By Wilson                                             H.B. No. 2711
         77R9026 DLF-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to financial requirements applicable to certain health
 1-3     maintenance organizations.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. The Texas Health Maintenance Organization Act
 1-6     (Chapter 20A, Vernon's Texas Insurance Code) is amended by adding
 1-7     Section 13D to read as follows:
 1-8           Sec. 13D. FINANCIAL REQUIREMENTS FOR CERTAIN HEALTH
 1-9     MAINTENANCE ORGANIZATIONS. (a)  The commissioner by rule may waive
1-10     all or part of the applicable financial requirements, including the
1-11     minimum net worth required under Sections 13A, 13B, and 13C of this
1-12     Act, for a health maintenance organization that, under contract
1-13     with another health maintenance organization, provides health care
1-14     services to enrollees if, under the contract, the other health
1-15     maintenance organization remains financially responsible for those
1-16     services.
1-17           (b)  In adopting rules under this section, the commissioner
1-18     may consider the factors listed by Sections 13C(a)(1)-(3) of this
1-19     Act.
1-20           (c)  Rules adopted under this section must be designed to
1-21     ensure the financial solvency of health maintenance organizations
1-22     for the protection of enrollees and to ensure that the financial
1-23     requirements imposed on health maintenance organizations are
1-24     reasonable in relation to the risk assumed by the health
 2-1     maintenance organizations.
 2-2           SECTION 2.  This Act takes effect immediately if it receives
 2-3     a vote of two-thirds of all the members elected to each house, as
 2-4     provided by Section 39, Article III, Texas Constitution.  If this
 2-5     Act does not receive the vote necessary for immediate effect, this
 2-6     Act takes effect September 1, 2001.