By Junell                                       H.B. No. 1339

      75R5344 SAW-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to insurance industry advisory organizations.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 3(c), Article 5.73, Insurance Code, is

 1-5     amended to read as follows:

 1-6           (c)  If, after a hearing, the department [Board] finds that

 1-7     the furnishing of specified services by an advisory organization

 1-8     involves any act or practice which is unfair or unreasonable or

 1-9     otherwise inconsistent with the provisions of this subchapter or

1-10     with the applicable laws of this State, it may issue a written

1-11     order specifying in what respects such act or practice is unfair or

1-12     unreasonable or otherwise inconsistent with the provisions of law

1-13     and requiring the discontinuance of such act or practice. In

1-14     addition to any other remedies available at law, the department

1-15     [Board] may impose any sanction authorized under Article 1.10 of

1-16     this code.

1-17           SECTION 2.  Sections 4(a) and (c), Article 5.73, Insurance

1-18     Code, are amended to read as follows:

1-19           (a)  The department [Board] shall annually require an audit

1-20     of any advisory organization that provides statistics or other

1-21     information to the department [Board] in a proceeding to set rates.

1-22     The audit shall be conducted under rules adopted by the

1-23     commissioner [Board], at the expense of the advisory organization.

1-24     The audit must examine the  advisory organization's method of

 2-1     collecting, analyzing, and reporting data to assure the accuracy of

 2-2     data.  The audit may examine source documents within individual

 2-3     companies.  Except for individual company information, an audit is

 2-4     public information.

 2-5           (c)  Notwithstanding any provision to the contrary, reporting

 2-6     of data by an insurer under this article does not relieve the

 2-7     insurer of responsibility of reporting that data directly to the

 2-8     department [Board] at the department's [Board's] request.

 2-9           SECTION 3.  Section 5, Article 5.73, Insurance Code, is

2-10     amended to read as follows:

2-11           Sec. 5.  The authority granted to the department under this

2-12     article is subject to review by the Sunset Advisory Commission

2-13     under Chapter  325, Government Code (Texas Sunset Act), during that

2-14     commission's periodic review of the Texas Department of Insurance

2-15     [expires September 1, 1997].

2-16           SECTION 4.  This Act takes effect September 1, 1997.

2-17           SECTION 5.  The importance of this legislation and the

2-18     crowded condition of the calendars in both houses create an

2-19     emergency and an imperative public necessity that the

2-20     constitutional rule requiring bills to be read on three several

2-21     days in each house be suspended, and this rule is hereby suspended.