By Tillery H.B. No. 706
76R3296 AJA-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to contingency reserves for the state uniform group
1-3 insurance program.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 5(f) and (g), Texas Employees Uniform
1-6 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
1-7 Insurance Code), are amended to read as follows:
1-8 (f) The trustee, in its sole discretion and in accordance
1-9 with the requirements of this section, shall determine those plans
1-10 of coverages for which the trustee does not intend to purchase
1-11 insurance and which it intends to provide directly from the
1-12 Employees Life, Accident, and Health Insurance and Benefits Fund.
1-13 Any plan of coverages for which the trustee does not purchase
1-14 insurance but provides under this Act on a self-funded basis is
1-15 exempt from any other insurance law unless the law expressly
1-16 applies to this plan or this Act. [The trustee shall make an
1-17 estimate of the unrestricted balance of the fund. Unless such
1-18 estimated unrestricted balance is equal to at least 10 percent of
1-19 the total benefits expected to be provided directly from the fund
1-20 as a result of claims incurred during the fiscal year, the trustee
1-21 shall include in the contributions required the amount necessary to
1-22 establish an unrestricted balance in the fund of not less than 10
1-23 percent. The unrestricted balance shall be placed in a contingency
1-24 reserve fund to provide for adverse fluctuations in future charges,
2-1 claims, costs, or expenses of the program.]
2-2 (g) Before the first day of each state fiscal biennium, the
2-3 trustee shall estimate for an average 60-day period during the
2-4 biennium the expenditures from the fund anticipated for
2-5 self-funded plans, taking into account projected incurred claims
2-6 and administrative expenses for those plans. The trustee shall
2-7 place the estimated amount in a contingency reserve fund to provide
2-8 for adverse fluctuations in claims or administrative expenses. The
2-9 trustee shall include in each request for legislative
2-10 appropriations to the program the amount the trustee determines to
2-11 be necessary to maintain the contingency reserve fund at the level
2-12 required by this subsection. [The trustee shall determine the
2-13 contributions required to provide coverages directly from the fund
2-14 and shall submit this information together with supporting
2-15 documentation to the State Board of Insurance for examination and
2-16 evaluation. Within 15 days of the receipt of such information, the
2-17 State Board of Insurance shall certify the actuarial soundness of
2-18 the proposed level of contributions or shall advise the trustees of
2-19 any modifications prerequisite to provision of such certification.]
2-20 SECTION 2. The change in law made by this Act applies
2-21 beginning with the state fiscal biennium beginning September 1,
2-22 1999.
2-23 SECTION 3. The importance of this legislation and the
2-24 crowded condition of the calendars in both houses create an
2-25 emergency and an imperative public necessity that the
2-26 constitutional rule requiring bills to be read on three several
2-27 days in each house be suspended, and this rule is hereby suspended.