Floor Packet Page No. 222                                                   

Amend CSHB 3 by inserting the following appropriately 
numbered SECTION in PART A, ARTICLE 3 of the bill to read as 
	SECTION 3A.___.  Section 3(a)(1), Article 5.13-2, Insurance 
Code, is amended to read as follows:
		(1)  "Disallowed expenses" includes:                                          
			(A)  administrative expenses, not including 
acquisition, loss control, and safety engineering expenses, that 
exceed 110 percent of the industry median for those expenses; 
			(B)  lobbying expenses;                                                      
			(C)  advertising expenses, other than for 
				(i)  directly related to the services or 
products provided by the insurer; or 
				(ii)  designed and directed at loss 
			(D)  amounts paid by an insurer:                                             
				(i)  as damages in an action brought against 
the insurer for bad faith, fraud, or any matters other than payment 
under the insurance contract;  [or]
				(ii) as fees, fines, penalties, or exemplary 
damages for a civil or criminal violation of law; or
				(iii)  under a motor vehicle insurance policy 
in the form of taxes imposed on motor vehicle repair services under 
Chapter 151, Tax Code;
			(E)  contributions to:                                                       
				(i)  social, religious, political, or 
fraternal organizations; or         
				(ii)  organizations engaged in legislative 
			(F) except as authorized by rule by the 
commissioner, fees and assessments paid to advisory organizations;
			(G)  any amount determined by the commissioner to 
be excess premiums charged by the insurer; and
			(H)  any unreasonably incurred expenses, as 
determined by the commissioner after notice and hearing.