SRC-JEC S.B. 415 77(R)BILL ANALYSIS


Senate Research CenterS.B. 415
By: Carona
Health & Human Services
6/25/2001
Enrolled


DIGEST AND PURPOSE 

Currently, any Texas health care provider may participate in the Texas
Medical Liability Insurance Underwriting Association.  S.B. 415 includes
for-profit nursing homes in the list of health care providers, thereby
allowing a for-profit nursing home to participate.  It also ensures that if
in any fiscal year the losses and expenses from a single health care
provider result in a net underwriting loss and exceed a certain percentage
of the stabilization reserve fund, the commissioner of insurance may direct
the initiation or continuation of the charge for physicians or that
category of health care provider until the fund recovers the relevant
amount. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of insurance,
the commissioner's deputies, or the State Board of Insurance, as
appropriate, in SECTION 2 (Section 3A, Article 21.493, Insurance Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2(6), Article 21.49-3, Insurance Code, to
redefine "health care provider." 

SECTION 2.  Amends Section 3A, Article 21.49-3, Insurance Code, by adding
Subsection (c), as follows: 

(c) Requires the commissioner of insurance, the commissioner's deputies, or
the State Board of Insurance, as appropriate (commissioner), by rule to
adopt minimum rating standards for forprofit nursing homes that must be met
before a for-profit nursing home may obtain coverage through the
association.  Requires the standards to promote the highest practical level
of care for residents of those nursing homes. 

SECTION 3.  Amends Section 4(b)(1), Article 21.49-3, Insurance Code, to
authorize the commissioner of insurance, the commissioner's deputies, or
the State Board of Insurance, as appropriate (commissioner), rather than
the State Board of Insurance of the State of Texas, to require that certain
information be considered in the subjection of certain matters to Chapter
5B.  Provides that for purposes of this article, rates, rating plans,
rating rules, rating classifications, territories, and policy forms for
for-profit nursing homes are subject to the requirements of Article 5.15-1
of this code to the same extent as not-for-profit nursing homes. 

SECTION 4.  Amends Section 4, Article 21.49-3, Insurance Code, by adding
Subsection (d), as follows: 

(d) Prohibits a policy of medical liability insurance issued to or renewed
for a physician or health care provider by the association under this
article from including coverage for punitive damages assessed against the
physician or health care provider. 

SECTION 5.  Amends Section 4A, Article 21.49-3, Insurance Code, as follows:
 
(d)  Requires that collections of the stabilization reserve fund charge
continue only until such time as the net balance of the fund reaches a
certain sum, except as provided by Subsection (e) of this section. 

(e) Authorizes the commissioner by order, if in any fiscal year the
incurred losses and defense and cost-containment expenses from physicians
or any single category of health care provider result in a net underwriting
loss and exceed 25 percent of the stabilization reserve fund, as valued for
that year, to direct the initiation or continuation of the stabilization
reserve fund charge for physicians or that category of health care provider
until the fund recovers the amount by which those losses and
cost-containment expenses exceed 25 percent of the fund. 

Makes conforming changes.

SECTION 6.  Makes application of Sections 2, 3A, and 4, Article 21.49-3,
Insurance Code, as amended by this Act, prospective to January 1, 2002.   

SECTION 7.  Effective date:  September 1, 2001.