ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 7. Corporate and Financial Subchapter A. Examination and Corporate Custodian and Tax 28 TAC sec.7.86 The Commissioner of Insurance adopts new sec.7.86, concerning the demonstration of ownership of certificated and uncertificated securities, with changes to the proposed text published in the November 24, 1995, issue of the Texas Register (20 TexReg 9809). A public hearing on the proposed section was requested, but was withdrawn as a result of the changes made to the adopted section. A similar section was previously proposed in the October 7, 1994, issue of the Texas Register (19 TexReg 7993). It was subsequently withdrawn. The section concerns the demonstration of ownership of certificated and uncertificated securities. The section is necessary to implement sec.7.17 of House Bill 1461, enacted by the 73rd Legislature, 1993, which added a new sec.6 to Article 21.39-B of the Insurance Code. The commissioner is directed by Texas Insurance Code, Article 21.39-B, sec.6 to adopt rules authorizing a domestic insurance company to demonstrate ownership of an uncertificated security consistent with common practices of securities exchanges and markets. Additionally, sec.6 provides that these rules will establish the manner in which ownership of the security may be demonstrated and adequate financial safeguards relating to the ownership of securities. The section establishes the standards for demonstrating ownership of an insurance company's securities and adequate financial safeguards relating to those securities held by a custodian consistent with common practices of securities exchanges and markets. Section 7.86(a) describes the purpose of the new section. Section 7.86(b) provides definitions of terms used in the new section. Section 7.86(c) describes how a domestic insurance company can evidence ownership of securities. Section 7.86(d) establishes requirements for written custodial agreements. Section 7.86(e) provides that insurers have 180 days from the effective date of the section to comply with section 7.86(d). COMMENTS ON sec.7.86(b) Definitions. COMMENT: One commenter recommended that "clearing corporations" be deleted from the definition of "custodian" in sec.7.86(b)(2) because it implied that a clearing corporation should be a signatory to a custodial agreement, which is contrary to present practice. RESPONSE: The department acknowledges that the general practice is to hold securities in a clearing corporation through a custodian; however, an insurer may be a member of a clearing corporation and therefore hold its securities directly with the clearing corporation. The definition should not be read to imply that a clearing corporation should be a signatory to a custodian agreement between an insurer and a custodian that is not a clearing corporation. COMMENT: One commenter recommended that the term "moneys" be deleted from the definition of custodied securities in sec.7.86(b)(3) because the meaning of money is different than security. Custodian agreements do not contemplate the safekeeping of money. RESPONSE: The agency agrees with the comment and has deleted moneys from the definition of "custodied securities" in sec.7.86(b)(3), deleted sec.7.86(b) (5) which defined moneys, and deleted moneys in sec.7.86(d). These changes are intended to demonstrate that money is not subject to this section. The deletion of sec.7.86(b)(5) required that proposed paragraphs (6)-(11) of subsection (b) be renumbered. COMMENT: Three commenters recommended that the definition of "qualified broker/dealer" be amended to allow more broker/dealers to qualify as custodians of insurer securities. RESPONSE: The department agrees with the comment and amended the definition by lowering the minimum net worth to $100 million from $500 million, deleting the requirement that net capital be at least 120% of the minimum capital required of such securities firm by the Securities and Exchange Commission, and deleting the requirement that the ratio of aggregate indebtedness to net capital be no greater than 12:1. COMMENTS ON sec.7.86(c). Evidence of securities ownership. COMMENT: One commenter suggested that sec.7.86(c) be amended to authorize the commissioner to permit ownership of uncertificated securities to be demonstrated in a manner other than that described in the section. RESPONSE: The department does not believe the suggestion is consistent with the Legislature's intent in directing the commissioner to adopt rules consistent with common practices of the securities markets. In the event new practices develop, the section can be amended to recognize such practices. COMMENTS ON sec.7.86(d). Required Provisions For Custodial Agreements. COMMENT: One commenter stated that proposed sec.7.86(d)(1) created a conflict with a broker/dealer's role in buying and selling securities and the paragraph's statement that a custodian/broker/dealer is in a fiduciary relationship with the insurer and recommended it be deleted. RESPONSE: The agency acknowledges that the paragraph creates an unintended conflict and deleted subsection (d)(1). The department believes subsection (d) (2) adequately states the intent of the department without creating the possible conflict raised by the commenter. The deletion of proposed subsection (d)(1) required that proposed paragraphs (2)-(13) of subsection (d) be renumbered. COMMENT: One commenter recommended that proposed sec.7.86(d)(2) (adopted sec.7.86(d)(1)) be amended to include agents of a custodian or subcustodian because agents are sometimes utilized in the handling of an insurer's securities. RESPONSE: The department recognizes that the securities industry is complex and that agents may be used in the handling or processing of an insurer's securities; however, the department disagrees that this section, which establishes the minimum standards for a custodial agreement, should cover all those complexities. The use of agents is not prohibited by the section so long as that use is consistent with the common practices of the securities exchanges and markets. COMMENT: Three commenters objected to the proposed requirement in sec.7.86(d) (3) (adopted sec.7.86(d)(2)) that a custodian be liable for any loss of securities. They said this exceeds the industry standard and would increase the costs of safekeeping securities for insurers. RESPONSE: The department acknowledges that the higher standard would increase the cost of safekeeping for insurers and has amended the paragraph to provide for a standard that is commonly used by the industry and recommended by a commenter. . COMMENT: Another commenter suggested that proposed sec.7.86(d)(3) (adopted sec.7.86(d)(2)) be amended to provide that a custodian shall not be responsible for the loss or destruction of securities that are placed in the custody of a foreign bank or broker, or other intermediary. The commenter stated that, because the investor decides to purchase foreign securities, the investor and not the custodian should bear any risk. RESPONSE: The department acknowledges that a custodian should not be responsible for securities held by a foreign custodian when the insurer/investor is responsible for the foreign custodian holding the securities; however, the department is not aware of any circumstances where this is the case for an insurer. Therefore, no amendment is made. The matter will be given further consideration and staff will propose an amendment to the section if there is a need for such an exclusion and adequate financial safeguards can be determined. COMMENT: One commenter recommended that proposed sec.7.86(d)(12) (adopted sec.7.86(d)(11)) be amended to require the department or the custodian to notify the insurer of any request for information concerning an insurer's custodied securities when the request was made, and that the insurer be notified of the custodian's response. The commenter stated that the proposed language which would require the department to provide the insurer with a copy of the information request and a copy of the custodian's response risked unnecessary delays and perhaps failures in communication. RESPONSE: The department disagrees with the comment. The department believes it is a normal business practice for a custodian to notify its customer when it receives a request for information from a third party about the customers securities held in safekeeping. Because the custodian agreement is a contract between the insurer and the custodian, the insurer may require the custodial agreement to require notification. Further consideration of the requirement by the department resulted in the conclusion that the provision was not a proper subject of the section and the provision was deleted from the paragraph. COMMENT: Another commenter suggested that a sentence be added to proposed sec.7.86(d)(12) (adopted sec.7.86(d)(11)) to state that the department would not take disciplinary action against an insurer because a custodian did not properly or adequately respond to a request for information. RESPONSE: The agency disagrees with the comment. Whether the department takes disciplinary action against an insurer is not a proper subject of this section. Also, relieving an insurer of any responsibility for the actions of its custodian would eliminate the need for an insurer to exercise prudence in the selection and supervision of a custodian. Comments generally in favor of the section, but with recommendations for change, were received from the Texas Legal Reserve Officials Association, the Texas Insurance Officials Association, Merrill Lynch, American General Corporation, Directors Investment Group, Inc., Funeral Directors Life Insurance Company, and Texas Directors Life Insurance Company of Abilene, Texas. There were no comments against the section. The new section is adopted under the authority of the Insurance Code, Articles 21.39-B and 1.03A. Article 21.39-B, sec.6 directs the commissioner to adopt rules authorizing a domestic insurance company to demonstrate ownership of an uncertificated security consistent with common practices of securities exchange markets. Article 21.39-B, sec.2 authorizes the commissioner to promulgate such regulations as may be deemed necessary to carry out the provisions of Article 21.39-B. Article 1.03A authorizes the commissioner to determine rules for general and uniform application for the conduct and execution of the duties and functions of the department only as authorized by statute for general and uniform application. sec.7.86. Custodied Securities. (a) Purpose. The purpose of this section is to enable insurers to demonstrate ownership of securities consistent with the common practices of securities exchanges and markets while protecting the interests of policyholders and shareholders. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Clearing corporation-A corporation or system that provides for the book entry settlement and custody of securities and is further defined in Insurance Code, Article 21.39-B, sec.4(b) and Texas Business and Commerce Code, sec.8.102(a)(5). (2) Custodian-A qualified bank, qualified broker/dealer or a clearing corporation that accepts deposits of securities from an insurer and safeguards, holds and reports on such securities pursuant to a written custodial or trust agreement with an insurer. (3) Custodied Securities-An insurer's securities deposited with a custodian or redeposited with a subcustodian. (4) Insurer-A domestic insurance company. (5) Qualified bank-A bank, federal home loan bank or trust company with trust powers, organized under the laws of the United States or any state thereof, which either is a member of the Federal Reserve System, a member of, or is eligible to receive deposits which are insured by the Federal Deposit Insurance Corporation, or maintains an account with a Federal Reserve Bank and is subject to supervision and examination by the Board of Governors of the Federal Reserve System, or is subject to supervision and examination by the Federal Housing Finance Board, and is no less than "adequately capitalized" as defined by standards promulgated by the appropriate federal bank regulatory agency. (6) Qualified Broker/Dealer-A securities firm which has, as shown by its most recent audited financial statement, a tangible net worth of at least $100 million, is registered with and subject to the jurisdiction of the Securities and Exchange Commission, and is a member of the Securities Investor Protection Corporation. (7) Securities-Shares, participations, or other interests in property or an enterprise as defined in the Texas Business and Commerce Code, sec.8. 102(a). The term includes certificated and uncertificated securities. (8) Securities issuer-The enterprise, organization or other entity which issues securities. (9) Subcustodian-A qualified bank, qualified broker dealer or a clearing corporation that accepts deposits of securities from a custodian for safeguarding and holding. (10) Transfer agent-A person or firm which engages on behalf of a securities issuer in transferring record ownership of securities. (c) Evidence of Securities Ownership. An insurer may demonstrate ownership of its securities by having them held by a custodian pursuant to subsection (d) of this section. In addition, an insurer may demonstrate ownership of its securities by having them registered in the insurer's name on the books of the securities issuer and/or the securities issuer's transfer agent. (d) Required Provisions For Custodial Agreements. Any arrangement involving an insurer's deposit of its securities with a custodian must be evidenced by an agreement signed by the insurer and the custodian. The agreement signed by the insurer and the custodian must provide for the conditions described in paragraphs (1)-(12) of this subsection: (1) The custodian shall exercise the same due care that is expected of a fiduciary with the responsibility for the safeguarding of the insurer's custodied securities and for compliance with all provisions of the custodial agreement, whether the insurer's custodied securities are in the custodian's possession or have been redeposited by the custodian with a subcustodian. (2) The custodian shall indemnify the insurer for any loss of custodied securities occasioned by the negligence or dishonesty of custodian's officers and employees, or burglary, robbery, hold-up, theft or mysterious disappearance, including loss by damage or destruction. In the event of such loss, the custodian must promptly replace the custodied securities or the value thereof, and the value of any loss of rights or privileges resulting from said loss of custodied securities. (3) Custodied securities shall be segregated at all times from the proprietary assets of the custodian and subcustodian. (4) The custodian's official records shall separately identify custodied securities owned by the insurer, whether held by the custodian or subcustodian. If held by a subcustodian, the custodian's records shall also identify the subcustodian. (5) Custodied securities that are in registered form shall be registered only in the name of the insurer, the custodian or its nominee, or the subcustodian or its nominee. (6) All activities involving the insurer's custodied securities shall be subject to the insurer's instructions and the custodied securities shall be withdrawable upon demand of the insurer. Securities deposited with insurance regulators to satisfy statutory requirements shall not be withdrawn without approval of the appropriate insurance regulatory authority. (7) The custodian shall furnish, upon request by the insurer, a confirmation of all transfers of custodied securities to or from the account of the insurer, and reports of custodied securities sufficient to verify information reported in the insurer's annual statement filed with the Texas Department of Insurance and supporting schedules and information required in any audit of the insurer's financial statement whether the custodied securities are held by the custodian or by a subcustodian. (8) The insurer or its designee shall at all times be entitled to examine all records maintained by the custodian or subcustodian relating to the insurer's custodied securities. (9) Upon request of the insurer, the custodian shall be required to send to the insurer all reports it receives from a clearing corporation or the Federal Reserve book-entry system on their respective systems of internal accounting control, and all reports prepared on the custodian's and subcustodian's systems of internal accounting control of custodied securities. (10) The custodian shall not use any of the insurer's custodied securities for the custodian's benefit and none of the insurer's custodied securities shall be loaned, pledged, or hypothecated by the custodian or subcustodian without a written contract executed by the insurer separate and apart from the custodial agreement. (11) The custodian is authorized and instructed by the insurer to honor any requests made by the Texas Department of Insurance for information concerning the insurer's custodied securities. The department, from time to time, may request, and the custodian shall furnish, a detailed listing of the insurer's custodied securities (whether in the possession of the custodian or with a subcustodian) and an affidavit by the custodian certifying the custodian's safekeeping responsibilities relative to the custodied securities. The custodian's response to such requests shall be made directly to the department and shall encompass all of the insurer's custodied securities (whether in the possession of the custodian or with a subcustodian). (12) The custodian and subcustodian shall maintain "securities all risks coverage" at levels considered reasonable and customary for the custodian banking industry covering the custodian's duties and activities as custodian for the insurer's assets and shall describe the nature and extent of such insurance protection. Any change in such insurance protection during the term of the custodial agreement shall be promptly disclosed to the insurer. (e) Effective Date. All insurers subject to this section shall comply with subsection (d) of this section no later than 180 days after the effective date of this section. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 21, 1996. TRD-9607074 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: June 12, 1996 Proposal publication date: November 24, 1995 For further information, please call: (512) 463-6327 Chapter 29. Guaranty Acts The Commissioner of Insurance adopts the repeal of sec. sec.29.1-29.7, 29. 201-29.207, and 29.601-29.607, concerning the Guaranty Associations' Plans of Operation, without changes to the proposed text as published in the January 19, 1996, issue of the Texas Register (21 TexReg 495). These sections must be repealed so that the Commissioner can adopt a new sec. 29.1 regarding public interest information and the publication in the Texas Register of meeting notices and agendas for each of the three Guaranty Associations (Texas Title Insurance Guaranty Association; Texas Property and Casualty Insurance Guaranty Association; and the Life, Accident, Health, and Hospital Service Insurance Guaranty Association). These repeals and the adoption of a new sec.29.1 will give the public improved access to the Guaranty Associations' Plans of Operation and information on claim filing, investments, and assessments, and also notice of the Guaranty Associations' meetings and agendas. In addition, the sections must be repealed because they have been superseded by more current Plans of Operation. The adoption of new sec.29.1 appears elsewhere in the Texas Register. The repeal of these sections will eliminate unnecessary and outdated provisions pertaining to the Plans of Operation for the three Guaranty Associations. No comments were received regarding the adoption of the repeals. Subchapter A. Texas Property and Casualty Insurance Guaranty Association Plan of Operation 28 TAC sec.sec.29.1-29.7 The repeals are adopted pursuant to the Insurance Code, Articles 1.03A; 9. 48, sec. 18; 21.28, sec. 2(a); 21.28-C, sec. 23; and 21.28-D, sec. 21. Article 1. 03A authorizes the Commissioner of Insurance to promulgate and adopt rules and regulations for the conduct and execution of duties and functions by the Department. Article 9.48, sec. 18, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 9.48 (Texas Title Insurance Guaranty Act). Article 21.28, sec. 2(a), authorizes the Commissioner of Insurance to have oversight authority of the Guaranty Associations. Article 21.28-C, sec. 23, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-C (Texas Property and Casualty Insurance Guaranty Act). Article 21.28-D, sec. 21, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-D (Life, Accident, Health, and Hospital Service Insurance Guaranty Act). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 21, 1996. TRD-9607076 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: June 12, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Subchapter B. Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association Plan of Operation 28 TAC sec.sec.29.201-29.207 The repeals are adopted pursuant to the Insurance Code, Articles 1.03A; 9. 48, sec.18; 21.28, sec.2(a); 21.28-C, sec.23; and 21.28-D, sec.21. Article 1.03A authorizes the Commissioner of Insurance to promulgate and adopt rules and regulations for the conduct and execution of duties and functions by the Department. Article 9.48, sec.18, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 9.48 (Texas Title Insurance Guaranty Act). Article 21. 28, sec.2(a), authorizes the Commissioner of Insurance to have oversight authority of the Guaranty Associations. Article 21.28-C, sec.23, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-C (Texas Property and Casualty Insurance Guaranty Act). Article 21.28-D, sec.21, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-D (Life, Accident, Health, and Hospital Service Insurance Guaranty Act). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 21, 1996. TRD-9607080 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: June 12, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Subchapter D. Texas Title Insurance Guaranty Association 28 TAC sec.sec.29.601-29.607 The repeals are adopted pursuant to the Insurance Code, Articles 1.03A; 9. 48, sec.18; 21.28, sec.2(a); 21.28-C, sec.23; and 21.28-D, sec.21. Article 1.03A authorizes the Commissioner of Insurance to promulgate and adopt rules and regulations for the conduct and execution of duties and functions by the Department. Article 9.48, sec.18, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 9.48 (Texas Title Insurance Guaranty Act). Article 21. 28, sec.2(a), authorizes the Commissioner of Insurance to have oversight authority of the Guaranty Associations. Article 21.28-C, sec.23, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-C (Texas Property and Casualty Insurance Guaranty Act). Article 21.28-D, sec.21, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-D (Life, Accident, Health, and Hospital Service Insurance Guaranty Act). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 21, 1996. TRD-9607079 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: June 12, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Subchapter A. Guaranty Associations' Public Interest Information 28 TAC sec.29.1 The Commissioner of Insurance adopts new sec.29.1, regarding Guaranty Associations' public interest information, with changes to the proposed text as published in the January 19, 1996, issue of the Texas Register (21 TexReg 496). The new section is necessary to require each of the three Guaranty Associations (Texas Title Insurance Guaranty Association; Texas Property and Casualty Insurance Guaranty Association; and the Life, Accident, Health, and Hospital Service Insurance Guaranty Association) to make available for inspection its Plan of Operation and information on claim filing, investments, and assessments. This information will be available to interested persons at the Guaranty Associations' regular place of business during normal business hours. The proposed rule also requires publication of notice in the Texas Register of any Guaranty Association meetings and agendas. The new rule helps ensure the public's access to the Guaranty Associations' public information and to the Guaranty Associations' open meetings. New sec. 29.1 is adopted simultaneous with the repeal of existing sec.sec. 29. 1-29.7, 29.201-29.207, and 29.601-29.607, concerning the previous Plans of Operation. Notice of those repeals appears elsewhere in the Texas Register . New sec. 29.1 is adopted as part of Title 28, Part 1, Chapter 29, Subchapter A, relating to Guaranty Associations' Public Interest Information. Section 29.1 specifies what information each Guaranty Association makes available for inspection by interested persons and provides requirements for notice of open meetings. Subsection (a) defines terms used in the new section. Subsection (b) requires each Guaranty Association to keep and make available for inspection its public interest information at the Guaranty Association's regular office(s) and hours. Subsection (c) provides for notice of Guaranty Association meetings and agendas pursuant to the Open Meetings Act. Subsection (d) provides that the rule does not preclude access to information and records of the Guaranty Associations which may be available pursuant to the Public Information Act. Three sets of comments were received regarding the new section. The commenters expressed general support for the rules as proposed but offered comments or concerns on specific sections. The agency appreciates the comments it has received. As a result of these comments, the agency has made changes as indicated. Two commenters objected to the definition of "public interest information" in sec.29.1(a)(5) because the definition was overbroad and needed clarification. The Department agrees and has revised the definition by removing the phrases "manuals, handbooks, guidelines" and "created and/or", and has added a phrase regarding procedures for appealing denial of claims. One commenter objected to the definition of "public interest information" because it was not clear whether the Guaranty Associations would be required to create new documents to comply with the rule. The Department disagrees. Each Guaranty Association currently has an adopted Plan of Operation and also has procedures and policies regarding claim filing, investments, and assessments. Beyond this, no new documents or procedures or policies are required by the rule to be created unless those currently in place are replaced or amended. One commenter objected to proposed definition of "public interest information" because of the use of the term "claims handling." Although this term appears in Article 21.28, sec. 8(a)(2), describing the priority of creditors of an insolvent insurer, it does have a particular meaning to the business the Associations conduct. However, "claims filing" procedures are those under which a person covered by the Associations may apply for payment of a claim held against an impaired member insurer. The Department agrees with the comment and has replaced the word "handling" with "filing." For with changes: The Texas Property and Casualty Insurance Guaranty Association, the Life, Accident, Health, and Hospital Service Insurance Guaranty Association, and the Insurance Alliance of America. The new rule is adopted pursuant to the Insurance Code, Articles 1.03A; 9. 48, sec. 18; 21.28, sec. 2(a); 21.28-C, sec. 23; and 21.28-D, sec. 21. Article 1. 03A authorizes the Commissioner of Insurance to promulgate and adopt rules and regulations for the conduct and execution of duties and functions by the Department. Article 9.48, sec. 18, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 9.48 (Texas Title Insurance Guaranty Act). Article 21.28, sec. 2(a), authorizes the Commissioner of Insurance to have oversight authority of the Guaranty Associations. Article 21.28-C, sec. 23, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-C (Texas Property and Casualty Insurance Guaranty Act). Article 21.28-D, sec. 21, authorizes the Commissioner of Insurance to issue rules and regulations to carry out and augment the purposes and provisions of Article 21.28-D (Life, Accident, Health, and Hospital Service Insurance Guaranty Act). sec.29.1. Guaranty Associations' Public Interest Information. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings unless the context clearly indicates otherwise: (1) Commissioner-The Commissioner of Insurance. (2) Department-The Texas Department of Insurance. (3) Guaranty Association(s)-The Texas Title Insurance Guaranty Association; Texas Property and Casualty Insurance Guaranty Association; and the Life, Accident, Health, and Hospital Service Insurance Guaranty Association. (4) Plan of Operation-The guidelines and regulations necessary or suitable to assure the fair, reasonable, and equitable administration of the Guaranty Association, pursuant to Texas Insurance Code Annotated, Articles 9. 48, sec. 14(d); 21.28-C, sec. 9; and 21.28-D, sec. 10. (5) Public interest information-The Plan of Operation and any procedures and/or policies adopted and used by any office(s) of the Guaranty Associations that pertain to claim filing (including the procedure for appealing denial of claims), investments, and assessments. (b) Each Guaranty Association shall keep and make available for inspection by interested persons its public interest information at the Guaranty Association's regular office(s) place and hours. Each Guaranty Association shall also provide to the Commissioner its public interest information, and the Department shall keep and make available for inspection by interested persons the public interest information provided by each Guaranty Association at the Department's regular office place and hours. (c) Each Guaranty Association shall provide notice of meetings and agendas pursuant to the Open Meetings Act, Government Code, Chapter 551. (d) This rule does not preclude public access to any information and records of the Guaranty Associations which may be available to the public pursuant to the Public Information Act, Government Code chapter 552. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 21, 1996. TRD-9607075 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: June 12, 1996 Proposal publication date: January 19, 1996 For further information, please call: (512) 463-6327 Part II. Texas Workers' Compensation Commission Chapter 134. Guidelines for Medical Services, Charges, and Payments Subchapter F. Pharmaceutical Fees 28 TAC sec.134.501 The Texas Workers' Compensation Commission (the commission) adopts the repeal of sec.134.501, concerning the Pharmaceutical Fee Guideline, without changes to the proposed text as published in the March 12, 1996 issue of the Texas Register (21 TexReg 2001). The repeal is adopted because a revised fee guideline for pharmaceuticals has been included in the Texas Workers' Compensation Medical Fee Guideline, 1996, 28 TAC sec.134.201, which was adopted by reference in the March 22, 1996 issue of the Texas Register (21 TexReg 2361). Although some revisions have been made in the wording of the Pharmaceutical Fee Guideline contained in the Medical Fee Guideline 1996, the fees for pharmaceutical services are the same as those contained in sec.134.501. The major change is simply the location of the Pharmaceutical Fee Guideline. The Medical Fee Guideline 1996 is effective for pharmaceutical services provided on or after April 1, 1996 and the provisions of sec.134.501 are effective for pharmaceutical services provided prior to April 1, 1996. Comments on the proposal were solicited in the March 12, 1996 issue of the Texas Register. No comments or requests for a public hearing were received. The repeal is adopted under the Texas Labor Code, sec.402.061, which requires the commission to adopt rules necessary for the implementation and enforcement of the Texas Workers Compensation Act; the Texas Labor Code, sec.408.021, which entitles injured employees to all health care reasonably required by the nature of the injury as and when needed; the Texas Labor Code, sec.413.007, which requires the Commission to maintain a statewide database of medical charges, actual payments, and treatment protocols; the Texas Labor Code, sec.413.011, which mandates that the Commission by rule establish medical policies and guidelines; and the Texas Labor Code, sec.413.012, which requires review and revision of the medical policies and fee guidelines at least every two years. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 20, 1996. TRD-9606998 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 11, 1996 Proposal publication date: March 12, 1996 For further information, please call: (512) 440-3700 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part II. Texas Rehabilitation Commission Chapter 101. General Rules 40 TAC sec.101.11 The Texas Rehabilitation Commission (TRC) adopts the repeal of sec.101.11, concerning Protest and Appeal, without changes to the proposed text as published in the April 12, 1996 issue of the Texas Register (21 TexReg 3155). The justification for the repeal is to replace the Protest and Appeal rules at sec.101.11 with new rules located at sec.106.34 and sec.106.35 of Chapter 106. Contract Administration, Subchapter A. Acquisition of Client Goods and Services. No comments were received regarding the repeal. The repeal is adopted under Texas Human Resources Code Annotated, Title 7, sec.111.018, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. The Texas Human Resources Code, Chapter 111, Title 7, sec.111.052, is affected by this adopted repeal. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 13, 1996. TRD-9607020 Charles W. Schiesser General Counsel, Office of the General Counsel Texas Rehabilitation Commission Effective date: June 11, 1996 Proposal publication date: April 12, 1996 For further information, please call: (512) 483-4051 Chapter 106. Contract Administration Subchapter C. Acquisition of Administrative Goods and Services 40 TAC sec.sec.106.38-106.40 The Texas Rehabilitation Commission (TRC) adopts new sec. sec.106.38-106.40. concerning Chapter 106, Contract Administration, Subchapter C-Acquisition of Administrative Goods and Services, without changes to the proposed text as published in the April 19, 1996 issue of the Texas Register (21 TexReg 3429). These rules are to implement the Commission's contracting authority contained in Title 7, sec. l11.052, Texas Human Resources Code, and to formalize by rule that the Texas Rehabilitation Commission purchases administrative goods and services under delegated authority from the General Services Commission. No comments were received regarding the new rules. The new rules are adopted under Texas Human Resources Code Annotated, Title 7, sec.111.018, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. The Texas Human Resources Code, Chapter 111, Title 7, sec.111.052, is affected by this adopted rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on May 13, 1996. TRD-9607100 Charles W. Schiesser General Counsel, Office of the General Counsel Texas Rehabilitation Commission Effective date: June 12, 1996 Proposal publication date: April 19, 1996 For further information, please call: (512) 483-4051