Senate Research Center

H.B. 3752


By: Frank et al. (Hancock)


Business & Commerce










The Texas Mutual Insurance Company (Texas Mutual) was established in the early 1990s by the Texas Legislature in response to rapidly increasing workers' compensation rates and an unstable market. Although it was required to be the insurer of last resort, the company was the only option available in many parts of the state. Within two years of its creation, the company was one of the state's largest workers' compensation insurers and it successfully paid the state back for all initial funding. The company was later granted the authority to operate as a mutual company, meaning it is fully owned by its members, and to operate as a domestic insurance company fully regulated by the Texas Department of Insurance. Today, Texas Mutual has about 40 percent of the state's workers' compensation market share and maintains an "A" rating from AM Best. H.B. 3752 seeks to allow Texas Mutual to create, acquire, or otherwise own or operate subsidiaries to offer innovative, cost-effective solutions and bring the same level of affordable and effective success to the health insurance marketplace that it brought to the workers' compensation market.


H.B. 3752 amends current law relating to the offering of health benefits by subsidiaries of the Texas Mutual Insurance Company.




Rulemaking authority is expressly granted to the commissioner of insurance in SECTION 2 (Section 2054.604, Insurance Code) of this bill.




SECTION 1. Amends Section 2054.107, Insurance Code, as follows:


Sec. 2054.107. CERTAIN RELATIONSHIPS WITH OTHER INSURERS PROHIBITED. Creates an exception under Section 2054.602. Makes a nonsubstantive change.


SECTION 2. Amends Chapter 2054, Insurance Code, by adding Subchapter M, as follows:




Sec. 2054.601. DEFINITION. Defines "alternative health benefit coverage."


Sec. 2054.602. HEALTH BENEFIT COVERAGE OFFERED BY SUBSIDIARY AUTHORIZED. (a) Authorizes the Texas Mutual Insurance Company (company) to create, acquire, or otherwise own or operate one or more subsidiaries that offer accident or health insurance or another type of health benefit coverage or health benefit plan as provided by this subchapter.


(b) Authorizes a subsidiary of the company to offer in this state accident or health insurance or another type of health benefit plan authorized under this code, in accordance with a certificate of authority issued to the subsidiary under this code, or to offer in this state alternative health benefit coverage as described by Section 2054.601.


(c) Prohibits the company from being held liable for an act or obligation of a subsidiary of the company operating under this section.


(d) Prohibits a subsidiary of the company from offering or issuing any policy, plan, or benefit coverage under this section before January 1, 2023. Provides that this subsection expires September 1, 2023.


Sec. 2054.603. CONSIDERATIONS AND GUIDING PRINCIPLES FOR DEVELOPING HEALTH BENEFITS OFFERINGS. Requires the company, in developing health benefits or health benefit plan options to be offered through a subsidiary of the company, to fully explore all health coverage options that are authorized to be offered under this subchapter and place emphasis on:


(1) increasing competition in the health insurance market;


(2) utilizing innovations that improve the quality of health care while lowering health care costs;


(3) ensuring coverage and access to care for individuals in this state with preexisting conditions;


(4) leveraging federal tax credits that may be available for private health benefit coverage to the greatest extent possible to increase the affordability of health benefit coverage;


(5) ensuring transparency and coherence of costs and coverage to inform individuals shopping for health benefits;


(6) reducing incidences of medical debt faced by individuals in this state and uncompensated care faced by providers in this state; and


(7) ensuring equitable costs regardless of gender or prospects of pregnancy or childbirth.


Sec. 2054.604. RULES. Authorizes the commissioner of insurance to adopt rules as necessary to implement this subchapter, except with respect to alternative health benefit coverage as described by Section 2054.601 or a subsidiary of the company offering alternative health benefit coverage.


Sec. 2054.605. EXEMPTION FROM OTHER INSURANCE LAWS. Provides that a provision of this code, other than Chapter 2054 (Texas Mutual Insurance Company), does not apply to alternative health benefit coverage as described by Section 2054.601 unless alternative health benefit coverage is expressly mentioned in the other law.


SECTION 3. Effective date: September 1, 2021.