By Wise H.B. No. 3529
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of self-insurance trusts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Art. 21.49-4, Subsections (e)-(j), Insurance Code,
1-5 is amended to read as follows:
1-6 (e) The trust is [not] engaged in the business of insurance
1-7 under this code. [and other] Other laws of this state and the
1-8 provisions of any chapters or sections of this code are declared
1-9 inapplicable to a trust organized and operated under this article
1-10 unless it is specifically so provided in such other law that same
1-11 shall be applicable. The commissioner[, provided that the State
1-12 Board of Insurance] may require any trust created under this
1-13 article to satisfy reasonable minimum requirements to insure the
1-14 capability of the trust to satisfy its contractual obligations.
1-15 (f) On request, the trust shall furnish such books, records
1-16 and documents as are required by the commissioner [State Board of
1-17 Insurance] to fulfill its obligations under Subsection (e) of this
1-18 article relating to the solvency of the trust.
1-19 (g) The trust shall file[, for informational purposes only,]
1-20 all rates, [and forms with the State Board of Insurance]
1-21 supplemental rating information, and policy forms and endorsements
1-22 with the commissioner. These rates, supplemental rating
1-23 information, and policy forms and endorsements are subject to the
2-1 provisions of Article 5.15-1 of this code.
2-2 (h) The trust shall file with the commissioner [State Board
2-3 of Insurance] all liability claims reports which are required
2-4 pursuant to Subchapter D, Chapter 38 [Articles 1.24A and 1.24B],
2-5 Insurance Code.
2-6 (i) If the trust is found to be in violation of or to have
2-7 failed to comply with any provision of this code or any duly
2-8 promulgated rule or regulation of the department [State Board of
2-9 Insurance] which is declared applicable to a trust organized and
2-10 operated under this article, the commissioner [State Board of
2-11 Insurance], pursuant to Subchapter B, Chapter 82 [Section 7,
2-12 Article 1.10], Insurance Code, may order sanctions for such
2-13 violation.
2-14 (j) The trust shall file its independently audited annual
2-15 financial statement with the department [State Board of Insurance];
2-16 this audit shall not be considered an examination document.
2-17 SECTION 2. Art. 5.15-1, Section 1, Insurance Code, is
2-18 amended to read as follows:
2-19 Sec. 1. This article shall apply to the making and use of
2-20 insurance rates by every insurer licensed to write or engaged in
2-21 writing professional liability insurance for any physician or any
2-22 health care provider including rating organizations, acting on
2-23 behalf of insurers. This article shall also apply to
2-24 self-insurance trusts organized and operated under Article 21.49-4,
2-25 Insurance Code.
2-26 SECTION 3. Article 21.21, Section 2(a), Insurance Code, is
3-1 amended to read as follows:
3-2 Sec. 2. When used in this Article:
3-3 (a) "Person" shall mean any individual, corporation,
3-4 association, partnership, reciprocal exchange, inter-insurer,
3-5 Lloyds insurer, fraternal benefit society, self-insurance trust
3-6 organized and operated under Article 21.49-4, Insurance Code, and
3-7 other legal entity engaged in the business of insurance, including
3-8 agents, brokers, adjusters and life insurance counselors.
3-9 SECTION 4. Article 21.21-2, Section 2(a), Insurance Code, is
3-10 amended to read as follows:
3-11 Sec. 2. (a) No insurer doing business in this state under
3-12 the authority, rules and regulations of this code shall engage in
3-13 unfair claim settlement practices. For the purposes of this
3-14 article, "insurer" includes a self-insurance trust organized and
3-15 operated under Article 21.49-4, Insurance Code.
3-16 SECTION 5. Article 21.21-6, Section 2, Insurance Code, is
3-17 amended to read as follows:
3-18 Sec. 2. This article shall apply to any legal entity engaged
3-19 in the business of insurance in this state, including:
3-20 (a) a capital stock company;
3-21 (b) a mutual company;
3-22 (c) a title insurance company;
3-23 (d) a fraternal benefit society;
3-24 (e) a local mutual aid association;
3-25 (f) a statewide mutual assessment company;
3-26 (g) a county mutual insurance company;
4-1 (h) a Lloyd's plan company;
4-2 (i) a reciprocal or interinsurance exchange;
4-3 (j) a stipulated premium insurance company;
4-4 (k) a group hospital service company;
4-5 (l) a health maintenance organization;
4-6 (m) a farm mutual insurance company;
4-7 (n) a risk retention group;
4-8 (o) a surplus lines carrier; [and]
4-9 (p) a self-insurance trust organized and operated under
4-10 Article 21.49-4, Insurance Code; and
4-11 (q) agents, brokers, adjusters, and life insurance
4-12 counselors.
4-13 SECTION 6. Article 21.21-8, Section 1, Insurance Code, is
4-14 amended to read as follows:
4-15 Sec. 1. Scope. This article shall apply to any person
4-16 engaged in the business of insurance. "Person" shall mean any
4-17 individual, corporation, association, partnership, reciprocal
4-18 exchange, interinsurer, Lloyds insurer, fraternal benefit society,
4-19 county mutual, farm mutual, self-insurance trust organized and
4-20 operated under Article 21.49-4, Insurance Code, and any other legal
4-21 entity engaged in the business of insurance, including agents,
4-22 brokers, adjusters, and life insurance counselors.
4-23 SECTION 7. Section 38.002, (a), Insurance Code, is amended
4-24 to read as follows:
4-25 (a) The department or the office of public insurance counsel
4-26 may obtain a copy of an insurer's underwriting guidelines. For the
5-1 purposes of this section, "insurer" includes a self-insurance trust
5-2 organized and operated under Article 21.49-4, Insurance Code.
5-3 SECTION 8. This Act applies only to policies delivered,
5-4 issued for delivery, or renewed on or after January 1, 2002.
5-5 SECTION 9. This Act takes effect September 1, 2001.