This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
78R6761 AJA-D
By: Coleman H.B. No. 3409
A BILL TO BE ENTITLED
AN ACT
relating to the withdrawal of an insurer from writing professional
liability insurance for physicians and health care providers in
this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article 5.15-1, Insurance Code, is amended by
adding Section 13 to read as follows:
Sec. 13. WITHDRAWAL PLAN. (a) In this section:
(1) "Affiliate" means an entity classified as an
affiliate of an insurer under Section 823.003 of this code.
(2) "Insurer" means any licensed insurer or other
entity writing professional liability insurance for physicians and
health care providers in this state, including a reciprocal or
interinsurance exchange, a Lloyd's plan, or any other legal entity
engaged in the business of writing professional liability insurance
for physicians and health care providers.
(b) This section does not apply to a transfer of business
from an insurer to a company that:
(1) is under common ownership with the insurer;
(2) is authorized to engage in the business of
insurance in this state; and
(3) is not a reciprocal or interinsurance exchange or
a Lloyd's plan.
(c) An insurer shall file with the commissioner a plan for
orderly withdrawal if the insurer proposes to:
(1) withdraw from writing professional liability
insurance for physicians and health care providers in this state or
reduce the insurer's total annual premium volume for that insurance
by 50 percent or more; or
(2) reduce, in an identified geographic region of this
state, the insurer's total annual premium volume for that insurance
by 50 percent or more.
(d) A withdrawal plan filed under this section must:
(1) be constructed to protect the interests of the
people of this state;
(2) indicate the dates on which the insurer intends to
begin and to complete the plan; and
(3) provide for:
(A) meeting the insurer's contractual
obligations;
(B) providing service to the insurer's
policyholders and claimants in this state; and
(C) meeting any applicable statutory
obligations, such as payment of assessments to the guaranty fund
and participation in an assigned risk plan or joint underwriting
arrangement.
(e) The commissioner shall approve a withdrawal plan that
adequately provides for meeting the requirements prescribed by
Subsection (d)(3) of this section. A withdrawal plan is considered
approved if the commissioner:
(1) does not hold a hearing on the plan before the 31st
day after the date the plan is filed with the commissioner; or
(2) does not deny approval before the 31st day after
the date a hearing on the plan is held.
(f) When an insurer withdraws from writing professional
liability insurance for physicians and health care providers in
this state, the insurer and its affiliates may not, without the
approval of the commissioner, write any line of insurance in this
state before the fifth anniversary of the date of withdrawal.
(g) The commissioner may impose civil penalties under
Chapter 82 of this code on an insurer that fails to comply with any
requirement of this section.
(h) Before an insurer may restrict writing new professional
liability insurance for physicians or health care providers in this
state or an identified geographic region of this state, the insurer
must file a proposed restriction plan with the commissioner for the
commissioner's approval. The commissioner's approval of a
restriction plan filed under this subsection is required. An
insurer that files a restriction plan may not institute the plan
until on or after the 15th day after the date the plan is approved by
the commissioner. The commissioner may not approve a restriction
plan unless the commissioner determines that the plan will not have
an adverse impact on the affordability and availability of
professional liability insurance for physicians and health care
providers in this state.
(i) Under this section, the commissioner may require the
deposit of securities in this state in trust in the name of the
commissioner if the commissioner determines, after notice and
hearing, that there is reasonable cause to conclude that the
interests of the people of this state are best served by the
deposit.
(j) The commissioner may impose a moratorium of not longer
than two years on the approval of withdrawal or restriction plans.
The commissioner may annually renew a moratorium imposed under this
subsection. To impose or renew a moratorium under this subsection,
the commissioner must determine, after notice and hearing, that
professional liability insurance for physicians and health care
providers is not reasonably expected to be available to a
substantial number of policyholders or potential policyholders in
this state or an identified geographic region of this state and that
the lack of availability of that insurance would result in
significant reduction in the availability of medical and health
care in this state or that region. The commissioner may limit a
moratorium on withdrawal from writing professional liability
insurance for physicians and health care providers to identified
geographic regions of this state.
(k) The provisions of Chapter 2001, Government Code,
relating to contested cases apply to the notice and hearing
required under Subsection (j) of this section. The commissioner by
rule shall establish reasonable criteria for applying the standards
for determining whether to impose a moratorium under Subsection (j)
of this section.
(l) The commissioner shall adopt rules as necessary to
enforce this section.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.