward market-value adjustments;
and
(III)
show that the minimum guaranteed values prior to the
adjustment are not less than the minimum non-forfeiture values required by
law; and
(v)
provide a numerical illustration reproducing the values
shown in the table for the first, second, and third years of investment, and
at the end of the guaranteed investment period.
(3)
Group and individual Medicare supplement (including Medicare
SELECT) rate filings shall be accompanied by supporting actuarial information
as required by Subchapter T of this chapter.
(4)
Group and individual long-term care:
(A)
rate filings shall be accompanied by supporting actuarial
information as required by Subchapter Y of this chapter; and
(B)
annual reports shall include the rates, rating schedule,
and supporting documentation as required by Insurance Code Article 3.70-12, §4(b).
(5)
Individual accident and health premium rate increases which
result in any policyholder experiencing an increase in premium rate greater
than or equal to 50% in any 12-month period must be accompanied by actuarial
information which includes, at a minimum, the items of information specified
in subparagraphs (A) - (E) of this paragraph. For the purpose of this paragraph,
an increase in premium rate greater than or equal to 50% in any 12-month period
shall mean the cumulative increase with respect to such premium considered
over a 12-month period.
(A)
The form number or numbers to which the submitted rate
increase applies.
(B)
The planned effective date of the increased rate.
(C)
The schedule or schedules of rates to be used.
(D)
A concise explanation of the rating process, including
assumptions, claims data, methodology, and formulas used in development of
gross premium rates.
(E)
A statement of actual and projected experience as a basis
for the rate adjustments.
(6)
Discretionary group filings shall be accompanied by supporting
actuarial information as required by Insurance Code Articles 3.50 §1(6)
and 3.51-6 §1(a)(6).
(r)
Filing Fee.
(1)
The appropriate filing fee for filings for approval (excluding
prepaid legal filings) are set forth in subparagraphs (A) - (J) of this paragraph.
(A)
For each contract or policy, including Certification Form
for Prototype Forms Figure Number 45, its certificate, approved or exempted
application, and all approved or exempted riders filed as part of the entire
policy or contract, a fee of $100 is required.
(B)
For a filing of applications filed separately from the
policy or contract to which it will be attached, a fee of $100 is required.
(C)
For a filing of riders filed separately from the policy
or contract to which it will be attached, a fee of $100 is required.
(D)
For a filing of rates filed separately from the policy(ies)
or contract(s) to which it is applicable, that require approval by the department
as specified in §3.1(9) of this subchapter (relating to Scope), a fee
of $100 is required.
(E)
For a filing of alternate face pages with constitution
and bylaws, articles of incorporation, or trust agreements, a fee of $100
is required.
(F)
For a filing of insert pages filed subsequent to the original
approval of a policy, a fee of $100 is required.
(G)
For filings which normally would be considered exempt,
but which, due to certain reasons specified in Subchapter Z of this chapter
(relating to Exemption from Review and Approval of Certain Life, Accident,
Health and Annuity Forms and Expedition of Review) are required to be submitted
to the department for approval, a fee of $100 is required.
(H)
For filing a resubmission of a previously disapproved form,
a fee of $50 is required.
(I)
For each refiling of a previously withdrawn form, a fee
of $50 is required.
(J)
For a filing of matrix provisions, due to the ability to
create multiple contracts or policies from matrix provisions, a fee of $50
per form with a maximum fee of $500 is required.
(2)
The appropriate filing fee for a filing exempt under Subchapter
Z of this chapter is set forth in subparagraphs (A) - (H), as follows:
(A)
For each exempt policy or contract filed simultaneously
with its certificate, application, and exempt riders which are filed as part
of the entire policy or contract, a fee of $50 is required.
(B)
For a filing of exempt applications filed separately from
the exempt policy or contract to which it will be attached, a fee of $50 is
required.
(C)
For a filing of exempt riders filed separately from the
exempt policy or contract to which it will be attached, a fee of $50 is required.
(D)
For a filing of rates filed separately from the exempt
policy or contract to which it is applicable, and which is not subject to
approval by the department as specified in §3.1(11)(A) of this subchapter,
a fee of $50 is required.
(E)
For a filing of outlines of coverage filed separately from
the exempt policy or contract to which it is applicable, and which is not
subject to approval by the department as specified in §3.1(11)(A) of
this subchapter, a fee of $50 is required.
(F)
For a filing of alternate face pages filed subsequent to
the original approval of a policy for use with multiple employer trusteed
arrangements as defined in Insurance Code Articles 3.50, §1(5) and 3.51-6, §1(a)(3),
a fee of $50 is required.
(G)
For a filing of exempt insert pages filed separately from
the exempt policy or contract to which it is applicable, a fee of $50 is required.
(H)
For a filing of exempt matrix provisions to be used with
only exempt products, a fee of $50 per form with a maximum fee of $500 is
required.
(3)
The appropriate filing fees for filings other than those
specified in paragraphs (1) and (2) of this subsection are set forth in subparagraphs
(A) - (C) of this paragraph, as follows:
(A)
For a filing of outlines of coverage filed separately from
the policy or contract to which it is applicable, and which is subject to
review by the department, a fee of $50 is required.
(B)
For a filing of PPO disclosures filed separately from the
policy or contract to which it is applicable, and which is subject to review
by the department, a fee of $50 is required.
(C)
For a filing of Accident and Health or Life rates filed
separately from the policy or contract to which it is applicable, and which
is subject to review by the department, a fee of $50 is required.
(4)
Filings as described in §3.1(11)(B) of this subchapter
shall require no filing fee.
§3.8.Effective Date.
The provisions of these sections shall apply to any form received by
the department on or after June 1, 2003. Forms received by this department
prior to June 1, 2003 shall be governed by the laws in effect at the time
of the submission.
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 May 5, 2003.
TRD-200302776
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 1, 2003
Proposal publication date: December 6, 2002
For further information, please call: (512) 463-6327
Subchapter A. EXAMINATION AND FINANCIAL ANALYSIS
28 TAC §7.28
The Commissioner of Insurance adopts the repeal of §7.28
concerning the regulation of accounting of reinsurance agreements by insurers.
The repeal of the section is adopted without changes to the proposal as published
in the November 8, 2002 of the
Texas Register
(27
TexReg 10558) and will not be republished.
The repeal of the section is necessary to eliminate a redundancy between
the repealed section and §7.18, and the potential for conflicting interpretations.
The substantive provisions of the repealed section are contained in §7.18
which is the adoption of the National Association of Insurance Commissioners’
Accounting Practices and Procedures Manual, and includes Appendix A-791. The
repeal of §7.28 furthers the objective of §7.18 to codify statutory
accounting guidance into a single source in order to improve consistency in
the regulations applicable to the accounting standards, treatments, and practices
of insurers dong business in Texas. The substantive portions of the reinsurance
requirements contained in the repealed section are contained in §7.18.
The repeal of the section provides consistency in the regulations applicable
to the accounting standards, treatments and practices of insurers doing business
in Texas. As a result of the repeal of the section there will be more efficient
and standardized accounting by insurers licensed to do business in Texas.
Comment: Commenters raised concerns that the exemptions for assumption
reinsurance and for certain 100% coinsurance transaction provided in §7.28(b)(3)(A)
and (B) would no longer be available if the section is repealed and contend
that the provisions are not carried forward in §7.18.
Agency Response: The department disagrees. The department notes that the
rule applied to ceding insurers and not assuming insurers, and exemptions
are continued through §7.18 and the accompanying appendixes.
For: Texas Association of Life and Health Insurers and Central United Life
Insurance Company.
The repeal of the section is adopted under the Insurance Code
Articles 1.11, 1.32, 3.10, 3.28, 5.75-1, 21.39-B, and 21.49-1 and §36.001.
These articles authorize the Commissioner of Insurance to adopt rules to establish
or set standards for the evaluation of the financial condition of insurers
and health maintenance organizations, including reinsurance transactions,
reserves and insurance holding company system transactions. Section 36.001
authorizes the Commissioner of Insurance to adopt rules for the conduct and
execution of the duties and functions of the department as authorized by statute.
Subchapter A. Examination and Financial Analysis.
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 May 5, 2003.
TRD-200302779
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: May 25, 2003
Proposal publication date: November 8, 2002
For further information, please call: (512) 463-6327
28 TAC §7.1301, §7.1302
The Commissioner of Insurance adopts amendments to §7.1301
and new §7.1302 concerning the establishment of a billing system for
certain filings. Section 7.1301 is adopted with changes to the proposed text
as published in the December 6, 2002 issue of the
Texas Register
(27 TexReg 11476). Section 7.1302 is adopted without
changes to the proposed text and will not be republished.
The amendments and new section are necessary to permit the establishment
and implementation of a new billing system for certain filings submitted under
Chapters 3 and 11. Upon adoption of new §7.1302 and implementation of
a billing system, the fee(s) will no longer be required to be submitted with
the filing; instead, the regulated entity submitting the filing will be billed
by itemized invoice from the department.
New §7.1302 is necessary to streamline the collection and receipt
of filing fees. The billing system will reduce the process of refunding fee
amounts received in excess of the actual fee amount and eliminate the need
to reject filings due to insufficient fee amounts.
To permit the establishment of a billing system, new §7.1302 addresses
the mailing of invoices on a periodic basis for filings received and amounts
billed, and billing addresses and billing contact persons for regulated entities
submitting filings, including requirements for notifying the department of
a change of billing address or billing contact person information. The new
section also addresses departmental handling of filing fee account balances,
including filing fee accounts with invoice amounts past due and the placement
of a hold on a filing fee account for any invoice amount past due 120 days
or more.
Upon completion of the development and design of the billing system, the
department will issue a commissioner's bulletin to notify regulated entities
affected by the billing system of the official implementation date and of
the specific date when they should cease submitting filing fee(s) along with
certain filings to the department. Because of the implementation of the billing
system adopted in §7.1302, amendments were made to §7.1301. Express
fee amounts for certain filings are no longer specified in §7.1301; rather,
they are addressed in amendments adopted under Chapter 3, Subchapter A. Therefore,
express references to those filings have been deleted from this subchapter.
The amendments to Chapter 3, Subchapter A are adopted elsewhere in this issue
of the Texas Register. In §7.1301, the date has been changed to June
1, 2003 in order to complete technical and administrative tasks necessary
to implement the billing system. Minor changes were also made throughout this
section to correct punctuation.
No comments were received.
The sections are adopted pursuant to Insurance Code Articles
3.42, 3.53, 20A.22, 20A.32, and §36.001. Insurance Code Article 3.42(p)
provides that the commissioner is authorized to adopt such reasonable rules
that are within the standards and purposes of Article 3.42, and necessary
to implement and accomplish the specific provisions of Article 3.42. Insurance
Code Article 3.53, §7(H) authorizes the department to charge a fee for
forms or schedules filed under the article in an amount to be determined by
the department. Insurance Code Article 20A.22 provides that the commissioner
may promulgate such reasonable rules as are necessary and proper to carry
out the provisions of the HMO Act. Insurance Code Article 20A.32 requires
that the expenses for filing fees for every organization subject to Insurance
Code Chapter 20A shall be paid in accordance with rules adopted by the commissioner.
Insurance Code §36.001 authorizes the commissioner of insurance to adopt
rules for the conduct and execution of the powers and duties of the department
as authorized by statute.
§7.1301.Regulatory Fees.
(a)
Regulated entities subject to fees. The regulated entities
subject to the fees imposed by this section shall include all authorized insurers
writing any class of insurance in this state which are regulated by the Insurance
Code, Chapters 1-3, 6-20, 20A, 22, and 23. For filings and other actions received
by the department on and after June 1, 2003, the Texas Department of Insurance
shall charge these entities fees in amounts in accordance with the provisions
of this section. Filings or other actions received by the department on or
before June 1, 2003, shall be governed by this subchapter as it existed immediately
prior to June 1, 2003.
(b)
Fees for insurers with annual gross premium receipts less
than $450,000. As provided in the Insurance Code, Article 4.07, any insurer
to which the article applies and whose gross premium receipts are less than
$450,000 according to its annual statement for the preceding year ending December
31, shall be required to pay only one-half the amount of the fees required
to be paid under subsection (d) or subsection (e) of this section. The fees
will be collected at the higher rate unless the applicant can provide the
Texas Department of Insurance with satisfactory documentation that gross premium
receipts were less than $450,000.
(c)
Fees for specified filings pursuant to the Insurance Code,
Article 3.42. Fees for specified filings pursuant to the Insurance Code, Article
3.42 are set forth in Chapter 3, Subchapter A of this title (relating to Submission
Requirements for Filings and Departmental Actions Related to Such Filings)
and shall be governed thereby.
(d)
Fees for authorized insurers writing classes of insurance
in this state which are regulated by the Insurance Code, Chapters 1-3, 6-20,
20A, 22, and 23. For the following filings and actions, the fees shall be
as follows.
(1)
For classes of insurance for which statutory authority
exists for collecting annual statement fees, the fee for filing annual statements
shall be $250 unless otherwise specified.
(2)
For filing amendments to certificate of authority if charter
is not amended, the fee shall be $50.
(3)
For reservation of name, the fee shall be $100.
(4)
For renewal of reservation of name, the fee shall be $25.
(5)
For filing application for admission of a foreign or alien
insurance company, including issuance of certificate of authority, the fee
shall be $2,000.
(6)
For filing original charter, including issuance of certificate
of authority, the fee shall be $1,500.
(7)
For filing amendment to charter, including issuance of
certificate of authority, if a hearing is held, the fee shall be $250.
(8)
For filing amendment to charter, including issuance of
certificate of authority, if a hearing is not held, the fee shall be $125.
(9)
For filing designation of attorney for service of process
or amendment thereto, the fee shall be $25.
(10)
For filing a total reinsurance agreement, the fee shall
be $750.
(11)
For filing a partial reinsurance agreement, the fee shall
be $150.
(12)
For filing a direct reinsurance agreement pursuant to
the Insurance Code, Article 22.19, the fee shall be $150.
(13)
For filing for approval of reinsurance agreement pursuant
to the Insurance Code, Article 21.26, the fee shall be $750.
(14)
For filing for approval of merger pursuant to the Insurance
Code, Article 21.25, the fee shall be $750.
(15)
For accepting a security deposit, excluding deposits made
pursuant to the Insurance Code, Article 3.16, the fee shall be $100.
(16)
For substitution/amendment of a security deposit, excluding
deposits made pursuant to the Insurance Code, Article 3.16, the fee shall
be $50.
(17)
For certification of statutory deposit, the fee shall
be $10.
(18)
For filing notice of intent to relocate the books/records
pursuant to the Insurance Code, Article 1.28, the fee shall be $150.
(19)
For filing restated articles of incorporation for domestic/foreign
companies, the fee shall be $250.
(20)
For filing a statement pursuant to the Insurance Code,
Article 21.49-1, §5, for the first $9,900,000 of the purchase price or
consideration, the fee shall be $500.
(21)
For filing a statement pursuant to the Insurance Code,
Article 21.49-1, §5, if the purchase price or consideration exceeds $9,900,000,
an additional $250 for each $10 million exceeding $9,900,000 but not more
than a $5,000 total fee.
(22)
For filing registration statement pursuant to the Insurance
Code, Article 21.49-1, §3, the fee shall be $150.
(23)
For filing for review pursuant to the Insurance Code,
Article 21.49-1, §4 or Article 22.15, the fee shall be $250.
(24)
For filing for an exemption pursuant to the Insurance
Code, Article 21.49-1, §5(e), the fee shall be $250.
(e)
Other fees established by the Insurance Code, Article 4.07.
For the following filings, the fee shall be as follows.
(1)
For filing joint control agreement, the fee shall be $50.
(2)
For filing substitution/amendment to the joint control
agreement, the fee shall be $20.
(3)
For filing a change in attorney in fact, the fee shall
be $500.
(f)
Administrative procedures.
(1)
When a reinsurance agreement or merger agreement is filed
with the Texas Department of Insurance, as enumerated in subsection (d)(11)-(15)
of this section, the ceding or merged company will be the company upon which
the determination of the appropriate fee to be assessed will be based.
(2)
The fee relating to reinsurance transactions entered into
pursuant to the Insurance Code, Article 21.49-1, §4, and subsection (d)(24)
of this section shall be determined using the ceding company as a basis for
such fee.
(3)
When an amendment to a reinsurance agreement between affiliated
insurers is filed with the Texas Department of Insurance, as mentioned in
paragraph (1) of this subsection, the ceding company will be the insurer upon
which the determination of the appropriate fee to be charged will be based.
(4)
An amendment to the charter would constitute any change
in the original charter, including, but not limited to, name change, home
office change, increase in capital, conversion, and increase in lines.
(5)
The fee relating to affixing the official seal and certifying
to the seal shall be applied to all requests for certification, irrespective
of requesting party.
(6)
The fees for filing an acquisition statement pursuant to
the Insurance Code, Article 21.49-1, §5 and subsection (d)(21) and (22)
of this section shall apply to and be collected from the applicant whenever:
(A)
the applicant is a regulated entity subject to this section;
or
(B)
the company being acquired is a regulated entity subject
to this section.
(g)
Fees pursuant to the Texas Health Maintenance Organization
Act, §32. For the following filings and actions, the fees shall be as
follows.
(1)
For filing original application for certificate of authority,
the fee shall be $7,500.
(2)
For filing annual report, the fee shall be $250.
(3)
For all examinations made on behalf of the State of Texas
by the Texas Department of Insurance or under its authority, the fee shall
be in such amounts as the commissioner shall certify to be just and reasonable.
(4)
For filing evidence of coverage which requires approval,
the fee shall be $100.
(5)
For filing required by rule but which do not require approval,
the fee shall be $50.
(h)
Fees under the Insurance Code, Article 23.08. For the following
filings and actions, the fees shall be as follows.
(1)
For filing annual statement, the fee shall be $200.
(2)
For application for certificate of authority, the fee shall
be $1,500.
(3)
For issuance of additional certificate of authority and
amendment to same, the fee shall be $50.
(i)
Fees for filings pursuant to the Insurance Code, Article
3.53. Fees for filings pursuant to the Insurance Code, Article 3.53 are set
forth in Chapter 3, Subchapter A of this title and shall be governed thereby.
(j)
Fees under the Insurance Code, Chapter 3. For the following
filings and actions, the fees shall be as follows.
(1)
For valuing policies of life insurance, and for each $1
million of insurance or fraction thereof, $10.
(2)
For filing the annual statement, $250.
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 May 5, 2003.
TRD-200302778
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 1, 2003
Proposal publication date: December 6, 2002
For further information, please call: (512) 463-6327
Subchapter D. REGULATORY REQUIREMENTS FOR AN HMO SUBSEQUENT TO ISSUANCE OF CERTIFICATE OF AUTHORITY
28 TAC §11.301
The Commissioner of Insurance adopts amendments to §11.301
concerning certain health maintenance organization (HMO) filings. The amendments
are adopted with changes to the proposed text as published in the December
6, 2002 issue of the
Texas Register
(27 TexReg
11478).
The amendments to §11.301 are necessary to provide uniformity in the
establishment of a billing system for filing fees which is added by new §7.1302
published elsewhere in this issue of the Texas Register. Under new §7.1302,
filing fees for certain filings made pursuant to Chapters 3 and 11 will be
subject to the billing system. The new billing system will reduce the labor
intensive process of refunding fee amounts received in excess of the actual
fee amount and eliminate the need to reject filings due to insufficient fee
amounts.
Upon completion of the development and design of the billing system, the
department will issue a commissioner’s bulletin to notify regulated
entities affected by the billing system of the official implementation date
and of the specific date when they should cease submitting filing fee(s) along
with certain filings to the department. An HMO submitting a filing will be
billed by itemized invoice from the department. The amendments to §11.301
are necessary to ensure uniformity with and the effective and efficient use
of the new billing system created by §7.1302. Section 11.301 was changed
to correct a misspelled word in (5)(E) and to replace language which was inadvertently
omitted in a prior amendment to (7)(B).
No comments were received.
The amendments are adopted pursuant to Insurance Code Articles
20A.22, 20A.32, and §36.001. Insurance Code Article 20A.22 provides that
the commissioner may promulgate such reasonable rules as are necessary and
proper to carry out the provisions of the HMO Act. Insurance Code Article
20A.32 requires that the expenses for filing fees for every organization subject
to Insurance Code Chapter 20A shall be paid in accordance with rules adopted
by the commissioner. Insurance Code §36.001 authorizes the commissioner
of insurance to adopt rules for the conduct and execution of the powers and
duties of the department as authorized by statute.
§11.301.Filing Requirements.
Subsequent to the issuance of a certificate of authority, each HMO
is required to file certain information with the commissioner, either for
approval prior to effectuation or for information only, as outlined in paragraphs
(4) and (5) of this section and in §11.302 of this title (relating to
Service Area Expansion Requests). These requirements include filing changes
necessitated by federal or state law or regulations.
(1)
Completeness of filings. The department shall not accept
a filing for review until the filing is complete. An application to modify
the approved application for a certificate of authority which requires the
commissioner's approval in accordance with the Insurance Code, Articles 20A.04(b)
and 20A.09(l) is considered complete when all information required by this
section, §11.302 of this title, and §§11.1901-11.1903 of this
title (relating to Quality of Care) that is applicable and reasonably necessary
for a final determination by the department, has been filed with the department.
(2)
Identifying form numbers required. Each item required to
be filed pursuant to paragraphs (4) and (5) of this section must be identified
by a unique form number, adequate to distinguish it from other items. Such
identifying form numbers shall be composed of a total of no more than 40 letters,
numbers, symbols, and spaces.
(A)
The identifying form number must appear in the lower left-hand
corner of the page. In the case of a multiple page document, the identifying
form number must appear on the lower left-hand corner of the first page. Page
numbers should appear on subsequent pages.
(B)
If an item is to be replaced or revised subsequent to issuance
of a certificate of authority, a new identifying form number must be assigned.
A change in address or phone number on a form will not require a new identifying
form number. A new edition date added to the original identifying form number
is an acceptable way of revising the number so that it is identifiable from
any previously approved item; e.g., if G-100 was the originally approved number,
the revision may be numbered G-100 12/79. Changing the case of the suffix
is not considered to be a change in the number, e.g., "ED" and "ed" or "REV"
and "rev" are the same for form numbering purposes.
(3)
Attachments for filings. The filings required in paragraphs
(4) and (5) of this section must be accompanied by the following:
(A)
an original and four copies of the HMO certification and
transmittal form for each new, revised, or replaced item;
(B)
an original and four copies of such supporting documentation
as considered necessary by the commissioner for review of the filing; and
(C)
except for the filings outlined in paragraphs (4)(A), (B),
and (L), and (5)(C), (G), (K), (M), and (N) of this section, the applicable
filing fee for other filings as required by Insurance Code Article 20A.32,
as determined by §7.1301 of this title (relating to Regulatory Fees).
The fee(s) for filings outlined in paragraphs (4)(A), (B), and (L), and (5)(C),
(G), (K), (M), and (N) of this section are subject to the fee amounts described
in §7.1301(g) of this title, but shall not be attached with the filing.
Instead, the submission of such fee(s) is subject to the billing provisions
of §7.1302 of this title (relating to Billing System).
(4)
Filings requiring approval. Subsequent to the issuance
of a certificate of authority, each HMO shall file for approval with the commissioner
information required by any amendment to items specified in §11.204 of
this title if such information has not previously been filed and approved
by the commissioner. In addition, an HMO shall file with the commissioner
a written request to implement or modify the following operations or documents
and receive the commissioner's approval prior to effectuating such modifications:
(A)
the evidence of coverage and related forms, as described
in §11.501 of this title (relating to Forms Which Must Be Approved Prior
to Use);
(B)
a description and a map of the service area, with key and
scale, which shall identify the county or counties or portions thereof to
be served;
(C)
the form of all contracts described in §11.204(13)(A)
and (C) of this title, including any amendments to contracts described in §11.204(13)(A)
and (C) of this title and prior notification of the cancellation of any management
contracts in §11.204(13)(D) of this title;
(D)
any change in more than 10% of control of the HMO, as specified
in the definition of "control" in §11.2(b)(11) of this title (relating
to Definitions);
(E)
transactions with affiliates related to the purchase, construction,
or renovation of hospitals, medical facilities, administrative offices, or
any other property which represent more than one-half of 1.0% of admitted
assets of the HMO, as well as transactions involving the lease, operation,
or maintenance of hospitals, medical facilities, administrative offices, or
any other property from or by an affiliate if the monthly cost for such transaction
exceeds one-half of 1.0% of all the monthly expenses of the HMO or such agreement
places a lien on any property owned by the HMO;
(F)
dividends which do not meet the requirements specified
in §11.807 of this title (relating to Dividends);
(G)
any new or revised loan agreements, or amendments thereto,
evidencing loans made by the HMO to any affiliated person or to any medical
or other health care provider, whether providing services currently, previously,
or potentially in the future; and any guarantees of any affiliated person's
or health care provider's obligations to any third;
(H)
a copy of any proposed amendment to basic organizational
documents. If the approved amendment must be filed with the secretary of state,
an original, or a certified copy of such document with the original file mark
of the secretary of state, shall be filed with the commissioner;
(I)
a copy of any amendments to bylaws of the HMO, with a notarized
certification bearing the original signature of the corporate secretary of
the HMO that it is a true, accurate, and complete copy of the original;
(J)
any name, or assumed name, on a form, as specified in §11.105
of this title (relating to Use of the Term "HMO," Service Mark, Trademarks,
d/b/a);
(K)
any agreement by which an affiliate agrees to handle an
HMO's investments pursuant to §11.804 of this title (relating to Investment
Management by Affiliate Companies);
(L)
any material change in the HMO's emergency care procedures;
and
(M)
any original guarantees, modifications to existing guarantees
specified in §11.808 of this title (relating to Guarantee from a Sponsoring
Organization) and guarantees relating to Medicaid business as specified in §§11.1801-11.1806
of this title (relating to Solvency Standards for Managed Care Organizations
Participating in Medicaid).
(5)
Filings for information. Material filed under this paragraph
is not to be considered approved, but may be subject to review for compliance
with Texas law and consistency with other HMO documents. Each item filed under
this paragraph must be accompanied by a completed HMO certification and transmittal
form in addition to those attachments required under paragraph (3) of this
section. Within 30 days of the effective date, an HMO must file with the commissioner,
for information only, deletions and modifications to the following previously
approved or filed operations and documents:
(A)
the list of officers and directors and a biographical data
sheet for each person listed under the Insurance Code, Article 20A.04(a)(3),
on the officers and directors page and biographical affidavit forms in §11.204(5)(A)
and (B) of this title;
(B)
a copy of any notice of cancellation of fidelity bonds,
new fidelity bonds, or amendments thereto, for officers and employees, including
notarized certification by the corporate secretary or corporate president
that the material is true, accurate, and complete, as described in §11.204(7)
and (13)(D) of this title;
(C)
the formula or method for calculating the schedule of charges,
as defined in §11.2(b) of this title;
(D)
any change in the physical address of the books and records
described in §11.205 of this title (relating to Documents To Be Available
During Examinations);
(E)
any change of the certificate of authority for a domestic
or foreign HMO. If the HMO is a foreign HMO, a certified copy of the certificate
of authority and power of attorney must be submitted;
(F)
any new trademark or service mark, or any changes to an
existing trademark or service mark;
(G)
a copy of the form of any new contract or subcontracts
or any substantive changes to previously filed copies of forms of all contracts
between the HMO and any physicians or other providers described in §11.204(13)(B)
of this title, and copies of forms of all contracts between the HMO and an
insurer or group hospital service corporation to offer indemnity benefits,
whether utilized with all contracts or on an individual basis. If such contracts
are amended, each copy of such agreement must be marked to indicate revisions.
In addition, questions listed on the HMO certification and transmittal form,
must be answered;
(H)
any insurance contracts or amendments thereto, guarantees,
or other protection against insolvency, including the stop-loss or reinsurance
agreements, if changing the carrier or description of coverage, as described
in §11.204(15) of this title;
(I)
changes to any of the requirements mandated for guarantees
pursuant to §11.808 of this title (relating to Guarantee from a Sponsoring
Organization);
(J)
any change in the affiliate chart as described in §11.204(6)(A)
of this title;
(K)
the written description of health care plan terms and conditions
made available to any current or prospective group contract holder and current
or prospective enrollee of the HMO, including the enrollee handbook, pursuant
to the requirements of the Insurance Code, Article 20A.04(13) and §11.1600
of this title (relating to Information to Prospective and Current Group Contract
Holders and Enrollees);
(L)
modifications to any types of compensation arrangements,
such as compensation based on fee-for-service arrangements, risk-sharing arrangements,
or capitated risk arrangements, made to physicians and providers in exchange
for the provision of, or the arrangement to provide health care services to
enrollees, including any financial incentives for physicians and providers;
(M)
any material change in network configuration; and
(N)
a description of the quality assurance program, including
a peer review program, as required by the Insurance Code, Article 20A.05(a)(1).
Descriptions of arrangements for sharing pertinent medical records between
physicians and/or providers contracting or subcontracting pursuant to paragraph
(13)(B) of §11.204 of this title with the HMO and assuring the records'
confidentiality must also be provided.
(6)
Approval time period. Any modification for which commissioner's
approval is required is considered approved unless disapproved within 30 days
from the date the filing is determined by the department to be complete. The
commissioner may postpone the action for a period not to exceed 30 days, as
necessary for proper consideration. The HMO will be notified by letter of
any postponement.
(7)
Filing Review Procedure. Within 20 days from the department's
receipt of an initial filing for commissioner's approval under this section,
the department shall determine whether the filing is complete or incomplete
for purposes of acceptance for review and, if found to be incomplete, the
department shall issue a written or electronic notice to the HMO of its incomplete
filing. A filing under this subchapter that is subject to the billing provisions
of §7.1302 of this title and which, upon receipt by the department, fails
to comply with the requirements of that section, will be deemed to be incomplete
for purposes of this subchapter.
(A)
Incomplete filing. The written notice of an incomplete
filing shall state that the filing is not complete and has not been accepted
for review. In addition, the notice shall specify the information, documentation
and corrections necessary to make the filing complete, as provided in paragraph
(1) of this section. If a filing is resubmitted, in whole or in part, and
is still incomplete, an additional written notice shall be issued. Such notice
shall specify the corrections or information necessary for completeness, and
state that the 30 day deemer will not begin until the date the department
determines the filing to be complete. If a filing is not resubmitted within
30 days of the date of the written notice of incompleteness, then the filing
shall be considered withdrawn by the department and closed.
(B)
Processing of complete filing. The department shall in
writing approve or disapprove a complete filing within the period of time
set forth in paragraph (6) of this section, beginning on the date the filing
is determined to be complete. The HMO may waive in writing the statutory deemer.
(C)
Pending status. Complete filings will be approved or disapproved
in writing within the statutory deemer period set forth in paragraph (6) of
this section unless, prior to the department's issuance of notice of proposed
negative action pursuant to §1.704(a) of this title (relating to Summary
Procedure; Notice), the HMO has been contacted by the department regarding
corrections or additional information necessary for commissioner's approval,
and files with the department a written consent to waive the statutory deemer.
The deemer shall be waived upon the department's receipt of the HMO's written
consent. The filing shall be held in a pending status for 45 days from the
date of the applicable statutory deemer, either on the 30th or 60th day from
the date the filing is complete. If the necessary corrections or additional
information have not been filed by the end of 45 days the filing shall be
considered withdrawn.
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 may 5, 2003.
TRD-200302780
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: June 1, 2003
Proposal publication date: December 6, 2002
For further information, please call: (512) 463-6327
Subchapter U. UTILIZATION REVIEWS FOR HEALTH CARE PROVIDED UNDER WORKERS' COMPENSATION INSURANCE COVERAGE
Chapter 3.
LIFE, ACCIDENT AND HEALTH INSURANCE AND ANNUITIES
Subchapter A. SUBMISSION REQUIREMENTS FOR FILINGS AND DEPARTMENTAL ACTIONS RELATED TO SUCH FILINGS
Chapter 7.
CORPORATE AND FINANCIAL REGULATION
Subchapter M. REGULATORY FEES
Chapter 11.
HEALTH MAINTENANCE ORGANIZATION
Chapter 19.
AGENTS' LICENSING