RS H.B. 2062 75(R)    BILL ANALYSIS


INSURANCE
H.B. 2062
By: Van de Putte
4-18-97
Committee Report (Unamended)

BACKGROUND 

Current law prohibits Department of Insurance staff from participating as
a party in certain important rate hearings.  The prohibition has resulted
in hearings where no party has introduced evidence necessary for the
Commissioner to use in making a decision.  For example, statutes (enacted
in 1995) required a number of premium discounts; in benchmark rate
hearings in 1995 and 1996, even though the Commissioner requested evidence
on statutory discounts, none of the parties introduced evidence relating
to these discounts.  The Commissioner had to call additional hearings to
address the statutory requirements.  In addition, the current structure
results in a hearing record that may not contain adequate evidence to be
considered by the Commissioner in order to arrive at the best decision for
both consumers and the industry.  The Office of Public Insurance Counsel
provides a valuable function in representing consumer interests, but it
has limited resources and cannot duplicate or provide all the expertise
and knowledge of the Department staff.  TDI is the only state agency  that
must decide complex cases of this nature without the benefit of any staff
participation. 

PURPOSE
The purpose of H.B. 2062 is to amend Article 1.09-5 of the Texas Insurance
Code, so that Department staff can participate in and present evidence to
be considered in rate hearings. Existing restrictions on staff
participation are deleted.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. - Amends Article 1.09-5, Insurance Code, to read as follows:

Art. 1.09-5.DEPARTMENT PARTICIPATION IN PROCEEDINGS TO SET RATES.

(a) The department may appear as a matter of right as a party, present
evidence, or question witnesses in any proceeding before the commissioner
or the designated hearings officer in which insurance rates are set under
this code. 

(b) The general counsel or an assistant general counsel may be designated
by the commissioner and may serve as a hearings officer in any proceeding
in which insurance rates are set or any prehearing proceeding, provided
that any final decision relating to rates must be made by the
commissioner. 

SECTION 2.  Effective date - Article would take effect September 1, 1997.

SECTION 3.  Emergency Clause