SRC-JJJ H.B. 2051 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2051
By: Thompson (Jackson)
Economic Development
5/14/1999
Engrossed


DIGEST 

There is concern that certain insurance carriers' practice of significantly
reducing the commission levels to agents for small employers is a
disincentive to agents to solicit business from smaller employers.  H.B.
2051 clarifies for small employer carriers when it is allowable to vary
rates based on the number of employees. This bill also precludes carriers
from varying commission rates based on the number of employees in a group. 

PURPOSE

As proposed, H.B. 2051 establishes conditions regarding classes of business
for small employer health benefit plans. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 26.02(5), Insurance Code, to redefine "case
characteristics." 

SECTION 2. Amends Article 26.73, Insurance Code, by adding Subsection (c),
to authorize a small employer carrier to vary the agent commission rates
paid on small employer premiums, but only if the only factor that is used
to differentiate agent commission levels is the number of employees covered
under the small employer plan, and the commission levels are inversely
related to the number of employees covered under the small employer plan.  

SECTION 3. Effective date: September 1, 1999.
  Makes application of this Act prospective to January 1, 2000.

SECTION 4. Emergency clause.