By Maxey                                        H.B. No. 1434

      75R6496 DLF-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to underwriting guidelines used by certain health benefit

 1-3     plans.

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

 1-5           SECTION 1.  Article 1.24D, Insurance Code, is amended to read

 1-6     as follows:

 1-7           Art. 1.24D.  CONFIDENTIALITY OF UNDERWRITING GUIDELINES

 1-8           Sec. 1.  DEFINITION.  In this article, "health benefit plan"

 1-9     means a plan that:

1-10                 (1)  provides benefits for medical or surgical expenses

1-11     incurred as a result of a health condition, accident, or sickness,

1-12     including an individual, group, blanket, or franchise insurance

1-13     policy or insurance agreement, a group hospital service contract,

1-14     or an individual or group evidence of coverage that is offered by:

1-15                       (A)  an insurance company;

1-16                       (B)  a group hospital service corporation

1-17     operating under Chapter 20 of this code;

1-18                       (C)  a fraternal benefit society operating under

1-19     Chapter 10 of this code;

1-20                       (D)  a stipulated premium insurance company

1-21     operating under Chapter 22 of this code; or

1-22                       (E)  a health maintenance organization operating

1-23     under the Texas Health Maintenance Organization Act (Chapter 20A,

1-24     Vernon's Texas Insurance Code);

 2-1                 (2)  is offered under Chapter 26 of this code; or

 2-2                 (3)  is offered by an approved nonprofit health

 2-3     corporation that is certified under Section 5.01(a), Medical

 2-4     Practice Act (Article 4495b, Vernon's Texas Civil Statutes), and

 2-5     that holds a certificate of authority issued by the commissioner

 2-6     under Article 21.52F of this code.

 2-7           Sec. 2.  REQUEST FOR UNDERWRITING GUIDELINES AND RELATED

 2-8     INFORMATION; CONFIDENTIALITY.  (a)  The department or the office of

 2-9     public insurance counsel may request and receive copies of an

2-10     insurer's underwriting guidelines.

2-11           (b)  The department shall request copies of underwriting

2-12     guidelines used by insurers and other entities in writing health

2-13     benefit plans. The insurer or other entity shall submit the

2-14     requested guidelines to the department, together with statistical

2-15     data supporting the use of each guideline in the form requested by

2-16     the department.

2-17           (c)  Except as provided by Subsection (d) of this section,

2-18     underwriting [Underwriting] guidelines are confidential and the

2-19     department or the office of public insurance counsel may not make

2-20     the guidelines available to the public.

2-21           (d)  The [, provided, however, that the] department or the

2-22     office of public insurance counsel may disclose a summary of the

2-23     underwriting guidelines.  The department shall prepare and make

2-24     available to the public a summary of the information submitted to

2-25     the department under Subsection (b) of this section.  A summary

2-26     prepared under this subsection may [in a manner that does] not

2-27     directly or indirectly identify the insurer who provided the

 3-1     guidelines and information.

 3-2           Sec. 3.  VIOLATIONS OF CODE.  [(b)]  This article [law] does

 3-3     not preclude the use of underwriting guidelines or other

 3-4     information submitted under this article as evidence to prosecute a

 3-5     violation of this code.  If a guideline or related information is

 3-6     [guidelines are] used to prosecute a violation of the law, all

 3-7     copies of the guideline or information [those guidelines] shall be

 3-8     presumed confidential and subject to a protective order until all

 3-9     appeals on the case have been exhausted.  After the exhaustion of

3-10     all appeals, if an insurer is found to have violated this code, the

3-11     copies of the underwriting guideline or related information that

3-12     was [guidelines that were] used as evidence of the violation shall

3-13     no longer be presumed confidential.

3-14           Sec. 4.  ACCESS TO GUIDELINES AND RELATED INFORMATION

3-15     SUBMITTED TO DEPARTMENT.  [(c)]  When underwriting [such]

3-16     guidelines and related information  are furnished to the department

3-17     or the office of public insurance counsel under this article, only

3-18     those persons within the department or the office of public

3-19     insurance counsel with a need to know will have access to such

3-20     guidelines and information.  The department and the office of

3-21     public insurance counsel shall establish internal control systems

3-22     to limit such access and keep a record thereof.

3-23           Sec. 5.  PENALTY.  [(d)]  Violations of the provisions of

3-24     this article shall be considered as violation of the open records

3-25     law, Chapter 552, Government Code [424, Acts of the 63rd

3-26     Legislature, Regular Session, 1973 (Article 6252-17a, Vernon's

3-27     Texas Civil Statutes)].

 4-1           SECTION 2.  The Texas Department of Insurance shall prepare

 4-2     the summary of the information submitted to the department under

 4-3     Section 2(b), Article 1.24D, Insurance Code, as amended by this

 4-4     Act, not later than September 1, 1998.

 4-5           SECTION 3.  The importance of this legislation and the

 4-6     crowded condition of the calendars in both houses create an

 4-7     emergency and an imperative public necessity that the

 4-8     constitutional rule requiring bills to be read on three several

 4-9     days in each house be suspended, and this rule is hereby suspended,

4-10     and that this Act take effect and be in force from and after its

4-11     passage, and it is so enacted.