By Maxey                                         H.B. No. 653

      75R2967 SAW-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to the exemption of insurance coverage self-funded by the

 1-3     state from certain insurance laws.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Section 5(f), Texas Employees Uniform Group

 1-6     Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance

 1-7     Code), is amended to read as follows:

 1-8           (f)  The trustee, in its sole discretion and in accordance

 1-9     with the requirements of this section, shall determine those plans

1-10     of coverages for which the trustee does not intend to purchase

1-11     insurance and which it intends to provide directly from the

1-12     Employees Life, Accident, and Health Insurance and Benefits Fund.

1-13     [Any plan of coverages for which the trustee does not purchase

1-14     insurance but provides under this Act on a self-funded basis is

1-15     exempt from any other insurance law unless the law expressly

1-16     applies to this plan or this Act.]  The trustee shall make an

1-17     estimate of the unrestricted balance of the fund.  Unless such

1-18     estimated unrestricted balance is equal to at least 10 percent of

1-19     the total benefits expected to be provided directly from the fund

1-20     as a result of claims incurred during the fiscal year, the trustee

1-21     shall include in the contributions required the amount necessary to

1-22     establish an unrestricted balance in the fund of not less than 10

1-23     percent.  The unrestricted balance shall be placed in a contingency

1-24     reserve fund to provide for adverse fluctuations in future charges,

 2-1     claims, costs, or expenses of the program.

 2-2           SECTION 2.  This Act takes effect September 1, 1997,  and

 2-3     applies only to a plan of coverage that is delivered, issued for

 2-4     delivery, or renewed on or after September 1, 1997.  A plan that is

 2-5     delivered, issued for delivery, or renewed before September 1,

 2-6     1997, is governed by the law as it existed immediately before the

 2-7     effective date of this Act, and that law is continued in effect for

 2-8     that purpose.

 2-9           SECTION 3.  The importance of this legislation and the

2-10     crowded condition of the calendars in both houses create an

2-11     emergency and an imperative public necessity that the

2-12     constitutional rule requiring bills to be read on three several

2-13     days in each house be suspended, and this rule is hereby suspended.