Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 1.
GENERAL ADMINISTRATION
Subchapter C. MAINTENANCE TAXES AND FEES
28 TAC §1.414
The Commissioner of Insurance adopts an amendment to §1.414
concerning assessment of maintenance taxes and fees for payment in the year
2004. The amended section is adopted with changes to the proposed text as
published in the November 21, 2003, issue of the
Texas Register
(28 TexReg 10416).
The amendment is necessary to adjust the rates of assessment for maintenance
taxes and fees for 2004 which will provide the revenue necessary to fund appropriations
made by the Legislature to fund regulation of the insurance industry in Texas
by the department. In subsection (c)(1) the rate per enrollee for multi-service
health maintenance organizations is changed to $.89. The original proposal
mistakenly set the rate at $.90. The preamble to the original proposal correctly
stated the rate. The change will not impact any persons not affected by the
original proposal, will not increase costs and will not be more burdensome
to companies than the original proposal.
Section 1.414 sets rates of assessment and applies those rates to the gross
premium receipts for the calendar year 2003, or some other basis designated
by statute, to life, accident, and health insurance; motor vehicle insurance;
casualty insurance, and fidelity, guaranty and surety bonds; fire insurance
and allied lines, including inland marine; workers' compensation insurance;
title insurance; health maintenance organizations; third party administrators;
and corporations issuing prepaid legal services contracts. The department
anticipates the adopted rates will produce revenue of $34,205,227 to the state's
general revenue fund.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Insurance Code Articles 4.17,
5.12, 5.24, 5.49, 5.68, 9.46, 21.07-6 §21, 23.08A, and 20A.33 and §36.001.
These articles provide authorization for the Texas Department of Insurance
to assess maintenance taxes and fees for the lines of insurance and related
activities specified in §1.414. Article 4.17 establishes a maintenance
tax based on insurance premiums for life, accident, and health coverage and
the gross considerations for annuity and endowment contracts. Article 5.12
establishes a maintenance tax based on insurance premiums for motor vehicle
coverage. Article 5.24 establishes a maintenance tax based on insurance premiums
for casualty insurance and fidelity, guaranty and surety bonds coverage. Article
5.49 establishes a maintenance tax based on insurance premiums for fire and
allied lines coverage, including inland marine. Article 5.68 establishes a
maintenance tax based on insurance premiums for workers' compensation coverage.
Article 9.46 establishes a maintenance fee based on insurance premiums for
title coverage. Article 21.07-6 §21 establishes a maintenance tax based
on the gross amount of administrative or service fees for third party administrators.
Article 23.08A establishes a maintenance tax based on gross revenue of corporations
issuing prepaid legal service contracts. The Texas Health Maintenance Organization
Act, Section 33 (Article 20A.33), establishes an annual tax based on the gross
amounts of revenues collected for the issuance of health maintenance certificates
or contracts. Section 36.001 provides that the Commissioner may adopt any
rules necessary and appropriate to implement the powers and duties of the
Texas Department of Insurance under the Insurance Code and other laws of this
state.
§1.414.Assessment of Maintenance Taxes and Fees, 2004.
(a)
The following rates for maintenance taxes and fees are
assessed on gross premiums of insurers for calendar year 2003 for the lines
of insurance specified in paragraphs (1) - (5) of this subsection:
(1)
for motor vehicle insurance, pursuant to the Insurance
Code Article 5.12, the rate is .035 of 1.0%;
(2)
for casualty insurance, and fidelity, guaranty and surety
bonds, pursuant to the Insurance Code Article 5.24, the rate is .091 of 1.0%;
(3)
for fire insurance and allied lines, including inland marine,
pursuant to the Insurance Code Article 5.49, the rate is .188 of 1.0%;
(4)
for workers' compensation insurance, pursuant to the Insurance
Code Article 5.68, the rate is .030 of 1.0%;
(5)
for title insurance, pursuant to the Insurance Code Article
9.46, the rate is .045 of 1.0%.
(b)
The rate for the maintenance tax to be assessed on gross
premiums for calendar year 2003 for life, health, and accident insurance and
the gross considerations for annuity and endowment contracts, pursuant to
the Insurance Code Article 4.17, is .026 of 1.0%.
(c)
Rates for maintenance taxes are assessed for calendar year
2003 for the following entities:
(1)
pursuant to the Texas Health Maintenance Organization Act, §33
(Insurance Code Article 20A.33), the rate is $.30 per enrollee for single
service health maintenance organizations, $.89 per enrollee for multi-service
health maintenance organizations and $.30 per enrollee for limited service
health maintenance organizations;
(2)
pursuant to the Insurance Code Article 21.07-6, §21,
the rate is .150 of 1.0% of the correctly reported gross amount of administrative
or service fees for third party administrators; and
(3)
pursuant to the Insurance Code Article 23.08A, the rate
is .022 of 1.0% of correctly reported gross revenues for corporations issuing
prepaid legal service contracts.
(d)
The enactment of Senate Bill 14, 78th Legislature, Regular
Session, relating to certain insurance rates, forms, and practices, did not
affect the calculation of the maintenance tax rates or the assessment of the
taxes.
(e)
The taxes assessed under subsections (a), (b), and (c)
of this section shall be payable and due to the Comptroller of Public Accounts,
Austin, TX 78774-0100 on March 1, 2004.
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 31, 2003.
TRD-200308937
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 20, 2004
Proposal publication date: November 21, 2003
For further information, please call: (512) 463-6327
Subchapter J. EXAMINATION EXPENSES AND ASSESSMENTS
28 TAC §7.1012
The Commissioner of Insurance adopts an amendment to §7.1012
concerning assessments to cover the expenses of examining insurance companies.
The amendment is adopted without changes to the text as proposed in the November
21, 2003, issue of the
Texas Register
(28
TexReg 10418) and will not be republished.
The amendment is necessary to provide a rate of assessment for domestic
and foreign insurance company examination expenses in 2004 which will provide
the revenue necessary to fund the appropriations made by the Legislature.
Section 7.1012 provides the method and rates of assessment for examination
expenses of foreign and domestic insurance companies. Rates of assessment
are levied against and collected from each domestic insurance company based
on admitted assets and gross premium receipts for the 2003 calendar year,
and from each foreign insurance company examined during the calendar year
2004 based on a percentage of the gross salary paid to an examiner for each
month or part of a month during which the examination is made. The department
anticipates that the adopted rate will produce revenue of $8,019,883 to the
state’s general revenue fund. The expenses and charges to be assessed
are in addition to, and not in lieu of, any other charge which may be made
under the law, including the Insurance Code Article 1.16.
No comments were received regarding adoption of the amendment.
The amendment is adopted under the Insurance Code Article 1.16
and §36.001. Article 1.16(a) and (b) authorize the Commissioner of Insurance
to make assessments necessary to cover the expenses of examining insurance
companies and to comply with the provisions of the Insurance Code Articles
1.16, 1.17, and 1.18, in such amounts as the Commissioner certifies to be
just and reasonable. In addition, Article 1.16(c) provides that expenses incurred
in the examination of foreign insurers by Texas examiners shall be collected
by the Commissioner by assessment. Section 36.001 provides that the Commissioner
may adopt any rules necessary and appropriate to implement the powers and
duties of the Texas Department of Insurance under the Insurance Code and other
laws of this state.
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 31, 2003.
TRD-200308936
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 20, 2004
Proposal publication date: November 21, 2003
For further information, please call: (512) 463-6327
Subchapter E. EXAMINATIONS AND ANNUAL REPORTS
Chapter 7.
CORPORATE AND FINANCIAL REGULATION
Chapter 25.
INSURANCE PREMIUM FINANCE