1-1     By:  Cain                                             S.B. No. 1565

 1-2           (In the Senate - Filed March 14, 1997; March 20, 1997, read

 1-3     first time and referred to Committee on Economic Development;

 1-4     April 18, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 6, Nays 1; April 18, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1565                    By:  Cain

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the qualifications and compensation of persons

1-11     performing examinations of insurance organizations.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Article 1.04A, Insurance Code, is amended to read

1-14     as follows:

1-15           Art. 1.04A.  Salaried Examiners.  (a)  In making examinations

1-16     of any insurance organization as provided by law, the department

1-17     shall only [may] use its own salaried examiners or [may use] the

1-18     services of persons having (i) knowledge of this code, the Texas

1-19     Administrative Code, and departmental procedural guidelines, rules,

1-20     and regulations; (ii) knowledge of association examination

1-21     procedures; (iii) the credentials of a certified financial examiner

1-22     as granted by the Society of Financial Examiners; (iv) extensive

1-23     experiences as the examiner-in-charge of association examinations;

1-24     (v) ability to supervise and train examination staff members of the

1-25     department; (vi) at least 10 years of examination experience as an

1-26     employee of the department; and (vii) Texas examination experience

1-27     within the preceding five years [or firms qualified to perform such

1-28     examinations or assist in the performance of such examinations].

1-29     Such examination shall cover the period of time that the department

1-30     requests.  In the event the department does not specify a longer

1-31     period of time, such examination shall be from the time of the last

1-32     examination theretofore made by the department to December 31st of

1-33     the year preceding the examination then being made.  All fees paid

1-34     to those persons [or firms] whose services are used shall be in

1-35     accordance with the provisions of this article [paid at the usual

1-36     and customary rates charged for the performance of those services,

1-37     subject to the right of the Commissioner to disapprove for payment

1-38     any fees that are excessive in relation to the services actually

1-39     performed].

1-40           (b)  Compensation for the contract examiners will be

1-41     calculated as 120 percent of the step 4, salary group 21, annual

1-42     amount from the position classification salary schedule and

1-43     converted to a daily rate.  No salary charge shall be made for days

1-44     on which examiners are absent due to sickness or any other cause,

1-45     provided the company is open for the normal transaction of

1-46     business.  If the examiner is available for work on site on any

1-47     national holiday or any other day that the company has optionally

1-48     closed for business, the examiner shall be allowed salary and per

1-49     diem allowances for that particular day.  Meals and lodging

1-50     expenses for examinations performed outside of a 50-mile radius of

1-51     the examiner's official domicile will be reimbursed on a basis not

1-52     to exceed rates published in the geographical expense reimbursement

1-53     plan (GERP).  No per diem meals and lodging reimbursement will be

1-54     allowed for examinations performed within a 50-mile radius of the

1-55     examiner's official domicile.  Examiners are authorized to return

1-56     to their official domicile every other weekend.  Expenses will be

1-57     paid based on the lesser of airfare or mileage.  This reimbursement

1-58     is made in lieu of the per diem allowance.  Mileage reimbursement

1-59     will be paid according to the rules of reimbursement in effect for

1-60     department examiners.  Payments under this subsection [Such

1-61     payment] shall be made by the insurance organization being examined

1-62     and all such examination fees so paid shall be allowed as a credit

1-63     on the amount of premium or other taxes to be paid by any such

1-64     insurance organization for the taxable year during which

 2-1     examination fees are paid just as examination fees are credited

 2-2     when the department uses its own salaried examiners.

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

 2-4     to any person or circumstance is held invalid, the invalidity does

 2-5     not affect other provisions or applications of this Act that can be

 2-6     given effect without the invalid provision or application, and to

 2-7     this end the provisions of this Act are declared to be severable.

 2-8           SECTION 3.  Any rule adopted by the Commissioner of Insurance

 2-9     which is not in comformity with the standards set forth in Section

2-10     1 of this Act shall be null and void and of no force or effect.

2-11           SECTION 4.  If any provision of this Act is in conflict with

2-12     any other law, rule, regulation, or provision of the Insurance

2-13     Code, this Act shall control.

2-14           SECTION 5.  The importance of this legislation and the

2-15     crowded condition of the calendars in both houses create an

2-16     emergency and an imperative public necessity that the

2-17     constitutional rule requiring bills to be read on three several

2-18     days in each house be suspended, and this rule is hereby suspended,

2-19     and that this Act take effect and be in force from and after its

2-20     passage, and it is so enacted.

2-21                                  * * * * *