75R12153 PB-F By Averitt H.B. No. 2090 Substitute the following for H.B. No. 2090: By Averitt C.S.H.B. No. 2090 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regulation of stop-loss insurance policies. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is 1-5 amended by adding Article 21.29 to read as follows: 1-6 Art. 21.29. STOP-LOSS INSURANCE 1-7 Sec. 1. DEFINITIONS. In this article: 1-8 (1) "Aggregate attachment point" means the dollar 1-9 amount of a self-funded benefit plan's liability incurred for all 1-10 plan participants, beyond which the issuer of a policy of stop-loss 1-11 insurance becomes liable. 1-12 (2) "Expected claims" means the dollar amount of 1-13 claims for which a self-funded health plan would reasonably be 1-14 expected to incur liability in the absence of a stop-loss insurance 1-15 policy or other insurance. 1-16 (3) "Individual attachment point" means the dollar 1-17 amount of a self-funded health plan's liability incurred, during 1-18 the policy year, for an individual plan participant, beyond which 1-19 the issuer of a policy of stop-loss insurance becomes liable. 1-20 (4) "Plan participant" means an eligible employee, a 1-21 retired employee, or a dependent of an employee or retired employee 1-22 who is covered by a self-funded health plan. 1-23 (5) "Self-funded health plan" means an employee 1-24 welfare benefit plan or other arrangement authorized by law that: 2-1 (A) provides accident and sickness benefits to 2-2 plan participants; and 2-3 (B) retains at least partial liability for 2-4 payment of the benefits. 2-5 (6) "Stop-loss insurance" means a policy of insurance 2-6 which indemnifies, directly or indirectly, a self-funded health 2-7 plan for a portion of the plan's liability for plan participants. 2-8 The term includes excess loss insurance and other equivalent 2-9 coverage. 2-10 Sec. 2. APPLICATION OF ARTICLE. This article applies to 2-11 stop-loss insurance that, due to the low level at which the 2-12 insurer's liability attaches, serves the same function as 2-13 conventional group accident and health insurance policies. This 2-14 article does not apply to employers or self-funded health plans. 2-15 Sec. 3. APPLICABILITY OF INSURANCE LAWS TO STOP-LOSS 2-16 INSURANCE POLICIES. (a) This article applies to each insurer 2-17 subject to Chapter 8, 18, or 19 of this code, as amended, and every 2-18 life, health, and accident insurer governed by Chapter 3 and 2-19 Chapter 20 of this code, as amended, that is authorized to issue 2-20 stop-loss insurance. 2-21 (b) An insurer may not deliver, issue for delivery, or use a 2-22 policy of stop-loss insurance in this state unless the policy form 2-23 has been filed with and approved by the department as provided by 2-24 Article 3.42 of this code. 2-25 (c) Each provision of this code that applies to a policy or 2-26 certificate of group accident and health insurance shall apply to a 2-27 policy of stop-loss insurance that is issued on or after September 3-1 1, 1997, and: 3-2 (1) has an individual attachment point of less than 3-3 $5,000; or 3-4 (2) has an aggregate attachment point that is lower 3-5 than 110 percent of expected claims. 3-6 (d) Any stop-loss policy issued prior to September 1, 1997, 3-7 and subsequently renewed, shall be grandfathered from the 3-8 requirements of this article and shall be subject to the law as it 3-9 existed immediately prior to the effective date of this article. 3-10 Sec. 4. RULEMAKING AUTHORITY. The commissioner may adopt 3-11 rules as necessary to implement this article. 3-12 SECTION 2. This Act shall take effect on September 1, 1997, 3-13 and will apply to any policy issued on or after the effective date. 3-14 Any policy issued prior to September 1, 1997, and subsequently 3-15 renewed, shall be grandfathered from the requirements of this Act 3-16 and shall be subject to the law as it existed immediately prior to 3-17 the effective date of this Act. 3-18 SECTION 3. The importance of this legislation and the 3-19 crowded condition of the calendars in both houses create an 3-20 emergency and an imperative public necessity that the 3-21 constitutional rule requiring bills to be read on three several 3-22 days in each house be suspended, and this rule is hereby suspended.