PART 1. TEXAS DEPARTMENT OF INSURANCE
SUBChAPTER B. INSURANCE ADVERTISING, CERTAIN TRADE PRACTICES, AND SOLICITATION
The Texas Department of Insurance proposes amendments to §21.103(c)(5) and §21.114(7)(C), relating to required form and content of insurance advertisements and rules pertaining specifically to life insurance and annuity advertising. The proposed amendments are necessary to correct clerical errors contained in Commissioner's Order No. 07-1050 entered and dated November 20, 2007, and published in the November 30, 2007, edition of the Texas Register (32 TexReg 8830), effective December 9, 2007.
Amendment to §21.103(c)(5). It is necessary to amend §21.103(c)(5) because it contains an erroneous internal reference. Section 21.103 specifies certain required form and content of advertisements that insurers are allowed to use in Texas to advertise their insurance products to Texas consumers. Commissioner's Order No. 07-1050 adopted an amendment to §21.103(c) to implement the provision of HB 2251, 80th Legislature, Regular Session, effective September 1, 2007, codified as Insurance Code §541.082(c). Section 541.082(c) allows the Commissioner of Insurance to permit specified disclosures required in Internet advertising to be made through links to web pages containing the required disclosures. The adopted amendment was also necessary to require that such a link be clearly labeled and conspicuously placed near the relevant information to which it relates. The adopted amendment further identifies certain specific disclosures in new §21.103 (c)(1) - (5) which may be satisfied through such links. In Commissioner's Order No. 07-1050, §21.103(c)(5) refers to "§21.114 (3)(A) of this subchapter (relating to Rules Pertaining Specifically to Life Insurance and Annuity Advertising)." This reference to §21.114(3)(A) is intended to be a reference to the "identification of policy disclosure" that requires the form number or numbers of a policy advertised to be clearly identified in an invitation to contract. Instead, §21.114(3)(A) refers to advertising requirements for the description of premiums and costs paid for individual insurance and annuities. The correct reference is §21.114(1)(A). Therefore, it is necessary to amend §21.103(c)(5) to reference §21.114(1)(A), the proper reference to the identification of the policy form number disclosure.
Amendment to §21.114(7)(C). It is necessary to amend §21.114(7)(C) to include subclause (i) and (ii) because both clauses were in the existing text prior to the adoption of amendments to §21.114 in Commissioner's Order No. 07-1050 but were inadvertently omitted from the adoption order. Section 21.114(7)(C) specifies that an advertisement by an insurer may not state or imply an offer of a policy is an introductory, initial, special, or limited offer and that applicants will receive advantages by accepting the offer or that such advantages will not be available at a later date unless it is a fact. Additionally, the provision specifies that an advertisement may not contain phrases describing an enrollment period as "special" or "limited" if the insurer uses such enrollment periods as the usual method of advertising. In Commissioner's Order No. 07-1050, the only amendment to §21.114(9)(C) (relating to Deception as to introductory, initial, or special offers) that was intended to be adopted was the re-designation of §21.114(9)(C) to §21.114(7)(C). However, in Commissioner's Order No. 07-1050, in addition to §21.114(9)(C) being re-designated as §21.114(7)(C), subclauses (i) and (ii) were inadvertently omitted. It was not the intent of the Commissioner to delete these subclauses. There were no proposed amendments to delete these subclauses in the notice of the proposed rule published in the September 28, 2007 issue of the Texas Register (32 TexReg 6730). Commissioner's Order No. 07-1050 also does not contain any explanation or mention of the Commissioner's intent to make such deletions. This proposal amends existing §21.114(7)(C) to restore the omitted subclauses into §21.114(7)(C) consistent with the intent of the Commissioner.
FISCAL NOTE. Audrey Selden, Senior Associate Commissioner for the Consumer Protection Division, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no fiscal impact to state government as a result of the enforcement or administration of the proposal. There will be no measurable effect on local employment or the local economy as a result of the proposal.
PUBLIC BENEFIT/COST NOTE. Ms. Selden also has determined that for each year of the first five years that the proposed amendments are in effect, the public benefit anticipated as a result of the proposed amendments will be a correct internal reference in §21.103(c)(5) that will result in easier use and readability of the rule and the restoration of inadvertently omitted text in §21.114(7)(C)(i) and (ii) that will result in a rule consistent with the intent of the proposal that is adopted in Commissioner's Order No. 07-1050. Because the sole purpose of the proposal is to correct clerical errors, there will be no economic cost to any individuals, insurers, or other Department regulated entities, regardless of size, as a result of the proposed amendments.
ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL AND MICRO BUSINESSES. In accordance with the Government Code §2006.002(c), the Department has determined that the proposed amendments will not have an adverse economic effect on small businesses or micro businesses. This is because the sole purpose of the proposal is to correct clerical errors. The proposal simply corrects an inadvertent incorrect internal reference and corrects an inadvertent omission of text and does not impose any new requirements or costs with which small or micro businesses must comply. Therefore, in accordance with the Government Code §2006.002(c), the Department is not required to prepare a regulatory flexibility analysis.
TAKINGS IMPACT ASSESSMENT. The Department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking or require a takings impact assessment under the Government Code §2007.043.
REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on September 15, 2008 to Gene C. Jarmon, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be simultaneously submitted to Jack Evins, Director of the Advertising Unit, Consumer Protection Division, Mail Code 111-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. Any request for a public hearing must be submitted separately to the Office of Chief Clerk before the close of the public comment period. If a hearing is held, written and oral comments presented at the hearing will be considered.
STATUTORY AUTHORITY. The amendments are proposed pursuant to §36.001 of the Insurance Code which authorizes the Commissioner of Insurance to 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.
CROSS REFERENCE TO STATUTE. The following statutes are affected by this proposal: Insurance Code §36.001.
§21.103.Required Form and Content of Advertisements.
(a) - (b) (No change.)
(c) All information required to be disclosed by these sections will be set out conspicuously and in close conjunction with the statements to which the information relates or with appropriate captions of such prominence that required information is not minimized, rendered obscure, or presented in an ambiguous fashion, or intermingled with the context of the advertisement so as to be confusing or misleading. Regarding Internet advertising, the disclosures required by the sections referenced in paragraphs (1) - (5) of this subsection may be provided through a conspicuous and clearly labeled link, provided that the link must be placed near the relevant information to which it relates, and must connect directly to the information necessary to comply with the applicable requirements:
(1) - (4) (No change.)
(5) §21.114(1)(A) [§21.114(3)(A)
] of this subchapter (relating to Rules Pertaining Specifically
to Life Insurance and Annuity Advertising).
(d) (No change.)
§21.114.Rules Pertaining Specifically to Life Insurance and Annuity Advertising.
As can be made applicable and as necessary the same or similar test or standard as is stated hereafter within paragraph (1)(B) of this section is to be used as the standard in the interpretation of the provisions of this section.
(1) - (6) (No change.)
(7) Deception as to introductory, initial, or special offers.
(A) - (B) (No change.)
(C) An advertisement by an insurer may not state or imply, that a policy or combination of policies is an introductory, initial, special, or limited offer and that applicants will receive advantages by accepting the offer or that such advantages will not be available at a later date unless such is the fact. An advertisement may not contain phrases describing an enrollment period as "special," "limited," or similar words or phrases if the insurer uses such enrollment periods as the usual method of advertising insurance.
(i) An enrollment period during which "a particular insurance product" may be purchased on an individual basis may not be offered within this state unless there has been a lapse of not less than three months between the close of the immediately preceding enrollment period for the same or substantially the same product and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application which may not be less than 10 days and not more than 40 days from the date that such enrollment period is advertised for the first time. This section applies to all advertising media: i.e., mail, newspaper, radio, television, magazine, and periodicals. It is inapplicable to solicitation of employees or members of a particular group or association which otherwise would be eligible under specific provisions of the Insurance Code for group, blanket, or franchise insurance. This section applies to all affiliated companies under common management or control. The phrase "a particular insurance product" as used herein is an insurance policy that provides substantially different benefits than those contained in any other policy. Different terms of renewability, an increase or decrease in the dollar amounts of benefits, or an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy are not sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods.
(ii) There may not be a statement or implication to the effect that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the particular policy advertised because of special advantages available in the policy.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 28, 2008.
TRD-200803937
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: September 14, 2008
For further information, please call: (512) 463-6327
CHAPTER 276. GENERAL ADMINISTRATION
The Office of Injured Employee Counsel (OIEC) proposes amendments to §276.2 concerning OIEC's mission and §276.10 to OIEC's Ombudsman Program and Continuing Education. The proposed amendments to §276.2 are necessary to provide clarity to OIEC's statutory mission. The proposed amendments to §276.10 are necessary to implement Texas Labor Code §404.151 and §404.152 which is necessary to more closely align the Ombudsman Program to the agency's enabling statute, Chapter 404 of the Texas Labor Code.
Proposed amendments to §276.2 are needed to establish and clarify OIEC's statutory mission to assist, educate, and advocate for injured employees in the workers' compensation system. This section is necessary to clarify OIEC's statutory obligation to the injured employees of Texas and to other workers' compensation system participants.
Proposed amendments to §276.10 are needed to encompass the additional resources that OIEC was given as a result of the 80th Texas Legislature, Regular Session, 2007.
Mr. Brian White, Deputy Public Counsel, has determined that for each year of the first five years the amended sections shall be in effect, there shall be no fiscal impact to state and local governments as a result of the enforcement or administration of the rules. There shall be no measurable effect on local employment or the local economy as a result of these proposed amendments.
Mr. White has determined that for each year of the first five years amended §276.2 are in effect, the public benefits anticipated as a result of the proposed sections shall be clear understanding of OIEC's statutory mission to more accurately align itself with the agency's enabling statute (Chapter 404 of the Texas Labor Code) and to more clearly delineate the agency's mission to assist, educate, advocate on behalf of injured employees of Texas. Although OIEC continues to build relationships with and seeks feedback from other workers' compensation stakeholders, the agency's mission was redefined to emphasize representation of interests of injured employees over the goal of creating a balanced system, which is more properly a goal of the regulatory agency. OIEC believes that an agency that clearly serves as a voice for injured employees in the workers' compensation system results in a more balanced system that serves Texans and is subject to Texas Department of Insurance (TDI) regulation.
Mr. White has also determined that for each year of the first five years amended §276.10 are in effect the public benefits anticipated as a result of the proposed sections shall be a more comprehensive Ombudsman education and training program. Injured employees shall benefit from an Ombudsman Program where Ombudsmen provide assistance to injured employees in both informal and formal workers' compensation proceedings. Both injured employees and Ombudsmen will benefit from the existence of Regional Staff Attorneys who will provide legal research and advice to Ombudsmen assisting injured employees as required by §404.103(b) of the Texas Labor Code.
It is anticipated that all system participants will benefit from a workers' compensation system where unrepresented injured employees receive a higher level of assistance in benefit review conferences and contested case hearings. An increased level of Ombudsmen education and training is likely to result in a workers' compensation system that provides increased access to assistance, narrows the information disparity in proceedings where an injured employee's right to benefits is at stake, and provides additional information and education on the injured employee's rights and responsibilities in the workers' compensation system. Further, an increased Ombudsmen education and training program is anticipated to provide Ombudsmen with a skill set and resources to provide a more efficient level of assistance for Texas' injured employees.
The proposed sections provide consistency with Chapter 404 of the Texas Labor Code and clarify that OIEC is the State agency that offers Ombudsman assistance to unrepresented injured employees in the Texas Workers' Compensation System. The probable economic cost to persons required to comply with the sections shall be OIEC's costs of obtaining and renewing an Ombudsman's adjuster's license. OIEC's cost to obtain an adjuster's license from the Texas Department of Insurance for an Ombudsman is $50 with an additional $50 biennial cost to maintain the adjuster's license. However, the requirement for Ombudsman to obtain an adjuster's license is not a new requirement and poses no new costs. There are no additional costs as a result of the proposed repeal, new, or amended sections.
Further, any additional economic costs either exist under current rules or result from the enactment of HB 7 and are not a result of the adoption, enforcement, or administration of the proposed sections. Based upon the cost of labor per hour, there is no disproportionate economic impact on small or micro businesses. Even if the proposed sections would have an adverse effect on small or micro businesses, it is neither legal nor feasible to waive the provisions of the proposed sections for small or micro businesses because the Texas Labor Code requires equal application of these provisions to all affected individuals. However, it has been determined that approximately 163 small business carriers will not have an adverse economic impact. The number of small business carriers comes from the Texas Workforce Commission data for the second quarter 2007.
To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on September 13, 2008 to Brian White, Deputy Public Counsel, Office of Injured Employee Counsel, Mail Code 50, 7551 Metro Center Drive, Austin, Texas 78744. A request for a public hearing should be submitted separately to the Deputy Public Counsel.
SUBCHAPTER A. GENERAL PROVISIONS
The amended sections are proposed pursuant to Texas Labor Code §§404.151, 404.152, 404.154, 404.006, 404.103 and 404.105. Section 404.151 requires OIEC to maintain Ombudsman program. Section 404.152 explains the designation of Ombudsman; eligibility, training, and continuing education. Section 404.154 provides that OIEC shall widely disseminate information about the Ombudsman program. Section 404.006 provides that the public counsel shall adopt rules as necessary to implement Chapter 404 of the Texas Labor Code. Section 404.103 provides for the operation of the Ombudsman Program. Section 404.105 provides the authority to assist individual injured employees in administrative procedures. The following sections are affected by this proposal: Texas Labor Code §§404.151; 404.152; 404.154; 404.103; 404.105; and 404.006.
§276.2.The Mission of the Office of Injured Employee Counsel.
(a) The Office of Injured Employee Counsel (OIEC) is a State [
state] agency with a mission to
assist, educate, and advocate on behalf of injured employees of Texas.
[:
[(1) educate and assist
injured employees and advocate for them as a class in order to protect
the rights of all injured employees in Texas; and]
[(2) to provide quality
services and assistance to guide injured employees through the workers'
compensation system.]
(b) OIEC offers injured employees educational materials,
assistance in the workers' compensation administrative dispute resolution
process, customer service, and provides referrals to appropriate local,
State [state], and federal agencies. On behalf of
the injured employees of Texas, OIEC shall:
(1) provide assistance to injured employees in the workers' compensation system;
(2) act as an advocate on behalf of injured employees as a class in the Texas Department of Insurance and the Division of Workers' Compensation rulemaking processes;
(3) assist injured employees with contacting appropriate licensing boards to file complaints;
(4) assist injured employees with referrals to local, state, and federal financial assistance, rehabilitation, work placement programs, and other appropriate social services;
(5) monitor the performance and operation of the workers' compensation system with a focus on the system's effect on the return to work of injured employees;
(6) assist injured employees, through the Ombudsman program, with:
(A) the workers' compensation administrative dispute resolution system; and
(B) the resolution of complaints pending at the Texas Department of Insurance.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 29, 2008.
TRD-200803946
Brian M. White
Deputy Public Counsel
Office of Injured Employee Counsel
Earliest possible date of adoption: September 14, 2008
For further information, please call: (512) 804-4182
The amended sections are proposed pursuant to Texas Labor Code §§404.151, 404.152, 404.154, 404.006, 404.103 and 404.105. Section 404.151 requires OIEC to maintain Ombudsman program. Section 404.152 explains the designation of Ombudsman; eligibility, training, and continuing education. Section 404.154 provides that OIEC shall widely disseminate information about the Ombudsman program. Section 404.006 provides that the public counsel shall adopt rules as necessary to implement Chapter 404 of the Texas Labor Code. Section 404.103 provides for the operation of the Ombudsman Program. Section 404.105 provides the authority to assist individual injured employees in administrative procedures. The following sections are affected by this proposal: Texas Labor Code §§404.151; 404.152; 404.154; 404.103; 404.105; and 404.006.
§276.10.Ombudsmen Training [ Program ] and Continuing Education.
(a) Definitions. The following words and phrases shall have the following meaning in this section unless the context clearly indicates otherwise:
(1) Adjuster's license: A workers' compensation license issued by the Texas Department of Insurance.
(2) Continuing education: A formal training program required for all ombudsmen in this state that includes continuing education for obtaining and retaining an adjuster's license.
(3) Ombudsmen education and training program: The training required by the Office of Injured Employee Counsel (OIEC) to serve as an ombudsman, which results in certification upon completion.
(b) Purpose. OIEC shall establish and maintain the ombudsmen education and training program to ensure consistent, quality, and thorough training of ombudsmen staff. The ombudsmen education and training program applies to every ombudsman, regardless of hire date. The ombudsmen education and training program shall include, but is not limited to:
(1) formal classroom training conducted by OIEC staff;
(2) on-the-job training monitored by a supervising ombudsman, senior ombudsman, and regional staff attorneys;
(3) observations of ombudsmen by supervising ombudsman, senior ombudsman, and regional staff attorneys;
(4) professional skill development and legal education
on workers' compensation laws, rules, advisories, and appeals panel
decisions by the regional attorneys; [and]
(5) resource meetings with OIEC's central staff to
discuss current and pending issues instrumental to providing assistance
to injured employees in informal and formal proceedings
; and[.]
(6) practical skills training and legal assistance provided by the regional staff attorneys.
(c) OIEC staff's responsibilities regarding education and training. OIEC staff shall maintain the knowledge and skills needed to properly assist unrepresented injured employees in the workers' compensation system.
(1) Ombudsman Services [Injured EmployeeServices
] is the division within OIEC that is responsible for
the overall management of the ombudsmen education and training program.
Ombudsman [Injured Employee] Services' responsibilities
include, but are not limited to:
(A) educating ombudsmen about the workers' compensation laws, rules, advisories, appeals panel decisions, dispute resolution, OIEC policies and procedures, and application of such information to specific cases or factual situations;
(B) selecting team lead supervisors, training ombudsmen, and senior ombudsmen to observe, supervise, train, and provide feedback to ombudsmen on a daily basis;
(C) notifying regional staff attorneys if guidance, instruction, or legal research on technical areas is needed;
(D) establishing on-going training schedules for ombudsmen and evaluating the performance of ombudsmen's progress through the education and training program;
(E) maintaining documentation to monitor the effectiveness of the ombudsman program and coordinating with OIEC's Legal Services division to develop education and training materials to address systematic issues to enhance ombudsmen's effectiveness;
(F) examining the proficiency and competency of each ombudsman by conducting technical observations and identifying areas for professional improvement;
(G) providing targeted training to individual ombudsman for professional development and incorporating the technical observations and evaluations into the performance evaluation process;
(H) providing continuing education and training, at least annually, to ombudsmen on workers' compensation laws, rules, advisories, appeals panel decisions, dispute resolution, OIEC policies and procedures; and
(I) assigning a staff attorney to each ombudsman who will advise the ombudsman on providing assistance to injured employees and preparing for informal and formal proceedings.
(2) An ombudsman's responsibilities shall include, but is not limited to:
(A) obtaining and maintaining a valid workers' compensation adjusters' license issued by the Texas Department of Insurance and submitting a copy of the license to OIEC's central office;
(B) completing the ombudsmen education and training program;
(C) participating in OIEC conferences;
(D) completing all continuing education requirements;
(E) maintaining the technical and professional skills to perform all the duties of an ombudsman; and
(F) assisting and serving as an advocate for injured employees throughout the workers' compensation system.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on July 29, 2008.
TRD-200803947
Brian M. White
Deputy Public Counsel
Office of Injured Employee Counsel
Earliest possible date of adoption: September 14, 2008
For further information, please call: (512) 804-4182