SRC-JFA S.B. 1565 75(R)BILL ANALYSIS


Senate Research CenterS.B. 1565
By: Cain
Economic Development
4-15-97
Committee Report (Amended)


DIGEST 

Currently, the Texas Department of Insurance (department) is authorized to
use its own salaried examiners or the services of qualified persons or
firms in making examinations of insurance organizations.  This provision
may allow the department to hire an examiner who has inadequate background
and knowledge to perform such examinations.  This bill would require the
department to use its own salaried examiners or the services of other
persons who meet certain qualifications.  

PURPOSE

As proposed, S.B. 1565 revises the qualifications and compensation of
persons performing examinations of insurance organizations.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 1.04A, Insurance Code, as follows: 

Article 1.04A.  SALARIED EXAMINERS.  (a)  Requires, rather than
authorizes, the Department of Insurance (department), in making
examinations of any insurance organization as provided by law, to only use
its own salaried examiners or the services of persons having knowledge of
this code, the Texas Administrative Code, and departmental procedural
guidelines, rules, and regulations; knowledge of association examination
procedures; the credentials of a certified financial examiner as granted
by the Society of Financial Examiners; extensive experiences as the
examiner-in-charge of association examinations; ability to supervise and
train examination staff members of the department; at least 10 years of
examination experience as an employee of the department; and Texas
examination experience within the preceding five years.  Deletes text
authorizing the department to use the services of persons or firms
qualified to perform such examinations or assist in the performance of
such examinations.  Requires all fees paid to those persons whose services
are used to be in accordance with the provisions of this article.  Deletes
text relating to payment at the usual and customary rates charged for
examination services. Makes conforming changes.    

(b)  Provides that compensation for the contract examiners to be
calculated as 120 percent of the step 4, salary group 21, annual amount
from the position classification salary schedule and converted to a daily
rate.  Prohibits a salary charge from being made for days on which
examiners are absent due to sickness or any other cause, provided the
company is open for the normal transaction of business.  Requires the
examiner, if the examiner is available for work on site on any national
holiday or any other day that the company has optionally closed for
business, to be allowed salary and per diem allowances for that particular
day.  Provides that meals and lodging expenses for examinations performed
outside of a 50-mile radius of the examiner's official domicile will be
reimbursed on a basis not to exceed rates published in the geographical
expense reimbursement plan (GERP).  Provides that  no per diem meals and
lodging reimbursement will be allowed for examinations performed within a
50-mile radius of the examiner's official domicile.  Provides that
examiners are authorized to return to the official domicile every other
weekend.  Provides that expenses will be paid based on the lesser of
airfare or mileage. Provides that this reimbursement is made in lieu of
the per diem allowance.  Provides that mileage reimbursement will be paid
according to the rules of reimbursement in effect for department
examiners.  Makes conforming changes.   

SECTION 2. Severability Clause. 

SECTION 3. Requires any rule adopted by the commissioner of insurance
which is not in conformity to the standards set forth in SECTION 1 of this
Act to be null and void and of no force or effect. 

SECTION 4. Provides that if any provision of this Act is in conflict with
any other law, rule, regulations, or provisions of the Insurance Code,
this Act shall control.   

SECTION 5. Emergency clause.
  Effective date: upon passage. 

SUMMARY OF COMMITTEE CHANGES

Amendment 1

Page 2, line 8, insert between the words "the" and "examiners," the word
"contract."