By:  Fraser                                                       S.B. No. 1281
	(In the Senate - Filed March 12, 2003; March 19, 2003, read 
first time and referred to Committee on Business and Commerce; 
April 7, 2003, reported favorably by the following vote:  Yeas 8, 
Nays 0; April 7, 2003, sent to printer.)

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.
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