Proposed Action on Rules
EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE, CHAPTER 5, SUBCHAPTER
L, ARTICLE 5.96
The Commissioner of Insurance will consider amendments proposed by the
staff of the WC Classifications, Premium Calculation and Research Division
of the Property and Casualty Insurance program at the Texas Department of
Insurance to the Texas Basic Manual of Rules, Classifications and Experience
Rating Plan for Workers’ Compensation and Employers’ Liability
Insurance (the Manual). The 79th Texas Legislature enacted House Bill 7 which,
in pertinent part, authorizes the establishment of workers' compensation health
care networks for the provision of workers' compensation medical benefits;
and provides the statutory framework for the establishment of standards for
the certification, administration, evaluation, and enforcement of the delivery
of health care services to injured employees by workers’ compensation
health care networks. The purpose of these proposed amendments to the Manual
is to set forth the rules and provide the endorsement to be used for policyholders
who elect to provide workers’ compensation health care services to injured
employees through a certified workers’ compensation health care network.
Staff’s petition (Ref. No.W-0206-01-I) was filed on February 8, 2006.
A public hearing on this matter will not be held unless a separate request
for a hearing is submitted to the Office of the Chief Clerk during the comment
period as defined herein.
The proposed amendments to the Manual are filed pursuant to Texas Insurance
Code Articles 5.56 and 5.96. Article 5.56 requires the Commissioner of Insurance
to prescribe standard policy forms to be used by all companies writing workers’
compensation insurance in Texas. Article 5.96 authorizes the Commissioner
to prescribe, promulgate, adopt, approve, amend or repeal standard and uniform
manual rules, rating plans, classification plans, statistical plans and policy
and endorsement forms for workers’ compensation insurance.
The staff has proposed amendments to the Manual as follows:
1. Amend Rule VI, relating to Rates and Premium Determination, by adding
a new Section K, to be entitled "Certified Workers’ Compensation Health
Care Network." The new section states that the department anticipates that
certified workers’ compensation health care networks will help reduce
the cost of workers’ compensation claims in Texas and that cost savings,
both anticipated and actual, should be passed on to policyholders participating
in the networks in the form of a premium credit. The amount of the premium
reduction, if applicable, is shown on the Information Page of the policy and
is determined by applying the network credit factor to the estimated modified/schedule
rating premium. The premium reduction could be prorated based on when during
the policy period the policyholder makes the election to participate or makes
the election to terminate participation in a certified network. The premium
reduction could be forfeited if the carrier determines that the policyholder
failed to provide employees notice of network requirements that are mandated
in new subsection K(2)(a) or the employee acknowledgement form referenced
in new subsection K(2)(b) of the rule. Before a policyholder’s premium
reduction can be forfeited by the insurance carrier, a letter giving 30 days
notice of possible premium reduction forfeiture must be sent by the insurance
carrier to the policyholder explaining why the premium credit is being forfeited.
If the policyholder corrects the reason(s) for the potential forfeiture of
the premium credit within the 30 days, the premium reduction will not be forfeited.
2. Amend Appendix A, relating to Procedures. Specifically, the staff proposes
to amend subsection A(6), relating to Policy Issuance, by adding to the list
of items that must be included on the Information Page of the policy, the
network credit factor, if any is applicable. This amendment will necessitate
a re-ordering and re-numbering of the items listed in subsection A (6).
3. Require a new endorsement, entitled the "Texas Health Care Network Endorsement
WC 42 04 08," to be attached to all workers’ compensation policies when
the policyholder elects to provide workers’ compensation health care
services to injured employees through a certified workers’ compensation
health care network. The language of the proposed endorsement advises the
policyholder that there may be a premium reduction because of the policyholder’s
election to provide workers’ compensation health care services to injured
employees through a certified workers’ compensation health care network,
and explains the information that the carrier would provide to policyholders
pursuant to new Section K of Rule VI.
The staff requests that the proposed amendments to the Texas Basic Manual
of Rules, Classifications and Experience Rating Plan for Workers’ Compensation
and Employers’ Liability Insurance as proposed herein be adopted effective
15 days after notice of adoption is published in the
Texas Register
.
The Commissioner has jurisdiction over this matter pursuant to the Insurance
Code, Articles 5.56 and 5.96.
A copy of the full text of the proposed amendments is available for review
in the Office of the Chief Clerk of the Texas Department of Insurance, 333
Guadalupe Street, Austin, Texas 78714-9104. For further information or to
request copies of the amendments, please contact Ms. Sylvia Gutierrez at (512)
363-6327 (refer to Ref. No. W-0206-01-I).
Written comments to these proposed amendments may be submitted no later
than 5:00 p.m. on March 20, 2006 to Gene Jarmon, General Counsel and Chief
Clerk, Texas Department of Insurance, P.O. Box 149104, MC 113-2A, Austin,
Texas 78714-9104. An additional copy of the comments must be submitted to
Nancy Moore, Deputy Commissioner, WC Classification, Premium Calculation and
Research, Texas Department of Insurance, P.O. Box 149104, MC 105-2A, Austin,
Texas 78714-9104.
This notification is made pursuant to the Insurance Code, Article 5.96,
which exempts it from the requirements of the Government Code, Chapter 2001
(Administrative Procedure Act).
TRD-200600652
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Filed: February 8, 2006