LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          March 2, 1995



 TO:     Honorable John Smithee                 IN RE:  House Bill No. 222,
         Committee on Insurance                                as amended
         House of Representatives                       By: Brimer
         Austin, Texas








FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
222 (relating to the licensing of agents for health maintenance
organizations) this office has determined the following:

The bill would amend the Insurance Code with new provisions for
licensing agents who represent health maintenance organizations
(HMO).   The bill would also repeal similar provisions of the
Insurance Code, known as the Texas Health Maintenance
Organization Act effective January 1, 1998.

Implementation of the bill would require modification of license
application and renewal forms and changes to the examination for
Group 1 agents to include HMO questions.  Programming changes to
the mainframe database for the Department of Insurance would also
be necessary.  The bill would also require development and
adoption of new procedural rules.  The Department anticipates
that most new workload would be associated with inquiries related
to the changes, potentially 3,000 inquiries during fiscal year
1996 and 1,500 during 1997.  Costs for additional
responsibilities could be absorbed within existing similar
functions.

The Department anticipates that revenue losses would result from
the bill's provisions in connection with elimination of the HMO
agent license.  Approximately 1,500 agents currently hold both
Group 1 and HMO licenses.  The current application fee for an HMO
agent license is $60 and the renewal fee is $48.  Revenue losses
of approximately $36,000 per year are projected based on the    




current number of HMO agent licenses and present renewal rates.
 
The probable fiscal implication of implementing the provisions of
the bill during each of the first  five years following passage
is estimated as follows:




            Fiscal   Probable Revenue 
             Year     Loss from  GR   
                      Consolidated -  
                      Department of   
                        Insurance     
                    Operating Fund 036
                                      
          1996                 $36,000
          1997                  36,000
                                      
          1998                  36,000
                                      
          1999                  36,000
          2000                  36,000
                                      
                                      
                                      

       Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.

No fiscal implication to units of local government is
anticipated.




Source:   Department of Insurance
          LBB Staff: JK, RM, RR