By:  Nelson                                                       S.B. No. 339
	(In the Senate - Filed January 31, 2003; February 11, 2003, 
read first time and referred to Committee on State Affairs; 
March 19, 2003, reported favorably by the following vote:  Yeas 9, 
Nays 0; March 19, 2003, sent to printer.)


A BILL TO BE ENTITLED

AN ACT


relating to issuance of certain liability insurance by the Texas 
Medical Liability Insurance Underwriting Association.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subdivision (2), Subsection (a), Section 4, 
Article 21.49-3, Insurance Code, is amended to read as follows:
		(2)  If the association determines that the applicant 
meets the underwriting standards of the association as prescribed 
in the plan of operation and there is no unpaid, uncontested 
premium, policyholder stabilization reserve fund charge, or 
assessment due from the applicant for prior insurance (as shown by 
the insured having failed to pay or make written objection to such 
charges within 30 days after billing) then the association, upon 
receipt of the premium and the policyholder stabilization reserve 
fund charge, or such portion thereof as is prescribed in the plan of 
operation, shall cause to be issued a policy of medical liability 
insurance for a term of one year or less, as determined by the 
association.
	SECTION 2.  Section 4, Article 21.49-3, Insurance Code, is 
amended by adding Subsections (e) and (f) to read as follows:
	(e)  The association may offer an installment payment plan 
for coverage obtained through the association.
	(f)  Section 7, Article 5.15-1 of this code, does not apply 
to a medical liability insurance policy issued by the association 
for a term of less than one year.  With respect to a policy subject 
to this subsection, the association shall ensure that appropriate 
written notice is provided to an insured if premiums are increased 
or the policy is to be canceled or is not to be renewed other than 
for nonpayment of premiums or because the insured is no longer 
licensed.
	SECTION 3.  Subsection (b), Section 4A, Article 21.49-3, 
Insurance Code, is amended to read as follows:
	(b)  Each policyholder shall pay annually into the 
stabilization reserve fund a charge, the amount of which shall be 
established annually by advisory directors chosen by health care 
providers, other than for-profit and not-for-profit nursing homes, 
and physicians eligible for insurance in the association in 
accordance with the plan of operation.  The charge shall be in 
proportion to each premium payment due for liability insurance 
through the association.  Such charge shall be separately stated in 
the policy, but shall not constitute a part of premiums or be 
subject to premium taxation, servicing fees, acquisition costs, or 
any other such charges.  If the association offers an installment 
payment plan for coverage obtained through the association, the 
association may permit payment of the stabilization reserve fund 
charge on an installment basis or may require the policyholder to 
pay the charge as an annual lump sum.
	SECTION 4.  Subsection (b), Section 4B, Article 21.49-3, 
Insurance Code, is amended to read as follows:
	(b)  Each policyholder shall pay annually into the 
stabilization reserve fund a charge, the amount of which shall be 
established annually by advisory directors chosen by for-profit and 
not-for-profit nursing homes eligible for insurance in the 
association in accordance with the plan of operation.  The charge 
shall be in proportion to each premium payment due for liability 
insurance through the association.  The charge shall be separately 
stated in the policy, but shall not constitute a part of premiums or 
be subject to premium taxation, servicing fees, acquisition costs, 
or any other similar charges.  If the association offers an 
installment payment plan for coverage obtained through the 
association, the association may permit payment of the 
stabilization reserve fund charge on an installment basis or may 
require the policyholder to pay the charge as an annual lump sum.
	SECTION 5.  This Act takes effect September 1, 2003.                           



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