By Averitt                                             H.B. No. 471
         77R3277 PB-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to insurance agent commissions paid by small employer
 1-3     carriers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Article 26.73, Insurance Code, is amended by
 1-6     adding Subsections (c) and (d) to read as follows:
 1-7           (c)  A small employer carrier may not implement, directly or
 1-8     indirectly, agent commission schedules that vary the level of agent
 1-9     commissions based on the size of the group, or otherwise reduce
1-10     access to small employer health benefit plans.
1-11           (d)  Notwithstanding Subsection (c) of this article, a small
1-12     employer carrier may:
1-13                 (1)  vary agent commission amounts or percentages
1-14     based on group size if the variation in the commission amounts or
1-15     percentages are inversely related to the size of the group;
1-16                 (2)  vary agent commission amounts or percentages based
1-17     on the cumulative premium paid by a single small employer over a
1-18     specific period if the variation in the commission amounts or
1-19     percentages are inversely related to the cumulative premium paid
1-20     during the period; or
1-21                 (3)  pay agent commissions as a percentage of premium
1-22     charged to a small employer if the commission percentage is based
1-23     on all premium paid by the small employer.
1-24           SECTION 2.  Article 26.73, Insurance Code, as amended by this
 2-1     Act, applies only to a small employer health benefit plan that is
 2-2     delivered or issued for delivery on or after January 1, 2002.  A
 2-3     health benefit plan delivered or issued for delivery before January
 2-4     1, 2002, is governed by the law as it existed immediately before
 2-5     the effective date of this Act, and that law is continued in effect
 2-6     for that purpose.
 2-7           SECTION 3.  This Act takes effect September 1, 2001.