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A BILL TO BE ENTITLED
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AN ACT
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Relating to the establishment of the Texas Individual Health |
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Insurance Association and to the efficient operation of that system |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle ______, Title ______, Insurance code, |
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is amended by adding Chapter ______ to read as follows: CHAPTER |
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______ Texas Individual Health Insurance Association. |
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Sec. ______. DEFINITIONS |
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In this chapter: |
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(1) "Association" means the Texas Individual Health |
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Insurance Association. |
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(2) "Authorized insurer" means an insurer authorized by the |
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Texas Department of Insurance to write individual health coverage |
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under this title. |
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(3) "Insurance" means an insurance policy that meets the |
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requirements of Chapter ______, Insurance Code. |
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Sec. ______. NATURE AND COMPOSITION OF ASSOCIATION. |
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(a) The Texas Healthy Individual Insurance Association is a |
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nonprofit corporate body composed of all authorized insurers. |
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(b) Each authorized insurer must be a member of the |
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association as a condition of the insurer's authority to write |
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individual health insurance in this state |
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Sec. ______. GOVERNANCE OF THE ASSOCIATION: |
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(a) the association is administered by a governing |
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committee under a plan of operation. |
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(b) The governing committee of the Association is composed |
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of 12 members appointed by the Texas Commissioner of Insurance to be |
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selected as follows: |
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(1) six members who represent the interests of insurers, |
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elected by the association members according to a method the |
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members determine; |
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(2) four public members selected by the commissioner; and |
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(3) two members who are Texas health insurance agents |
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(c) To be eligible to serve on the governing committee as a |
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representative of insurers, an individual must be a full-time |
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employee of or contractor with an authorized insurer. |
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(d) An individual may not serve on the governing committee |
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as a public member if the individual, another individual related to |
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that individual within the second degree by consanguinity or |
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affinity, or another individual residing in the same household with |
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that individual: |
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(1) is required to be registered or licensed under this code |
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or another insurance law of this state; |
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(2) is employed by or acts as a consultant to a person |
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required to be registered or licensed or required to hold a |
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certificate of authority under this code or another insurance law |
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of this state; |
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(3) is the owner of, has a financial interest in, or |
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participates in the management of an organization required to be |
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registered or licensed or required to hold a certificate of |
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authority under this code or another insurance law of this state; |
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(4) is an officer, employer, or consultant of an association |
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in the field of insurance; or |
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(5) is required to register as a lobbyist under Chapter 305, |
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Government Code. |
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Sec. ______. IMMUNITY FROM LIABILITY |
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(a) The association, a member of the governing committee, or |
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an employee of the association is not personally liable for: |
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(1) an act performed in good faith within the scope of the |
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person's authority as determined under this chapter or the plan of |
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operation; or |
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(2) damages occasioned by the person's official act or |
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omission except an act or omission that is corrupt or malicious. |
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(b) The association shall provide counsel to defend an |
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action brought against a member of the governing committee or an |
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employee because of the person's official act or omission |
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regardless of whether the person has terminated service with the |
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association when the action is instituted. |
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(c) This section is cumulative of and does not affect or |
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modify a common law or statutory privilege of the association or it |
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governing committee. |
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Sec. ______. POWERS AND DUTIES OF ASSOCIATION |
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The association has the powers granted to a nonprofit |
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corporation under the Business Organizations Code. |
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Sec. ______. ASSIGNMENT OF INSURANCE; ELIGIBILITY. |
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(a) The association shall provide for the assignment of |
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insurance to an authorized insurer. Such assignment will be made to |
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carriers in proportion to each insurer's percentage of premium of |
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the individual health market for |
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(b) An applicant is not eligible for insurance assignment |
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through the association unless the applicant and the health agent |
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certify as part of the application to the association that the |
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applicant has been rejected for insurance by at least two insurers |
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that are authorized to engage in business in this state and that are |
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writing individual health insurance in this state. the last |
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calendar year. |
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(c) The assigned risk will be administered by the assigned |
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insurer. |
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(d) Assignment of risks to the members of the Association |
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shall be made on a guaranteed issue basis. |
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Sec. ______. ASSESSMENTS FOR OPERATIONS EXPENSES. |
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(a) The association may assess authorized insurers to |
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provide money to operate the association. |
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(b) The amount assessed against an authorized insurer must |
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be in proportion to the insurer's writing of automobile liability |
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insurance in this state. |
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(c) The association may bring an action to collect an |
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assessment against an authorized insurer that does not pay the |
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assessment within a reasonable time. In addition, the association |
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may report an authorized insurer's failure to pay the assessment to |
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the commissioner. The commissioner may institute a disciplinary |
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action against the insurer for failure to pay the assessment. |
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Sec. ______. PLAN OF OPERATION |
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(a) The Association shall be administered in compliance |
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with the plan of operation of the Association. |
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(b) The plan of operation must provide for the efficient, |
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economical, fair, and nondiscriminatory administration of the |
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association; and provide a means by which insurance may be |
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provided. |
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(c) Subject to the commissioner's approval, the governing |
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committee may amend the plan of operation. If the commissioner at |
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any time believes that any part of the plan of operation is |
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inconsistent with the purposes of this Chapter, the commissioner |
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shall notify the governing committee in writing so that the |
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governing committee may take corrective action. |
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(d) The Plan of Operation shall be effective upon approval |
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of the Commissioner. |
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(e) The Association shall be subject to the Open Meetings |
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Act and the Open Records Act. |
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Sec. ______. REINSURANCE |
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(a) The Association will also operate as a reinsurance |
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system, and insurers assigned a risk under this chapter may |
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reinsure such risk with the Association if notice of such |
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reinsurance is given to the Association within thirty days of the |
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assignment of the risk to the insurer. |
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(b) Reinsurance retention levels and premiums shall be set |
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by the Governing Board of the Association and shall be set in |
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accordance with sound actuarial science, and such matters will be |
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set forth in full in the plan of operation. |
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Sec. ______. PAYMENT OF EXCESS REINSURANCE LOSSES; PREMIUM |
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TAX CREDIT. |
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(a) Should there be a deficit for a calendar year caused by |
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the reinsurance losses greater than reinsurance premiums and |
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expenses of operation, carriers will be assessed during the |
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following year for this deficit in proportion to their individual |
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health premiums participation in the Association for the year in |
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which the deficit occurred in accordance with (b). |
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(b) The first $25 million shall be assessed against the |
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members of the association as stated above; the losses in excess of |
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$25 million shall be paid from reserve trust fund established by the |
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plan of operation and collected by fee on each policy assigned by |
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the plan and from any reinsurance program established by the |
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association; and any greater losses will be paid by an assessment of |
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the members of the association in the same proportion as set forth |
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in (a) above; and insurers may credit an amount paid in accordance |
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with this final portion of the assessment against the insurer's |
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premium tax. The tax credit authorized herein shall be allowed at a |
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rate not to exceed 20 percent per year for five or more successive |
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years beginning the calendar year that the assessments under this |
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section are paid. |
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Sec. ______. The Commissioner may adopt rules necessary to |
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implement this chapter. |
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SECTION 2 |
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Effective January 1, 2010. |