By Siebert, Eiland, Brimer H.B. No. 3697
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the operation of the Texas Workers' Compensation
1-3 Insurance Fund and the disposition of certain surpluses of that
1-4 fund.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 9(c), Article 5.76-3, Insurance Code, is
1-7 amended to read as follows:
1-8 (c) Notwithstanding any other provision of this code or any
1-9 other insurance law of this state [article], the fund may establish
1-10 multitiered premium systems to price [provide] workers'
1-11 compensation insurance policies to insureds in [who would not
1-12 otherwise meet] the fund's competitive programs, as well as to
1-13 insureds to whom policies are offered by the fund under Article
1-14 5.76-4 of this code [underwriting standards]. Those multitiered
1-15 systems shall be filed in accordance with Article 5.55 of this
1-16 code. The systems may provide for higher or lower premium payments
1-17 by insureds based on the fund's evaluation of the underwriting
1-18 characteristics of the individual risk and the appropriate premium
1-19 to be charged for the policy coverages [who present higher than
1-20 normal risks within a class].
1-21 SECTION 2. Section 12, Article 5.76-3, Insurance Code, is
1-22 amended to read as follows:
1-23 Sec. 12. PAYMENT OF TAXES AND FEES; GUARANTY ASSOCIATION.
1-24 (a) The [Except as provided in Subsection (b) of this section,
2-1 the] fund shall pay premium taxes, maintenance taxes, and the
2-2 maintenance tax surcharge established under Article 5.76-5 of this
2-3 code in the same manner as an insurance carrier authorized by the
2-4 Texas Department of Insurance to write workers' compensation
2-5 insurance in this state.
2-6 (b) [The fund is granted a tax credit equal to two percent
2-7 of the gross workers' compensation premiums written by the fund
2-8 during the period for which taxes are assessed. The credit may be
2-9 applied only against the taxes and surcharge established in
2-10 Subsection (a) of this section and shall be applied against the
2-11 taxes and surcharge in the following order:]
2-12 [(1) maintenance tax surcharge;]
2-13 [(2) maintenance taxes assessed to support the Texas
2-14 Department of Insurance;]
2-15 [(3) maintenance tax assessed to support the
2-16 commission; and]
2-17 [(4) premium taxes.]
2-18 [(c)] The fund shall pay [all other] taxes and fees or any
2-19 payments due in lieu of taxes in the same manner as an insurance
2-20 carrier authorized and admitted by the Texas Department of
2-21 Insurance to do insurance business in this state under a
2-22 certificate of authority that includes authorization to write
2-23 workers' compensation insurance.
2-24 (c) [(d)] The fund is [may not be] a member of and is [nor
2-25 be] protected by the Texas Property and Casualty Insurance Guaranty
2-26 Association. The fund [and] is [not] subject to assessment under
2-27 the Texas Property and Casualty Insurance Guaranty Act (Article
3-1 21.28-C, Insurance Code).
3-2 SECTION 3. Article 5.76-5, Insurance Code, is amended by
3-3 adding Sections 10A and 10B to read as follows:
3-4 Sec. 10A. REIMBURSEMENT OF MAINTENANCE TAX SURCHARGE BY
3-5 INSURERS. (a) The comptroller, in cooperation with the
3-6 department, shall prepare a list, by year, of the insurance
3-7 companies and certified self-insurers who paid the maintenance tax
3-8 surcharge assessed under Section 10 of this article for calendar
3-9 years 1991-1997. The list must include the amount by year of the
3-10 maintenance tax surcharge paid by each insurance company and
3-11 certified self-insurer. The comptroller shall provide the lists
3-12 compiled under this subsection to the fund not later than the 60th
3-13 day after the effective date of this section.
3-14 (b) Notwithstanding Sections 111.103 and 111.107, Tax Code,
3-15 not later than the 45th day after the date on which the fund
3-16 receives the lists, the fund shall issue separate checks, in the
3-17 amount determined under Subsection (a) of this section, to each
3-18 insurance company and certified self-insurer for each year in which
3-19 the maintenance tax surcharge was paid. The fund shall make the
3-20 payments from the surplus of the fund.
3-21 (c) Each policyholder is entitled to receive a
3-22 proportionate share of the amount of the maintenance tax surcharge
3-23 paid by the insurance company providing the policyholder's workers'
3-24 compensation insurance coverage during each 12-month recoupment
3-25 period beginning June 1, 1992, and ending May 31, 1998. The share
3-26 shall be determined as follows:
3-27 (1) the insurance company shall determine the total
4-1 gross premium, as defined by the comptroller on the effective date
4-2 of this section, of all policyholders with coverage written during
4-3 each recoupment period beginning June 1, 1992, through May 31,
4-4 1998;
4-5 (2) the insurance company shall divide the total gross
4-6 premium for each recoupment year into the amount of maintenance tax
4-7 surcharge paid based on the prior calendar year's premium to
4-8 determine the percentage factor to be applied to each
4-9 policyholder's premium; and
4-10 (3) the percentage factor determined under Subdivision
4-11 (2) of this subsection shall be applied to the policyholder's
4-12 gross premium developed during each recoupment period to establish
4-13 the amount of maintenance tax surcharge to be refunded to each
4-14 individual policyholder.
4-15 (d) For each policy written during the recoupment period,
4-16 each insurance company shall issue a refund check to the
4-17 policyholder for the amount of the refund of the maintenance tax
4-18 surcharge. All refunds under this section must be made not later
4-19 than September 1, 2000.
4-20 (e) Each insurance company shall file with the department a
4-21 report that covers each recoupment period. The insurance company
4-22 shall file the report not later than January 1, 2001. The report
4-23 must include:
4-24 (1) the name of each policyholder receiving a refund;
4-25 (2) the amount of the refund sent to the policyholder;
4-26 and
4-27 (3) the date that the refund was sent.
5-1 (f) If an insurance company is unable to locate a
5-2 policyholder, the insurance company shall notify the department in
5-3 the manner prescribed by the department and shall return the amount
5-4 of the refund to the fund for deposit in the surplus of the fund.
5-5 The department shall make a reasonable effort to locate the
5-6 policyholder, using procedures and notices analogous to those
5-7 required under Chapter 74, Property Code, for the disposition of
5-8 unclaimed property. The department may charge against the amount
5-9 of any refund the costs incurred by the department in locating the
5-10 policyholder, including expenses for publishing notice. If the
5-11 policyholder is located, the department shall remit the amount of
5-12 the refund, less the associated costs, from the fund to the
5-13 policyholder. If, after the procedures required under this
5-14 subsection are exhausted, the policyholder is not located, the
5-15 amount of the refund shall be retained in the surplus of the fund.
5-16 (g) The commissioner shall adopt rules as necessary to
5-17 implement this section.
5-18 Sec. 10B. REIMBURSEMENT OF MAINTENANCE TAX SURCHARGE BY
5-19 FUND. The fund shall provide refunds to policyholders of the fund
5-20 who paid a proportionate share of the amount of maintenance tax
5-21 surcharge paid voluntarily by the fund for calendar years
5-22 1994-1995. The fund shall compute the refund owed to an affected
5-23 policyholder using a procedure analogous to that provided for
5-24 insurance companies under Section 10A of this article.
5-25 SECTION 4. Subchapter G, Chapter 5, Insurance Code, is
5-26 amended by adding Article 5.76-6 to read as follows:
5-27 Art. 5.76-6. INTERIM STUDIES. (a) The Texas Workers'
6-1 Compensation Insurance Fund shall enter into a joint venture with
6-2 the Research and Oversight Council on Workers' Compensation by
6-3 providing data for interim studies as provided by this article.
6-4 Funding shall come from the surplus of the Texas Workers'
6-5 Compensation Insurance Fund for the interim studies to improve
6-6 worker safety in this state and the cost and quality of health care
6-7 delivered to injured workers.
6-8 (b) The studies shall include examinations of:
6-9 (1) methods to improve worker safety and facilitate
6-10 return to productive employment following an injury;
6-11 (2) the quality and cost-effectiveness of the current
6-12 workers' compensation health care delivery system, as compared to:
6-13 (A) other health care delivery systems used in
6-14 this state; and
6-15 (B) workers' compensation health care delivery
6-16 systems used in other states; and
6-17 (3) medical provider treatment patterns and insurance
6-18 carrier utilization review practices in the workers' compensation
6-19 system of this state.
6-20 (c) The council shall submit requests for proposals for
6-21 contracts with private vendors to perform the studies required
6-22 under this article. The comptroller shall assist the council in
6-23 bidding, evaluating, and securing the contracts.
6-24 (d) The Texas Workers' Compensation Commission shall assist
6-25 the council by providing, on request by the council, computer data
6-26 and other information as necessary to conduct the studies.
6-27 (e) The council may enter into contracts, memoranda of
7-1 understanding, and interagency agreements as necessary to implement
7-2 this article.
7-3 (f) The council shall report the results of the interim
7-4 studies and recommendations for proposed legislation to the 77th
7-5 Legislature not later than February 1, 2001. The council shall
7-6 provide written copies of the report to the governor, the
7-7 lieutenant governor, and the speaker of the house of
7-8 representatives.
7-9 (g) This article expires March 1, 2001.
7-10 SECTION 5. Section 3, Article 21.28-C, Insurance Code, is
7-11 amended to read as follows:
7-12 Sec. 3. SCOPE. (a) This Act applies to all kinds of direct
7-13 insurance, and except as provided in Section 12 of this Act, is not
7-14 applicable to the following:
7-15 (1) life, annuity, health, or disability insurance;
7-16 (2) mortgage guaranty, financial guaranty, or other
7-17 forms of insurance offering protection against investment risks;
7-18 (3) fidelity or surety bonds, or any other bonding
7-19 obligations;
7-20 (4) credit insurance, vendors' single-interest
7-21 insurance, collateral protection insurance, or any similar
7-22 insurance protecting the interests of a creditor arising out of a
7-23 creditor-debtor transaction;
7-24 (5) insurance of warranties or service contracts;
7-25 (6) title insurance;
7-26 (7) ocean marine insurance;
7-27 (8) any transaction or combination of transactions
8-1 between a person, including an affiliate of such a person, and an
8-2 insurer, including an affiliate of such an insurer, that involves
8-3 the transfer of investment or credit risk unaccompanied by the
8-4 transfer of insurance risk; or
8-5 (9) any insurance provided by or guaranteed by
8-6 government.
8-7 (b) This Act applies to insurance written through the Texas
8-8 Workers' Compensation Insurance Fund.
8-9 SECTION 6. Section 12(c), Article 5.76-3, Insurance Code, as
8-10 amended by this Act, applies only to assessments made by the Texas
8-11 Property and Casualty Insurance Guaranty Association beginning on
8-12 January 1, 2000. The Texas Workers' Compensation Insurance Fund is
8-13 not liable for any assessment or part of an assessment made by the
8-14 Texas Property and Casualty Insurance Guaranty Association before
8-15 that date.
8-16 SECTION 7. The importance of this legislation and the
8-17 crowded condition of the calendars in both houses create an
8-18 emergency and an imperative public necessity that the
8-19 constitutional rule requiring bills to be read on three several
8-20 days in each house be suspended, and this rule is hereby suspended,
8-21 and that this Act take effect and be in force from and after its
8-22 passage, and it is so enacted.