Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 1.
GENERAL ADMINISTRATION
Subchapter E. NOTICE OF TOLL-FREE TELEPHONE NUMBERS AND PROCEDURES FOR OBTAINING INFORMATION AND FILING COMPLAINTS
28 TAC §1.601
The Commissioner of Insurance adopts amendments to §1.601,
concerning the appropriate wording for a notice insurers and health maintenance
organizations must deliver to consumers with each insurance policy, certificate,
or evidence of coverage issued or renewed in the State of Texas. The amendments
are adopted with changes to the proposed text published in the September 22,
2006 issue of the
Texas Register
(31 TexReg
8074).
Currently, the notice required by §1.601 only includes the Texas Department
of Insurance’s mailing address and telephone number. The adopted amendments
require that the notice include the Department’s internet and e-mail
addresses. The adopted amendments also make minor formatting changes to the
notice, update obsolete statutory citations in subsection (a) as a result
of the legislative enactment of the nonsubstantive Insurance Code revision,
and delete subsection (e). Adding the Department’s internet and e-mail
addresses to the notice increases awareness of additional and useful methods
of communication the public can use to contact the Department in order to
make inquiries, file complaints, or gather more information about insurance
topics of interest. By using the internet, consumers can have access to valuable
information at any time, including much of the information that Insurance
Code §521.052 requires the Department to provide, including: information
collected and maintained by the Department relating to the number and disposition
of complaints against an insurer, the kinds of coverage available to a consumer
through any insurer writing insurance in this state, an insurer’s admitted
assets-to-liabilities ratio, and other appropriate information collected and
maintained by the Department. Also, e-mail allows Texas consumers to send
inquiries or file complaints with the Department at their convenience.
The Department’s website was first published on January 23, 1997.
In the agency’s first year online, the website received 457,635 page
hits. By 2005, the number of page hits increased by 57 times to 26,174,884.
The astronomical growth in page hits indicates that more and more consumers
are taking advantage of the convenience of electronic communication.
Because §1.601 was adopted and last amended before internet communication
was common, the current notice requirement does not include the Department’s
internet or e-mail addresses. Today, as the Department’s statistics
suggest, internet use is becoming a preferred medium for sharing information.
It is also a valuable tool for consumers that makes government more accessible;
therefore, it is reasonable and necessary to notify policyholders of the Department’s
online presence.
The amended notice makes minor formatting changes: a colon and period have
been added where appropriate, "FAX #" is replaced by "Fax:" to be consistent
with the formatting of "E-mail:" and "Web:" in Item 6, and spacing is adjusted
to ensure that the form will fit on a single page.
The adopted amendments also update statutory references in subsection (a).
Articles 21.71, 1.35, and 1.35D were repealed by Acts 2003, 78th Legislature,
Chapter 1274, §2, effective April 1, 2005, and were re-adopted as §§521.103,
521.005, and 521.056, respectively, in the same non-substantive Insurance
Code revision.
The final adopted amendment deletes subsection (e), which addresses the
use of existing inventories of preprinted forms because it is outdated. The
subsection only applied to circumstances that could have existed prior to
September 1, 1992. Therefore, subsection (e) is no longer necessary. Existing
subsections (f) and (g) have been re-designated accordingly.
The Department has changed some of the language in the text of the rule
as proposed. The changes, however, do not introduce new subject matter or
affect persons in addition to those subject to the proposal as published.
The changes are as follows. A minor spelling error has been corrected; "telephono"
has been replaced by "teléfono". The references to old mail codes in §1.601(c)(2)(A)
has been replaced with new mail codes. The Department has also changed the
proposed effective date from January 1, 2007, to July 1, 2007, in order to
allow insurers to make use of existing inventories and switch to the amended
notice when the timing is most appropriate. A new subsection (g) has been
added to state the new effective date. Existing notices printed according
to the requirements in current §1.601 may be used through June 30, 2007.
New notices can be produced in the regular course of business for use on or
before July 1, 2007.
The adopted amendments to §1.601(a)(1) update obsolete statutory citations
as a result of the legislative enactment of the nonsubstantive Insurance Code
revision. The adopted amendments to the notice required by §1.601(a)(3)
adds the Department’s internet and e-mail addresses and makes minor
formatting changes to the notice. Because §1.601(e) was deleted, subsections
(f) and (g) have been re-designated accordingly and adopted as §1.601(e)
and §1.601(f) respectively. Section 1.601(g) provides an effective date
for the amendments of July 1, 2007.
The Department did not receive any comments on the proposed amendments.
The amendments are adopted under the Insurance Code, §§521.005,
521.103, 521.101, 1271.054, 1271.101, 843.151, and 36.001. Under §521.005(a),
each insurance policy delivered or issued for delivery in this state must
include with the policy a brief written notice that includes a suggested policyholder
dispute procedure, the Department’s name and address, and the Department’s
toll-free number. Under §521.005(b), the Commissioner is specifically
charged with adopting the appropriate wording for the notice. The Commissioner
is also authorized by §521.103(b) to adopt rules governing the manner
in which an insurer’s or HMO’s toll-free telephone number appears
on the insurance policy or evidence of coverage. Section 521.101 provides
that the Insurance Code, Chapter 521, Subchapter C (Health Maintenance Organization
or Insurer Toll-free Number for Information and Complaints) applies to a health
maintenance organization authorized to engage in the business of a health
maintenance organization in this state or an insurer organized to engage in
the business of insurance in this state. Section 1271.054 requires that an
evidence of coverage contain a clear and understandable description of the
HMO’s methods for resolving enrollee complaints. Section 1271.101(a)
provides that an evidence of coverage or an amendment of an evidence of coverage
may not be issued or delivered to a person in this state until the form of
the evidence of coverage or amendment has been filed with and approved by
the Commissioner. Section 843.151 authorizes the Commissioner to adopt reasonable
rules as necessary and proper to implement Chapter 843 (Health Maintenance
Organizations). Section 36.001 provides that the Commissioner of Insurance
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.
§1.601.Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures.
(a)
Purpose and applicability.
(1)
The purpose of this section is to provide the means by
which insurers and health maintenance organizations (HMOs) may comply with
the notice requirements of the Insurance Code §521.103, and the means
by which insurers may comply with the notice requirements of the Insurance
Code §521.005 and §521.056. Compliance with this section is deemed
compliance with these notice requirements.
(2)
Except as provided by subsection (b)(3), this section applies
to any new or renewal insurance policy, bond, annuity contract, subscriber
contract, health care plan, certificate, and evidence of coverage issued for
delivery in this state on or after May 1, 1992.
(3)
All policies, certificates, or evidences of coverage which
are delivered, issued for delivery, or renewed in the State of Texas on or
after May 1, 1992, by insurers or HMOs shall have the notice included as the
first, second, or third page of the policy, certificate, evidence of coverage,
or first written communication indicating renewal of coverage, pursuant to
the provisions of subsection (b) of this section. The notice must appear on
a full, separate page with no text other than that provided in this section.
The form of the notice shall be as provided by subsection (b) of this section.
The item numbers 1 - 8 in the left-hand column of this form correspond to
the respective paragraphs of subsection (b) of this section, and the item
numbers may be omitted from the notice.
Figure: 28 TAC §1.601(a)(3) (.pdf)
(b)
Notice requirements. Each respectively numbered item in
the notice provided in subsection (a)(3) of this section must be set out as
provided in this subsection. There must be at least one blank line between
each item, but the text within each item may be single-spaced. The Spanish
portion of each item included in a company's notice is required only for personal
automobile, homeowners, and life, accident and health policies, certificates,
and evidences of coverage. Text shall be in at least 10-point type. The letterhead
of the insurer or HMO and any automated form identification numbers may be
included on the notice.
(1)
Item 1 must be included in all notices. "Important Notice"
and "Aviso Importante" must be in all capital letters and in at least 10-point
boldface type. There must be at least one blank line below "Important Notice"
and "Aviso Importante."
(2)
Item 2 is optional. The title for the English portion may
be either "agent," "third party administrator," "managing general agent,"
or "employee benefits coordinator." The title for the Spanish portion may
be either "agente," "administrador tercero," "agente general," or "administrador
de beneficios para empleados." In lieu of a specific telephone number, the
insurer or HMO may refer to the applicable telephone number and where it can
be found.
(3)
Item 3 is required unless one of the exemptions provided
in this subsection applies. For purposes of this section a toll-free telephone
number is one which can be used by any covered person to obtain information
or make a complaint without incurring long-distance calling expenses. The
insurer's or HMO's toll-free number must appear in at least 10-point boldface
type and must be preceded and followed by one blank line. Item 3 is not required
for an insurer or HMO:
(A)
whose gross initial premium receipts collected in this
state are less than $2 million a year;
(B)
with respect to fidelity, surety, or guaranty bonds;
(C)
that is a surplus lines insurer; or
(D)
with respect to certificates of insurance issued under
a group policy:
(i)
if the insurer does not administer the group policy or
determine questions of coverage; or
(ii)
if the policyholder to whom the policy is issued is an
employer or a labor union.
(4)
Item 4 is optional. If used, the insurer's or HMO's name
and address must be inserted.
(5)
Item 5 is required on all notices. The toll-free number
must be in at least 10-point boldface type and must be preceded and followed
by one blank line.
(6)
Item 6 is required on all notices.
(7)
Item 7 is required on all notices except those notices
provided by HMOs with evidences of coverage. "Premium or claim disputes" and
"Disputas sobre primas o reclamos" must be in all capital letters and 10-point
boldface type. The insurer may insert either "agent," "company," or "agent
or company" and may insert either "el agente," "la compania," or "el agente
o la compania."
(8)
Item 8 is required on all notices. "Attach this notice
to your policy" and "Una este aviso a su poliza" must be in all capital letters
and 10-point boldface type.
(c)
Exceptions to notice requirements for insurer's toll-free
number.
(1)
Requirements. Any exception claimed pursuant to subsection
(b)(3)(A) of this section for a policy, certificate, or evidence of coverage
delivered, issued for delivery, or renewed in a given year must be based on
gross initial premium receipts collected in Texas during the previous calendar
year. Any insurer or health maintenance organization claiming an exception
must provide to the Texas Department of Insurance, at a minimum, the following
information:
(A)
a statement reciting the statutory basis for the exception;
(B)
a statement detailing the amount of gross initial premium
receipts collected in this state for the calendar year immediately preceding
the calendar year for which an exception is claimed; and
(C)
an affirmation by the chief executive officer or chief
financial officer of the insurer or health maintenance organization certifying
that he or she has reviewed the information and that such filed information
is true, accurate, and complete, based upon that person's best knowledge,
information, and belief.
(2)
Procedure. This statement must be filed separately from
all other forms and exception statements filed with respect to other matters
pending before the department. Claims for exception must be addressed to the
appropriate regulatory division within the department.
(A)
Mail codes for the respective divisions are as follows:
(i)
Life, Accident, and Health 106-1A;
(ii)
Property and Casualty (including Workers' Compensation)
104-3B;
(iii)
Title 106-2T;
(iv)
Risk Retention Groups 305-2C;
(v)
HMO 106-1E.
(B)
Exception statements should be filed with the Texas Department
of Insurance, (Name of Division), (Mail Code #), P.O. Box 149104, Austin,
Texas 78714-9104.
(3)
Duration of exception. Exceptions remain in effect for
one year. The information required by paragraph (1) of this subsection must
be provided to the department no later than May 1, 1992, for calendar year
1992, and no later than March 15 of any subsequent year for which an exception
is claimed.
(4)
Policy and form filings. When an insurer or health maintenance
organization files a policy form or evidence of coverage with the department
for information or review, any exception to the requirements of this section
pertaining to the insurer's toll-free telephone number must be noted in the
filing. If a prior exception has not been granted, the documentation required
by paragraph (1) of this subsection must be filed.
(5)
Records maintenance. Except as specifically provided in
subparagraphs (A) and (B) of this paragraph, beginning with calendar year
1993, any insurer or health maintenance organization claiming an exception
must maintain a system by which information pertaining to receipt of initial
premiums is tracked on a calendar year basis. This information shall include
for each new policy written during a calendar year the following: the policy
number; the effective date of the policy; and the amount of initial premium
received, including any membership fees, assessments, dues, and any other
considerations for such insurance. Such information and any other data upon
which the company relied in making the determination that it was entitled
to the exception shall be made available to the department upon request and
is subject to examination by the department. Failure by any insurer or HMO
to maintain the information required in this paragraph or to provide such
information to the department upon request constitutes grounds for disciplinary
action which may result in the cancellation, revocation, or suspension of
such insurer's or HMO's certificate of authority.
(A)
Any insurer or HMO which is authorized to write business
in Texas and which claims an exception to the maintenance of a toll-free telephone
number for a calendar year is not required to maintain information pertaining
to initial premium receipts as set out in this paragraph in order to claim
the exception if the exception is based on the criteria set out in any of
clauses (i) - (iv) of this subparagraph, as follows:
(i)
such insurer or HMO claims the exception based on receipt
of gross premiums of less than $2 million for the prior calendar year for
business written in this state, as reported on its annual statement;
(ii)
such insurer or HMO claims the exception based on receipt
of gross first-year premiums of less than $2 million for the prior calendar
year for all business, as reported on its annual statement;
(iii)
such insurer or HMO writes business only in Texas and
claims the exception based on receipt of gross first-year premiums of less
than $2 million for the prior calendar year, as reported on its annual statement;
or
(iv)
such insurer or HMO claims the exception based on receipt
of gross initial first-year premiums of less than $2 million for business
written in Texas, as reported on its annual statement.
(B)
Any insurer or HMO which is authorized to write business
in Texas, but which does not meet the criteria of subparagraph (A) of this
paragraph and which claims an exception based on receipt of gross first-year
premiums of less than $2 million for business written in this state must maintain
a system by which information pertaining to receipt of first-year premiums
for Texas business is tracked on a calendar year basis. This information shall
include for each new policy written during a calendar year the following:
the policy number; effective date of the policy; and amount of the first-year
premium received, including any membership fees, assessments, dues, and any
other considerations for such insurance.
(d)
Policies in force prior to May 1, 1992, and renewed on
or after May 1, 1992. The notice required to be provided by this section shall
be provided with the first premium notice, or other communication indicating
renewal of the coverage mailed or delivered after May 1, 1992.
(1)
For all policies, certificates or evidences of coverage
in force prior to May 1, 1992, and renewed by any insurer or health maintenance
organization on or after May 1, 1992, the notice required to be provided by
this section shall either be mailed or be personally delivered to the policyholder,
certificate holder, or enrollee, except as provided by paragraph (2) of this
subsection.
(2)
For all group policies in force prior to May 1, 1992, and
renewed by any insurer or health maintenance organization on or after May
1, 1992, the notice required to be provided by this section may be provided
to the group policyholder for delivery to each certificate holder or enrollee
under the group policy, or it may be mailed directly to each certificate holder
or enrollee by the insurer or health maintenance organization.
(e)
Policies, bonds, annuity contracts, and certificates. Policies,
bonds, annuity contracts, and certificates subject to the provisions of this
section which required prior approval and were approved or filed prior to
May 1, 1992, may be delivered or issued for delivery with the notice required
by this section without refiling for approval.
(f)
Additions to group coverage. When an individual is added
as a certificate holder, annuitant, or enrollee to a policy or plan issued,
delivered, or renewed on or after May 1, 1992, the notice required by this
section must be included as the first, second, or third page of the certificate,
annuity contract, or evidence of coverage.
(g)
These amendments are effective July 1, 2007.
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 January 2, 2007.
TRD-200700001
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: January 22, 2007
Proposal publication date: September 22, 2006
For further information, please call: (512) 463-6327