By:  Fraser                                                       S.B. No. 1281


A BILL TO BE ENTITLED

AN ACT

relating to the rulemaking authority of the commissioner of 
insurance.      
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 36.001, Insurance Code, is amended to 
read as follows:   
	Sec. 36.001.  [RULES FOR] GENERAL RULEMAKING AUTHORITY [AND 
UNIFORM APPLICATION].  (a)  The commissioner may adopt any rules 
necessary and appropriate to implement [for the conduct and 
execution of] the powers and duties of the department under this 
code and other laws of this state [only as authorized by statute].
	(b)  Rules adopted under this section must have general and 
uniform application.
	[(c)  The commissioner shall publish the rules in a format 
organized by subject matter.  The published rules shall be kept 
current and be available in a form convenient to any interested 
person.]
	SECTION 2.  Section 36.004, Insurance Code, is amended to 
read as follows:   
	Sec. 36.004.  COMPLIANCE WITH NATIONAL ASSOCIATION OF 
INSURANCE COMMISSIONERS REQUIREMENTS.  Except as provided by 
Section 36.005, the [The] department may not require an insurer to 
comply with a rule, regulation, directive, or standard adopted by 
the National Association of Insurance Commissioners, including a 
rule, regulation, directive, or standard relating to policy 
reserves, unless application of the rule, regulation, directive, or 
standard is expressly authorized by statute and approved by the 
commissioner.
	SECTION 3.  Subchapter A, Chapter 36, Insurance Code, is 
amended by adding Section 36.005 to read as follows:
	Sec. 36.005.  INTERIM RULES TO COMPLY WITH FEDERAL 
REQUIREMENTS.  (a)  The commissioner may adopt rules to implement 
state responsibility in compliance with a federal law or regulation 
or action of a federal court relating to a person or activity under 
the jurisdiction of the department if:
		(1)  federal law or regulation, or an action of a 
federal court, requires:
			(A)  a state to adopt the rules; or                                   
			(B)  action by a state to ensure protection of the 
citizens of the state;
		(2)  the rules will avoid federal preemption of state 
insurance regulation; or
		(3)  the rules will prevent the loss of federal funds to 
this state. 
	(b)  The commissioner may adopt a rule under this section 
only if the federal action requiring the adoption of a rule occurs 
or takes effect between sessions of the legislature or at such time 
during a session of the legislature that sufficient time does not 
remain to permit the preparation of a recommendation for 
legislative action or permit the legislature to act.  A rule adopted 
under this section shall remain in effect only until 30 days 
following the end of the next session of the legislature unless a 
law is enacted that authorizes the subject matter of the rule.  If a 
law is enacted that authorizes the subject matter of the rule, the 
rule will continue in effect.
	SECTION 4.  Subsection (p), Article 3.42, Insurance Code, is 
amended to read as follows:
	(p)  The commissioner is hereby authorized to adopt [such] 
reasonable rules [and regulations] as [are] necessary to implement 
and accomplish the [specific provisions of this Article and are 
within the standards and] purposes of this Article.  The 
commissioner shall adopt rules under this Article in compliance 
with Chapter 2001, Government Code [(Administrative Procedure 
Act)].  A rule adopted under this Article may not be repealed or 
amended until after the first anniversary of the adoption of the 
rule unless the commissioner finds that it is in the significant and 
material interests of the citizens of the state or that it is 
necessary as a result of legislative enactment to amend, repeal, or 
adopt a [in a public hearing after notice that there is a compelling 
public need for the amendment or repeal of the] rule or part of a 
[the] rule.
	SECTION 5.  Section 36.002, Insurance Code, is repealed.                       
	SECTION 6.  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.