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.