By Brimer H.B. No. 1325
77R2413 MXM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to abolishing the independent office of public insurance
1-3 counsel and transferring the powers and duties of the office to the
1-4 Texas Department of Insurance; abolishing the assessment for the
1-5 office of public insurance counsel.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. Article 1.35A, Insurance Code, is amended to read
1-8 as follows:
1-9 Art. 1.35A. DEPARTMENT DUTIES REGARDING INTERESTS OF
1-10 INSURANCE CONSUMERS [OFFICE OF PUBLIC INSURANCE COUNSEL]
1-11 Sec. 1. [CREATION;] PURPOSE. In addition to its other
1-12 duties, the department shall [The independent office of public
1-13 insurance counsel is created to] represent the interests of
1-14 insurance consumers in Texas.
1-15 Sec. 2. [APPOINTMENT, QUALIFICATIONS, AND REMOVAL OF PUBLIC
1-16 COUNSEL. (a) The governor with the advice and consent of the
1-17 senate shall appoint a public counsel who shall serve as the
1-18 executive director of the office of public insurance counsel.]
1-19 [(b) To be eligible to serve as public counsel for the
1-20 office of public insurance counsel, a person must be a resident of
1-21 Texas and be licensed to practice law in Texas. The public counsel
1-22 shall be a person who has demonstrated a strong commitment and
1-23 involvement in efforts to safeguard the rights of the public and
1-24 who possesses the knowledge and experience necessary to practice
2-1 effectively in insurance proceedings.]
2-2 [(c) A person is not eligible for appointment as public
2-3 counsel if the person or the person's spouse:]
2-4 [(1) is employed by or participates in the management
2-5 of a business entity or other organization regulated by the
2-6 department or receiving funds from the department;]
2-7 [(2) owns or controls, directly or indirectly, more
2-8 than a 10 percent interest in a business entity or other
2-9 organization regulated by the department or receiving funds from
2-10 the department or the office of public insurance counsel; or]
2-11 [(3) uses or receives a substantial amount of tangible
2-12 goods, services, or funds from the department or the office of
2-13 public insurance counsel, other than compensation or reimbursement
2-14 authorized by law for department or office of public insurance
2-15 counsel membership, attendance, or expenses.]
2-16 [(d) Appointment of the public counsel shall be made without
2-17 regard to the race, color, handicap, sex, religion, age, or
2-18 national origin of the appointee.]
2-19 [(e) The public counsel shall serve for a term of two years
2-20 expiring on February 1 of each odd-numbered year.]
2-21 [(f) It is a ground for removal from office if the public
2-22 counsel:]
2-23 [(1) does not have at the time of appointment the
2-24 qualifications required by Subsection (b) of this section;]
2-25 [(2) does not maintain during service as public
2-26 counsel the qualifications required by Subsection (b) of this
2-27 section;]
3-1 [(3) violates a prohibition established by Subsection
3-2 (c) of this section or Section 4 of this article; or]
3-3 [(4) cannot discharge the public counsel's duties for
3-4 a substantial part of the term for which the public counsel is
3-5 appointed because of illness or disability.]
3-6 [(g) The validity of an action of the office of public
3-7 insurance counsel is not affected by the fact that it is taken when
3-8 a ground for removal of the public counsel exists.]
3-9 [Sec. 3.] ADMINISTRATION. [(a)] The department [public
3-10 counsel, as executive director of the office of public insurance
3-11 counsel,] shall be charged with the responsibility of
3-12 administering, enforcing, and carrying out the provisions of this
3-13 article[, including preparation and submission to the legislature
3-14 of a budget for the office, employing all necessary professional,
3-15 technical, and other employees to carry out the provisions of this
3-16 article, approval of expenditures for professional services,
3-17 travel, per diem, and other actual and necessary expenses incurred
3-18 in administering the office. Expenses for the office shall be paid
3-19 from the assessment imposed in Article 1.35B of this chapter. The
3-20 compensation for employees of the office of public insurance
3-21 counsel shall be fixed by the legislature as provided by the
3-22 General Appropriations Act].
3-23 [(b) The office of public insurance counsel shall file
3-24 annually with the governor and the presiding officer of each house
3-25 of the legislature a complete and detailed written report
3-26 accounting for all funds received and disbursed by the office of
3-27 public insurance counsel during the preceding fiscal year. The
4-1 annual report must be in the form and reported in the time provided
4-2 by the General Appropriations Act.]
4-3 [(c) All money paid to the office of public insurance
4-4 counsel under this article shall be deposited in the state
4-5 treasury.]
4-6 [(d) The public counsel or the public counsel's designee
4-7 shall prepare and maintain a written policy statement to ensure
4-8 implementation of a program of equal employment opportunity under
4-9 which all personnel transactions are made without regard to race,
4-10 color, disability, sex, religion, age, or national origin. The
4-11 policy statement must include:]
4-12 [(1) personnel policies, including policies relating
4-13 to recruitment, evaluation, selection, appointment, training, and
4-14 promotion of personnel that are in compliance with the Texas
4-15 Commission on Human Rights Act (Article 5221k, Vernon's Texas Civil
4-16 Statutes) and its subsequent amendments;]
4-17 [(2) a comprehensive analysis of the office of public
4-18 insurance counsel work force that meets federal and state
4-19 guidelines;]
4-20 [(3) procedures by which a determination can be made
4-21 of significant underuse in the office of public insurance counsel
4-22 work force of all persons for whom federal or state guidelines
4-23 encourage a more equitable balance; and]
4-24 [(4) reasonable methods to appropriately address those
4-25 areas of significant underuse.]
4-26 [(e) A policy statement prepared under Subsection (d) of
4-27 this section must cover an annual period, be updated at least
5-1 annually and reviewed by the Commission on Human Rights for
5-2 compliance with Subsection (d)(1) of this section, and be filed
5-3 with the governor's office.]
5-4 [(f) The governor's office shall deliver a biennial report
5-5 to the legislature based on the information received under
5-6 Subsection (e) of this section. The report may be made separately
5-7 or as a part of other biennial reports made to the legislature.]
5-8 [(g) The public counsel or the public counsel's designee
5-9 shall develop an intra-agency career ladder program. The program
5-10 shall require intra-agency posting of all nonentry level positions
5-11 concurrently with any public posting.]
5-12 [(h) The public counsel or the public counsel's designee
5-13 shall develop a system of annual performance evaluations. All
5-14 merit pay for office of public insurance counsel employees must be
5-15 based on the system established under this subsection.]
5-16 [(i) The office of public insurance counsel shall provide to
5-17 its public counsel and employees, as often as necessary,
5-18 information regarding their qualification for office or employment
5-19 under this article and their responsibilities under applicable laws
5-20 relating to standards of conduct for state officers or employees.]
5-21 [Sec. 4. CONFLICT OF INTEREST. (a) A person may not serve
5-22 as the public counsel or act as the general counsel for the office
5-23 of public insurance counsel if the person is required to register
5-24 as a lobbyist under Chapter 305, Government Code, because of the
5-25 person's activities for compensation related to the operation of
5-26 the department or the office of public insurance counsel.]
5-27 [(b) A person serving as the public counsel may not, for a
6-1 period of two years after the date the person ceases to be public
6-2 counsel, represent any person in a proceeding before the board or
6-3 receive compensation for services rendered on behalf of any person
6-4 regarding a case pending before the rate board, commissioner, or
6-5 department.]
6-6 [(c) An officer, employee, or paid consultant of a trade
6-7 association in the field of insurance may not serve as the public
6-8 counsel or be an employee of the office of public insurance counsel
6-9 who is exempt from the state's position classification plan or is
6-10 compensated at or above the amount prescribed by the General
6-11 Appropriations Act for step 1, salary group 17, of the position
6-12 classification salary schedule.]
6-13 [(d) A person who is the spouse of an officer, manager, or
6-14 paid consultant of a trade association in the field of insurance
6-15 may not serve as the public counsel and may not be an office of
6-16 public insurance counsel employee who is exempt from the state's
6-17 position classification plan or is compensated at or above the
6-18 amount prescribed by the General Appropriations Act for step 1,
6-19 salary group 17, of the position classification salary schedule.]
6-20 [(e) For purposes of this section, a trade association is a
6-21 nonprofit, cooperative, and voluntarily joined association of
6-22 business or professional competitors designed to assist its members
6-23 and its industry or profession in dealing with mutual business or
6-24 professional problems and in promoting their common interest.]
6-25 Sec. 3 [5]. POWERS AND DUTIES. (a) The department [office
6-26 of public insurance counsel] may assess the impact of insurance
6-27 rates, rules, and forms on insurance consumers in Texas and, in its
7-1 own name, shall act as an advocate of positions that are most
7-2 advantageous to a substantial number of insurance consumers as
7-3 determined by the department [public counsel for the office].
7-4 (b) The department [public counsel]:
7-5 (1) may appear or intervene as a matter of right
7-6 before the commissioner or a hearings officer [department] as a
7-7 party or otherwise on behalf of insurance consumers as a class in:
7-8 (A) matters involving rates, rules, and forms
7-9 affecting property and casualty insurance;
7-10 (B) matters involving rates, rules, and forms
7-11 affecting title insurance;
7-12 (C) matters involving rules affecting life,
7-13 health, and accident insurance;
7-14 (D) matters involving rates, rules, and forms
7-15 affecting credit life, and credit accident and health insurance;
7-16 (E) matters involving rates, rules, and forms
7-17 affecting all other lines of insurance for which the commissioner
7-18 or department promulgates, sets, or approves rates, rules, and/or
7-19 forms; and
7-20 (F) matters involving withdrawal of approval of
7-21 policy forms in proceedings initiated by the department under
7-22 Article 3.42 [Articles 3.42(f) and 3.42(g)] of this code [or if the
7-23 public counsel presents persuasive evidence to the department that
7-24 such forms do not comply with such articles of this code or any
7-25 valid rule relating thereto duly adopted by the commissioner or are
7-26 otherwise contrary to law];
7-27 (2) may initiate or intervene as a matter of right or
8-1 otherwise appear in a judicial proceeding involving or arising out
8-2 of any action taken by an administrative agency in a proceeding in
8-3 which the department [public counsel] previously appeared under the
8-4 authority granted by this article;
8-5 (3) [is entitled to access to any records of the
8-6 department that are available to any party other than the
8-7 department staff in a proceeding before the commissioner or
8-8 department under the authority granted public counsel by this
8-9 article;]
8-10 [(4)] is entitled to obtain discovery under Chapter
8-11 2001, Government Code, [the Administrative Procedure and Texas
8-12 Register Act (Article 6252-13a, Vernon's Texas Civil Statutes)] of
8-13 any nonprivileged matter that is relevant to the subject matter
8-14 involved in a proceeding or submission before the commissioner or
8-15 department as authorized by this article;
8-16 (4) [(5)] may recommend legislation to the legislature
8-17 that, in the judgment of the department [public counsel], would
8-18 affect positively the interests of insurance consumers;
8-19 (5) [(6)] may appear or intervene as a matter of right
8-20 as a party or otherwise on behalf of insurance consumers as a class
8-21 in all proceedings in which the department [public counsel]
8-22 determines that insurance consumers need representation, except
8-23 that the department [public counsel] may not intervene in any
8-24 enforcement or parens patriae proceeding brought by the attorney
8-25 general;
8-26 (6) [(7)] may appear or intervene [before the
8-27 commissioner or department as a party or otherwise] on behalf of
9-1 small commercial insurance consumers, as a class, in matters
9-2 involving rates, rules, and forms affecting commercial insurance
9-3 consumers, as a class, in all proceedings where it is deemed by the
9-4 department [counsel] that small commercial consumers are in need of
9-5 representation; and
9-6 (7) [(8)] shall adopt [submit to the department for
9-7 adoption] a consumer bill of rights appropriate to each personal
9-8 line of insurance regulated by the department to be distributed
9-9 upon the issuance of a policy by insurers to each policyholder
9-10 under rules adopted by the department.
9-11 (c) [The public counsel may not intervene or appear in any
9-12 proceedings or hearings before the commissioner or department, or
9-13 other proceedings, that relate to approval or consideration of
9-14 individual charters, licenses, acquisitions, mergers, examinations,
9-15 proceedings concerning the solvency of individual insurers,
9-16 financial issues, policy forms, advertising, or other regulatory
9-17 issues affecting individual insurers or agents. The confidentiality
9-18 requirements applicable to examination reports under Article 1.18
9-19 of this code and to the commissioner under Section 3A, Article
9-20 21.28, of this code shall apply to the public counsel.]
9-21 [(d)] Any order of the commissioner which determines,
9-22 approves, or sets a rate under this code and is appealed shall be
9-23 and remain in effect during the pendency of an appeal. During the
9-24 pendency of the appeal, an insurer shall use the rate provided in
9-25 the order being appealed. Such rate shall be lawful and valid
9-26 during such appeal, and an insurer shall not be required to make
9-27 any refund therefrom after a decision on the appeal. If a decision
10-1 on appeal shall vacate the order, the rate established by the
10-2 commissioner prior to the rendition of the vacated order shall be
10-3 in effect from and after the date of remand and until the
10-4 commissioner shall make a further determination; however, the
10-5 commissioner shall consider the order of the court in setting
10-6 future rates.
10-7 (d) [(e)] The department [office of public insurance
10-8 counsel] shall develop and implement a system to compare and
10-9 evaluate, on an objective basis, the quality of care provided by
10-10 and the performance of health maintenance organizations that are
10-11 established under the Texas Health Maintenance Organization Act
10-12 (Chapter 20A, Vernon's Texas Insurance Code).
10-13 (1) In developing the system under this subsection,
10-14 the department [office of public insurance counsel] may use
10-15 information or data from any person, agency, organization, or
10-16 governmental unit that the office deems reliable.
10-17 (2) The department [office of public insurance
10-18 counsel] shall develop and issue annually consumer report cards
10-19 that identify and compare, on an objective basis, health
10-20 maintenance organizations in this state. The consumer report card
10-21 may be based on information or data from any person, agency,
10-22 organization, or governmental unit that the office deems reliable.
10-23 (3) The [department and the] health care information
10-24 council shall provide information or data as requested by the
10-25 department [office of public insurance counsel] in furtherance of
10-26 these duties.
10-27 (4) The department [office of public insurance
11-1 counsel] shall use the information collected or received under this
11-2 subsection for the benefit of the public. Except as provided by
11-3 this subsection, the information is subject to the open records
11-4 law, Chapter 552, Government Code, and the department [office of
11-5 public insurance counsel] shall make determinations on requests for
11-6 information in favor of access.
11-7 (5) The department may use, for the purposes of this
11-8 article, [office of public insurance counsel is entitled to]
11-9 information that is confidential under any law of this state,
11-10 including Section 27, Texas Health Maintenance Organization Act
11-11 (Article 20A.27, Vernon's Texas Insurance Code), Chapter 108,
11-12 Health and Safety Code, and the open records law, Chapter 552,
11-13 Government Code.
11-14 (6) The department [office of public insurance
11-15 counsel] may not make public confidential information provided to
11-16 or used by the department [office] under this subsection but may
11-17 disclose a summary of the information that does not directly or
11-18 indirectly identify the health maintenance organization that is the
11-19 subject of the information. The department [office of public
11-20 insurance counsel] may not release, and a person or entity may not
11-21 gain access to, any information that:
11-22 (A) could reasonably be expected to reveal the
11-23 identity of a patient or physician or that reveals the zip code of
11-24 a patient's primary residence;
11-25 (B) discloses provider discounts or
11-26 differentials between payments and billed charges; or
11-27 (C) relates to actual payments to an identified
12-1 provider made by a payer.
12-2 (7) Information collected or used by the department
12-3 [office of public insurance counsel] under this subsection is
12-4 subject to the confidentiality provisions and criminal penalties
12-5 of:
12-6 (A) Section 81.103, Health and Safety Code;
12-7 (B) Section 311.037, Health and Safety Code; and
12-8 (C) Chapter 159, Occupations Code [Section 5.08,
12-9 Medical Practice Act (Article 4495b, Vernon's Texas Civil
12-10 Statutes)].
12-11 (8) Information that is in the possession of the
12-12 department [office of public insurance counsel] and that relates to
12-13 patients and physicians and any compilation, report, or analysis
12-14 produced from the information that identifies patients and
12-15 physicians is not:
12-16 (A) subject to discovery, subpoena, or other
12-17 means of legal compulsion for release to any person or entity; or
12-18 (B) admissible in any civil, administrative, or
12-19 criminal proceeding.
12-20 (9) Notwithstanding Subdivision (6)(A) of this
12-21 subsection, the department [office of public insurance counsel] may
12-22 use zip code information to analyze information on a geographic
12-23 basis.
12-24 (10) The department [office of public insurance
12-25 counsel] may not endorse or recommend a specific health maintenance
12-26 organization or plan, or subjectively rate or rank such
12-27 organizations or plans, other than through comparison and
13-1 evaluation of objective criteria.
13-2 (11) The department [office of public insurance
13-3 counsel] shall provide a copy of the consumer report to any person
13-4 on request on payment of a reasonable fee.
13-5 [Sec. 6. PUBLIC ACCESS AND INFORMATION. (a) The office of
13-6 public insurance counsel shall prepare information of public
13-7 interest describing the functions of the office. The office of
13-8 public insurance counsel shall make the information available to
13-9 the public and appropriate state agencies.]
13-10 [(b) The office of public insurance counsel shall prepare
13-11 and maintain a written plan that describes how a person who does
13-12 not speak English can be provided reasonable access to the office
13-13 of public insurance counsel's programs. The office of public
13-14 insurance counsel shall also comply with federal and state laws for
13-15 program and facility accessibility.]
13-16 [Sec. 7. APPLICABILITY OF SUNSET ACT. The office of public
13-17 insurance counsel is subject to Chapter 325, Government Code (Texas
13-18 Sunset Act). Unless continued in existence as provided by that
13-19 chapter, the office is abolished September 1, 2005.]
13-20 SECTION 2. Article 1.35B, Insurance Code, is repealed.
13-21 SECTION 3. The office of public insurance counsel is
13-22 abolished effective December 1, 2001.
13-23 SECTION 4. On December 1, 2001:
13-24 (1) all functions and activities assigned to or
13-25 performed by the office of public insurance counsel immediately
13-26 before that date are transferred to the Texas Department of
13-27 Insurance;
14-1 (2) all employees of the office of public insurance
14-2 counsel become employees of the Texas Department of Insurance;
14-3 (3) a rule or form adopted by the office of public
14-4 insurance counsel is a rule or form of the Texas Department of
14-5 Insurance and remains in effect until altered by the commissioner
14-6 of insurance;
14-7 (4) a reference in law or an administrative rule to
14-8 the office of public insurance counsel means the Texas Department
14-9 of Insurance, and a reference in law or an administrative rule to
14-10 the public counsel of the office of public insurance counsel means
14-11 the commissioner of insurance;
14-12 (5) a complaint, investigation, or other proceeding
14-13 before the office of public insurance counsel is transferred
14-14 without change in status to the Texas Department of Insurance, and
14-15 the Texas Department of Insurance assumes, without a change in
14-16 status, the position of the office of public insurance counsel in
14-17 an action or proceeding to which the office of public insurance
14-18 counsel is a party;
14-19 (6) all money, contracts, leases, rights, and
14-20 obligations of the office of public insurance counsel are
14-21 transferred to the Texas Department of Insurance;
14-22 (7) all property, including records, in the custody of
14-23 the office of public insurance counsel is transferred to the Texas
14-24 Department of Insurance; and
14-25 (8) all funds appropriated by the legislature for the
14-26 office of public insurance counsel are transferred to the Texas
14-27 Department of Insurance.
15-1 SECTION 5. Before December 1, 2001, the office of public
15-2 insurance counsel may agree with the Texas Department of Insurance
15-3 to transfer any employees or property, including records, of the
15-4 office of public insurance counsel to the department in preparation
15-5 for the transfer under Section 4 of this Act.
15-6 SECTION 6. The abolishment of the office of public insurance
15-7 counsel does not affect the validity of a right, privilege, or
15-8 obligation accrued, a contract or acquisition made, a liability
15-9 incurred, a rule adopted, a proceeding, investigation, or remedy
15-10 begun, a decision made, or other action taken in connection with
15-11 the office of public insurance counsel.
15-12 SECTION 7. The change in law made by this Act does not affect
15-13 liability for an assessment under Article 1.35B, Insurance Code,
15-14 accruing before the effective date of this Act. That liability
15-15 continues in effect as if this Act had not been enacted, and the
15-16 former law is continued in effect for the collection of the
15-17 assessments due and for civil and criminal enforcement of the
15-18 liability for those assessments.
15-19 SECTION 8. (a) Except as provided by Subsection (b) of this
15-20 section, this Act takes effect September 1, 2001.
15-21 (b) Section 1 of this Act takes effect December 1, 2001.