SRC-MSY S.B. 421 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 421
78R2263 AKH-DBy: Carona
State Affairs
3/12/2003
As Filed


DIGEST AND PURPOSE 

Currently, a number of health care providers, including nursing homes, are
able to acquire liability coverage through the Texas Medical Liability
Insurance Underwriting Association (association).  As proposed, S.B. 421
adds assisted living facilities to those facilities that are able to
obtain such coverage from the association.  In addition, this bill adds
assisted living facilities to those facilities that benefit from a certain
stabilization reserve fund that is funded by bonds issued by the Texas
Public Finance Authority. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2(2), Article 5.15-1, Insurance Code, to
redefine "health care provider" to include a for-profit assisted living
facility or not-for-profit assisted living facility. 

SECTION 2.  Amends  Section 8, Article 5.15-1, Insurance Code, to add an
assisted living facility to those institutions for which, when a policy of
medical professional liability insurance is issued, the commissioner of
insurance (commissioner) may approve a form providing for coverage for
exemplary damages on that policy. 

SECTION 3.  Amends Section 2(6), Article 21.49-3, Insurance Code, to
redefine "health care provider" to include a for-profit or not-for-profit
assisted living facility. 

SECTION 4.  Amends Section 3A(c), Article 21.49-3, Insurance Code, to add
for-profit living facilities to those facilities that must meet standards
set by the commissioner before obtaining coverage through the joint
underwriting association established under this article (association). 

SECTION 5.  Amends Section 3A(c), Article 21.49-3, Insurance Code, by
redesignating it as Subsection (d) and amending it to add an assisted
living facility to those institutions not otherwise eligible for coverage
by the association under this section that may be eligible for coverage
upon demonstrating certain efforts to obtain coverage elsewhere. 

SECTION 6.  Amends Sections 4(b)(1), (3), and (6), Article 21.49-3,
Insurance Code, as follows: 

(b)(1)  Adds for-profit assisted living facilities to those institutions
whose rates, rating plans, rating rules, rating classifications,
territories, and policy forms are subject to the requirements of Article
5.15-1 of this code to the same extent as not-for-profit assisted living
facilities. 

(3)  Adds assisted living facilities to those institutions that are
exempted from the provision that any deficit sustained by the association
with respect to health care providers in any one year shall be recouped by
certain procedures.  Makes conforming changes. 
 
(6)  Adds the rates applicable to professional liability insurance
provided by the association to not-for-profit assisted living facilities
to those rates that must reflect a certain discount as compared with
others in the same category of insureds. 

SECTION 7.  Amends Section 4A, Article 21.49-3, Insurance Code, as follows:

Sec.  4A.  New heading: POLICYHOLDER'S STABILIZATION RESERVE FUND FOR
PHYSICIANS AND CERTAIN HEALTH CARE PROVIDERS.  Adds assisted living
facilities to those health care providers for which a policyholder's
stabilization reserve fund administered under this section does not apply.
Deletes Subsection (e) and (f) pertaining to stabilization reserve fund
charges and funding. Makes conforming changes. 

SECTION 8.  Amends the heading of Section 4B, Article 21.49-3, Insurance
Code, to read as follows: 

Sec.  4B.  New heading: STABILIZATION RESERVE FUND FOR FOR-PROFIT AND
NOT-FOR-PROFIT NURSING HOMES AND ASSISTED LIVING FACILITIES. 

SECTION 9.  Amends Sections 4B(a), (b), (d), (e) , and (h), Article
21.49-3, Insurance Code, to add assisted living facilities to those
institutions which benefit from a stabilization reserve fund administered
under this section and in the operating plan of the association.  Makes
conforming changes. 

SECTION 10.  Amends Section 4C, Article 21.49-3, Insurance Code, by
amending Subsections (a) and (c) to make conforming changes and adding
Subsection (d-1) to make application of this section prospective to
specified dates of policy issuance, coverage commencement, and notice of a
claim. 

SECTION 11.  Amends Section 5(a), Article 21.49-3, Insurance Code, to make
conforming changes. 

SECTION 12.  Amends Section 1, Article 21.49-3d, Insurance Code, to add
assisted living facilities to those institutions for which an issuance of
bonds to provide funds for professional liability insurance through the
association is found by the legislature to be for the benefit of the
public. 

SECTION 13.  Amends Section 3(a), Article 21.49-3d, Insurance Code, to add
assisted living facilities to those institutions whose stabilization
reserve fund the Texas Public Finance Authority must issue revenue bonds
to fund. 

SECTION 14.  Effective date:  September 1, 2003.