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By: Duncan S.B. No. 891
A BILL TO BE ENTITLED
AN ACT
relating to the operation of the joint underwriting association
under the Texas Medical Liability Insurance Underwriting
Association Act.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 3, Article 21.49-3, Insurance Code, is
amended by adding Subsection (d) to read as follows:
(d) The association may provide general liability insurance
coverage to be issued in connection with medical liability
insurance issued by the association.
SECTION 2. Section 4A, Article 21.49-3, Insurance Code, as
amended by Chapters 921 and 1284, Acts of the 77th Legislature,
Regular Session, 2001, is reenacted and amended to read as follows:
Sec. 4A. POLICYHOLDER'S STABILIZATION RESERVE FUND FOR
PHYSICIANS AND HEALTH CARE PROVIDERS OTHER THAN FOR-PROFIT AND
NOT-FOR-PROFIT NURSING HOMES. (a) There is hereby created a
policyholder's stabilization reserve fund for physicians and
health care providers, other than for-profit and not-for-profit
nursing homes, which shall be administered as provided herein and
in the plan of operation of the association. The stabilization
reserve fund created by this section is separate and distinct from
the stabilization reserve fund for for-profit and not-for-profit
nursing homes created by Section 4B of this article.
(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.
(c) The stabilization reserve fund shall be collected and
administered by the association and shall be treated as a liability
of the association along with and in the same manner as premium and
loss reserves. The fund shall be valued annually by the board of
directors as of the close of the last preceding year.
(d) [Except as provided by Subsection (e) of this section,
collections] Collections of the stabilization reserve fund charge
shall continue until such time as the net balance of the
stabilization reserve fund is not less than the projected sum of
premiums for physicians and health care providers, other than
for-profit and not-for-profit nursing homes, to be written in the
year following valuation date.
[(e) If in any fiscal year the incurred losses and defense
and cost-containment expenses from physicians or any single
category of health care provider result in a net underwriting loss
and exceed 25 percent of the stabilization reserve fund, as valued
for that year, the commissioner may by order direct the initiation
or continuation of the stabilization reserve fund charge for
physicians or that category of health care provider until the fund
recovers the amount by which those losses and cost-containment
expenses exceed 25 percent of the fund.]
(e) The stabilization reserve fund shall be credited with
all stabilization reserve fund charges collected from physicians
and health care providers, other than for-profit and not-for-profit
nursing homes, and shall be charged with any deficit sustained by
physicians and health care providers, other than for-profit and
not-for-profit nursing homes, from the prior year's operation of
the association.
[(f) The stabilization reserve fund shall be credited with
all stabilization reserve fund charges collected from
policyholders and shall be charged with any deficit from the prior
year's operation of the association.]
SECTION 3. This Act takes effect September 1, 2003.