By:  Cain                                             S.B. No. 1565

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the qualifications and compensation of persons

 1-2     performing examinations of insurance organizations.

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

 1-4           SECTION 1.  Article 1.04A, Insurance Code, is amended to read

 1-5     as follows:

 1-6           Art. 1.04A.  Salaried Examiners.  (a)  In making examinations

 1-7     of any insurance organization as provided by law, the department

 1-8     shall only [may] use its own salaried examiners or [may use] the

 1-9     services of persons having (i) knowledge of this code, the Texas

1-10     Administrative Code, and departmental procedural guidelines, rules,

1-11     and regulations; (ii) knowledge of association examination

1-12     procedures; (iii) the credentials of a certified financial examiner

1-13     as granted by the Society of Financial Examiners; (iv) extensive

1-14     experiences as the examiner-in-charge of association examinations;

1-15     (v) ability to supervise and train examination staff members of the

1-16     department; (vi) at least 10 years of examination experience as an

1-17     employee of the department; and (vii) Texas examination experience

1-18     within the preceding five years [or firms qualified to perform such

1-19     examinations or assist in the performance of such examinations].

1-20     Such examination shall cover the period of time that the department

1-21     requests.  In the event the department does not specify a longer

1-22     period of time, such examination shall be from the time of the last

1-23     examination theretofore made by the department to December 31st of

 2-1     the year preceding the examination then being made.  All fees paid

 2-2     to those persons [or firms] whose services are used shall be in

 2-3     accordance with the provisions of this article [paid at the usual

 2-4     and customary rates charged for the performance of those services,

 2-5     subject to the right of the Commissioner to disapprove for payment

 2-6     any fees that are excessive in relation to the services actually

 2-7     performed].

 2-8           (b)  Compensation for the contract examiners will be

 2-9     calculated as 120 percent of the step 4, salary group 21, annual

2-10     amount from the position classification salary schedule and

2-11     converted to a daily rate.  No salary charge shall be made for days

2-12     on which examiners are absent due to sickness or any other cause,

2-13     provided the company is open for the normal transaction of

2-14     business.  If the examiner is available for work on-site on any

2-15     national holiday or any other day that the company has optionally

2-16     closed for business, the examiner shall be allowed salary and per

2-17     diem allowances for that particular day.  Meals and lodging

2-18     expenses for examinations performed outside of a 50-mile radius of

2-19     the examiner's official domicile will be reimbursed on a basis not

2-20     to exceed rates published in the geographical expense reimbursement

2-21     plan (GERP).  No per diem meals and lodging reimbursement will be

2-22     allowed for examinations performed within a 50-mile radius of the

2-23     examiner's official domicile.  Examiners are authorized to return

2-24     to their official domicile every other weekend.  Expenses will be

2-25     paid based on the lesser of airfare or mileage.  This reimbursement

 3-1     is made in lieu of the per diem allowance.  Mileage reimbursement

 3-2     will be paid according to the rules of reimbursement in effect for

 3-3     department examiners.  Payments under this subsection [Such

 3-4     payment] shall be made by the insurance organization being examined

 3-5     and all such examination fees so paid shall be allowed as a credit

 3-6     on the amount of premium or other taxes to be paid by any such

 3-7     insurance organization for the taxable year during which

 3-8     examination fees are paid just as examination fees are credited

 3-9     when the department uses its own salaried examiners.

3-10           SECTION 2.  If any provision of this Act or its application

3-11     to any person or circumstance is held invalid, the invalidity does

3-12     not affect other provisions or applications of this Act that can be

3-13     given effect without the invalid provision or application, and to

3-14     this end the provisions of this Act are declared to be severable.

3-15           SECTION 3.  Any rule adopted by the Commissioner of Insurance

3-16     which is not in conformity with the standards set forth in Section

3-17     1 of this Act shall be null and void and of no force or effect.

3-18           SECTION 4.  If any provision of this Act is in conflict with

3-19     any other law, rule, regulation, or provision of the Insurance

3-20     Code, this Act shall control.

3-21           SECTION 5.  The importance of this legislation and the

3-22     crowded condition of the calendars in both houses create an

3-23     emergency and an imperative public necessity that the

3-24     constitutional rule requiring bills to be read on three several

3-25     days in each house be suspended, and this rule is hereby suspended,

 4-1     and that this Act take effect and be in force from and after its

 4-2     passage, and it is so enacted.