1-1     By:  Averitt, Kitchen, et al.                          H.B. No. 471
 1-2          (Senate Sponsor - Harris)
 1-3           (In the Senate - Received from the House April 27, 2001;
 1-4     April 30, 2001, read first time and referred to Committee on
 1-5     Business and Commerce; May 7, 2001, reported favorably by the
 1-6     following vote:  Yeas 5, Nays 0; May 7, 2001, sent to printer.)
 1-7                            A BILL TO BE ENTITLED
 1-8                                   AN ACT
 1-9     relating to insurance agent commissions paid by small employer
1-10     carriers.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Article 26.73, Insurance Code, is amended by
1-13     adding Subsections (c) and (d) to read as follows:
1-14           (c)  A small employer carrier may not implement, directly or
1-15     indirectly, agent commission schedules that vary the level of agent
1-16     commissions based on the size of the group, or otherwise reduce
1-17     access to small employer health benefit plans.
1-18           (d)  Notwithstanding Subsection (c) of this article, a small
1-19     employer carrier may:
1-20                 (1)  vary agent commission amounts or percentages
1-21     based on group size if the variation in the commission amounts or
1-22     percentages are inversely related to the size of the group;
1-23                 (2)  vary agent commission amounts or percentages based
1-24     on the cumulative premium paid by a single small employer over a
1-25     specific period if the variation in the commission amounts or
1-26     percentages are inversely related to the cumulative premium paid
1-27     during the period; or
1-28                 (3)  pay agent commissions as a percentage of premium
1-29     charged to a small employer if the commission percentage is based
1-30     on all premium paid by the small employer.
1-31           SECTION 2.  Article 26.73, Insurance Code, as amended by this
1-32     Act, applies only to a small employer health benefit plan that is
1-33     delivered or issued for delivery on or after January 1, 2002.  A
1-34     health benefit plan delivered or issued for delivery before January
1-35     1, 2002, is governed by the law as it existed immediately before
1-36     the effective date of this Act, and that law is continued in effect
1-37     for that purpose.
1-38           SECTION 3.  This Act takes effect September 1, 2001.
1-39                                  * * * * *