Enrolled Bill Summary

House Bill 1951	House Author:  Taylor, Larry
Effective:  9-1-11	Senate Sponsor:  Hegar

House Bill 1951 amends the Insurance Code to continue the Texas Department of Insurance (TDI) until September 1, 2023. In addition to enacting across-the-board sunset provisions, the bill expands TDI's duties; requires the commissioner of insurance to adopt rules regarding the purpose, structure, and use of advisory committees by the commissioner, state fire marshal, or TDI staff; and requires the commissioner to periodically evaluate such an advisory committee to ensure its continued necessity. The bill abolishes the following entities: the consumer assistance program for health maintenance organizations (HMOs) advisory committee; the executive committee of the market assistance program for residential property insurance; the TexLink to Health Coverage Program task force; the HMO solvency surveillance committee; the technical advisory committee on claims processing; the technical advisory committee on electronic data exchange; the examination of license applicants advisory board; the advisory council on continuing education for insurance agents; the insurance adjusters examination advisory board; the public insurance adjusters examination advisory committee; the utilization review agents advisory committee; the fire extinguisher advisory council; the fire detection and alarm devices advisory council; the fire protection advisory council; and the fireworks advisory council. The bill transfers all powers, duties, obligations, rights, contracts, funds, records, and real or personal property of the above entities to TDI.

            House Bill 1951 revises provisions relating to assessments charged to HMOs to provide funds for the rehabilitation, liquidation, supervision, conservatorship, or seizure of an impaired HMO.  The bill requires an HMO, an accident and health policy insurer, and a small employer benefit plan insurer, as appropriate, to give to each enrollee, insured, or small employer under an individual evidence of coverage, as appropriate, timely written notice of the effective date of a rate increase and certain information relating to the increase. The bill prohibits an HMO or insurer from requiring an enrollee, insured, or employer entitled to such notice to respond to the HMO or insurer to renew the policy or take action relating to the renewal or extension of the coverage before a certain date.

House Bill 1951 requires the commissioner by rule to prescribe the process through which TDI requests supplementary rating information and supporting information for purposes of the rate filing requirement. The bill provides the deadline by which the commissioner is required to disapprove a rate that is filed for prior approval and that does not comply with applicable requirements, and sets out provisions related to TDI requesting additional information, if necessary.

House Bill 1951 requires TDI to annually make available to the public information concerning TDI's general process and methodology for rate review. The bill requires the commissioner, if the commissioner requires an insurer to file the insurer's rates for prior approval, to periodically assess whether the conditions that led the commissioner to require such a filing continue to exist; to explain to an insurer the conditions under which the insurer is excused from such requirements; and to issue an order excusing the insurer from such a filing if those conditions no longer exist. The bill requires the commissioner to define by rule the financial conditions and rating practices that may subject an insurer to prior approval rating filing requirements and the process by which the commissioner determines that a statewide insurance emergency exists. The bill requires TDI to track and analyze precedents relating to the factors contributing to the disapproval of rates and to the volume and request for additional information.  The bill requires the commissioner, not less frequently than once every five years, to evaluate the information collected for purposes of fixing title insurance premium rates to determine whether TDI needs additional or different information or no longer needs certain information to promulgate rates.

House Bill 1951 authorizes an insurer or other organization regulated by TDI to conduct business electronically if before the conduct of business each party to the business agrees to conduct the business electronically and requires the commissioner to adopt rules relating to such electronic transactions. The bill requires the commissioner to require each insurer who writes personal automobile insurance or residential property insurance in Texas to annually file with the commissioner aggregate claims information for the period covered by the filing; requires TDI to post the data contained in claims information filing on TDI's Internet website; and authorizes the commissioner to adopt rules necessary to implement these requirements.

House Bill 1951 expands the factors that the commissioner is required to consider in determining which areas to designate as underserved for residential property insurance. The bill requires the commissioner, not less than once every six years, to determine which areas to designate as underserved and to conduct a study concerning the accuracy of current designations of underserved areas. The bill requires the commissioner to conduct a study concerning the impact of increasing the percentage of the total amount of premiums collected by insurers who are exempt from rate filing and approval requirements and to report the results of the study in TDI's biennial report to the legislature.

House Bill 1951 specifies that the rules required to be adopted by the commissioner to implement provisions governing health benefit plans for children include rules necessary to increase the availability of coverage to children younger than 19 years of age, to establish an open enrollment period, and to establish qualifying events as exceptions to the open enrollment period. The bill authorizes the commissioner to adopt rules on an emergency basis in order to implement provisions relating to health benefit plans for children.

The bill establishes an adjuster advisory board to make recommendations to the commissioner. The bill exempts from limited property and casualty agent licensing requirements a person who wrote for the previous calendar year job protection insurance policies for an insurer that generated, in the aggregate, less than $40,000 in direct premium.

House Bill 1951 prohibits a managed care plan from requiring a therapeutic optometrist or ophthalmologist to be included in or to accept the terms of payment under or for a particular vision panel in which the therapeutic optometrist or ophthalmologist does not otherwise wish to be included. The bill prohibits an insurer or an insurer's agent from reporting to a claims database information regarding an inquiry by an insured regarding coverage provided under a personal automobile insurance policy or a residential property insurance policy unless and until the insured files a claim under the policy. The bill raises the minimum liability threshold for a surety company to be required to obtain reinsurance for such liability and repeals a provision capping the amount of a surety company's capital and surplus that is authorized to be reinsured for purposes of a governmental entity's conditional acceptance of the company's obligation. The bill revises curriculum requirements for a residential fire alarm technician course.

House Bill 1951 amends the Government Code to require the commissioner to prescribe by rule a reasonable fee for an inspection performed by the state fire marshal that may be charged to a property owner or occupant who requests the inspection. The bill requires the commissioner to adopt guidelines for assigning potential fire safety risk to state-owned and state‑leased buildings. The bill requires the commissioner to delegate by rule to the state fire marshal the authority to take disciplinary and enforcement action against a person or firm licensed, registered, or otherwise regulated by TDI through the state fire marshal and sets out provisions related to administrative penalties.