Summary of Bills Enacted by the 81st Texas Legislature
During the 81st regular session of the Texas Legislature, the Texas Department of Insurance (TDI) tracked 1,272 bills, and 222 of those passed and were sent to the Governor.
This article summarizes some of the enacted legislation that directly impacts TDI or the insurance industry. The summaries are grouped alphabetically by subject, from Auto to Workers’ Compensation. Summaries begin with the bill number and the primary author and sponsor. Because these excerpts are summaries only, those interested in actual details are encouraged to view the full text of each bill, along with legislative histories, analyses and fiscal impacts at the Texas Legislature’s website at: www.capitol.state.tx.us/.
Also of note for the insurance industry was action taken during a special session of the legislature called by Governor Rick Perry. Over a two-day period, legislators accomplished the passage of Senate Bill (SB) 2 by Hegar, et al.; Sponsored by Isett (81st First Called Session). SB 2 was signed by the Governor on July 10, 2009 and is effective immediately. It extends the Sunset dates of several agencies, including TDI and the Office of Public Insurance Counsel, to September 1, 2011.Auto/Property/Home | Disaster-Related | Financial | Fraud | General Appropriations | Life/Health/Licensing | State Agencies/Enforcement and Compliance/Recodification | State Fire Marshal | Title | Workers' Compensation
House Bill (HB) 586 by Naishtat; Sponsored by Carona (Effective September 1, 2009)
HB 586 relates to evidence required for the release of a motor vehicle after impoundment of the vehicle for failure to maintain evidence of financial responsibility. The current requirement of evidence of financial responsibility is for the two-year period immediately following the date the defendant applies for release of the impounded vehicle. The new law added a provision that requires the court, by order, to permit a defendant to provide evidence of insurability in increments of a period of not less than six months.
HB 1975 by Hancock; Sponsored by Lucio (Effective immediately – June 19, 2009)
HB 1975 relates to the refund of excess unearned premiums by insurance premium finance companies and increases from $1 to $5 the amount below which an insured is not entitled to a refund if the crediting of return premiums to the account of an insured results in a surplus over the amount due from the insured.
HB 2012 by Vaught, et al.; Sponsored by Carona (Effective September 1, 2009)
HB 2012 enhances the penalties for driving without a valid license and without financial responsibility. The bill provides that an offense of driving while license is invalid is 1)a Class B misdemeanor if it is shown at trial that at the time of the offense, the person was operating the vehicle without establishing financial responsibility; and 2) a Class A misdemeanor if it is shown at trial that at the time of the offense, the person was operating the vehicle without establishing financial responsibility and caused or was at fault in a motor vehicle accident that resulted in serious bodily injury to or the death of another person. The change in law made by this bill applies only to an offense committed on or after the effective date of the bill.
HB 2449 by Eiland; Sponsored by Lucio (Effective September 1, 2009)*
HB 2449 increases solvency standards for county mutual insurance companies. The bill subjects most county mutual insurance companies to risk-based capital requirements that the Commissioner may adopt by rule. Certain county mutual insurance companies defined in the bill will be subject to an alternative form of risk-based capital that is also specified by the bill. The bill requires the Commissioner by rule to adopt a transition period of not less than five years for those companies to meet the requirements and for the pro rata elimination of any deficiencies in the amounts required. These certain county mutual insurance companies are required to file rating information for each managing general agent, district, or local chapter program and shall be treated as separate insurers for the purposes of Chapters 544 (Prohibited Discrimination), 2251 (Rates), 2253 (Rating Territories), and 2254 (Premium Refund for Certain Personal Lines) of the Texas Insurance Code. (Also listed under category of Financial, page 6).
HB 2877 by Sheffield; Sponsored by Fraser (Effective September 1, 2009)
HB 2877 raises the monetary limits of the categories for Closed Claim Bodily Injury Liability Reports that are submitted to TDI based on liability insurance data. The aggregate report will now be for indemnity payments from “$0 - $25,000”; the short form report will be for indemnity payments from “$25,001 - $74,999”; and the long form report will be for indemnity payments from “$75,000 or greater.” In addition, the bill allows the department to utilize a statistical reporting agency to perform the Closed Claim Reconciliation task.
HB 3221 by Hancock; Sponsored by Van de Putte (Effective immediately – June 19, 2009)
HB 3221 amends the requirements regarding notification before automatic premium payments may be increased for withdrawal of funds from a person’s account. The bill adds new mailing and notice requirements for insurers and provisions for objection by the policyholder. These Insurance Code provisions are applicable to insurers engaged in the business of insurance in this state, including surplus lines insurers. (Also listed under category of Life/Health/Licensing, page 10).
HB 4409 by Taylor, et al.; Sponsored by M. Jackson (Effective immediately – June 19, 2009 with some provisions effective September 1, 2009)
HB 4409 relates to emergency preparation and management and includes revisions to the Texas Windstorm Insurance Association (TWIA) with the goal of sustaining its funding for the future. The bill also requires TWIA to be reviewed by the Sunset Advisory Commission in 2015 and to submit to the Commissioner, the Legislature, and the Sunset Advisory Commission a biennial report on or before December 31 of each even-numbered year. Changes to TWIA’s operation include a new Board of Directors composition, provisions for post-event issuance of public securities with re-payment not dependent on the State’s general revenue, evidence of one declination to obtain coverage, evidence of flood coverage in certain flood zones to obtain coverage, mandatory compliance with the windstorm building code with a surcharge for certain non-compliant structures, and a file-and-use rating provision with certain limitations on rate increases. The bill also requires TDI to develop incentive programs to encourage authorized insurers to write insurance on a voluntary basis and to minimize the use of TWIA as a means to obtain insurance. (Also listed under category of Disaster-Related, page 5).
SB 778 by Watson; Sponsored by Geren (Effective September 1, 2009 with some provisions effective January 1, 2010)
SB 778 places certain identity theft prevention and recovery services under the jurisdiction of the Texas Department of Licensing and Regulation and authorizes those services to be financed as part of certain car loans. The bill applies to identity recovery service contracts entered into on or after January 1, 2010. Among the exemptions from the provisions of the newly created chapter cited as the Identity Recovery Service Contract Regulatory Act is an identity recovery service contract sold by a motor vehicle dealer on a motor vehicle sold by that dealer, if the dealer is the provider; is licensed as a motor vehicle dealer under Chapter 2301 of the Occupations Code; and covers its obligations under the identity recovery service contract with a reimbursement insurance policy.
SB 820 by Duncan; Sponsored by Menendez (Effective immediately – May 23, 2009)
SB 820 amends the Local Government Code to require the governing body of a municipality with a population of more than 100,000 to publish notice before taking action to consider, review, and recommend the adoption of or amendment to a national model code governing the construction, renovation, use, or maintenance of buildings and building systems in the municipality. The bill further requires the governing body to encourage public comment from persons affected by the proposed action and to hold a public hearing upon request. These requirements do not apply if the governing body has established an entity for the purpose of obtaining public comment on the proposed action. The bill also requires that implementation and enforcement of an ordinance or national model code provision be delayed until at least 30 days after final adoption to permit persons affected to comply with the ordinance or provision unless a delay would cause imminent harm to the health or safety of the public.
SB 1965 by Harris; Sponsored by Geren, et al. (Effective September 1, 2009)
SB 1965 relates to the regulation of retail installment contracts for commercial vehicles. The bill excludes such contracts from certain provisions of the Finance Code regarding motor vehicle installment contracts, such as excluding insurance on a commercial vehicle securing a retail installment contract from the types of insurance coverage that are considered collateral protection insurance. The bill also allows certain loss waiver charges which are not considered insurance or engaging in the business of insurance. The bill further allows that a retail installment contract for a commercial vehicle may include a charge for insurance coverage relating to the commercial vehicle, the use of the commercial vehicle, or the retail installment contract, to be provided only by insurers authorized to engage in business in Texas or eligible surplus lines insurers. The bill applies only to a retail installment contract entered into on or after September 1, 2009.
SB 1966 by Harris; Sponsored by Hopson (Effective September 1, 2009)
SB 1966 allows a retail seller of motor vehicles, in connection with a retail installment transaction, to offer to the retail buyer a debt cancellation agreement, defined as canceling all or part of an obligation to repay the debt on the occurrence of the total loss or theft of the motor vehicle. The retail seller may not require that the purchase of a debt cancellation agreement by the retail buyer be made in order to enter into a retail installment transaction, and the amount charged for a debt cancellation agreement must be reasonable. The bill also states that a debt cancellation agreement is not considered an insurance product.
SB 1967 by Carona; Sponsored by Chavez (Effective September 1, 2009)
SB 1967 relates to the safe operation of motorcycles and other vehicles in Texas. Instead of a minimum amount of $10,000 in required health insurance to be eligible for an exception for the offense of operating or riding a motorcycle without a helmet, the bill requires coverage by a health insurance plan for injuries in an accident while operating or riding on a motorcycle and requires TDI to prescribe a standard proof of health insurance for issuance to persons who are at least 21 years of age and covered by such a plan. The bill also prohibits a peace officer from stopping or detaining a person who is the operator of or a passenger on a motorcycle for the sole purpose of determining whether the person has successfully completed a motorcycle operator training and safety course or is covered by a motorcycle health insurance plan. (Also listed under category of Life/Health/Licensing, page 14).
HB 1831 by Corte, et al.; Sponsored by Carona (Effective September 1, 2009 with Article 5 on judicial preparedness effective immediately – June 19, 2009)
HB 1831 is an omnibus bill relating to disaster preparedness and emergency management. The bill requires the Governor’s Division of Emergency Management (GDEM), in cooperation with other agencies, groups, and local governments, to develop an annex to the state emergency management plan that addresses initial response planning for providing essential population support supplies, equipment, and services during the first five days immediately following a disaster. It contains provisions regarding development of a phased re-entry plan and the creation of uniform guidelines for acceptable home repairs following a disaster. Additionally, upon declaration of a disaster, regulation of signage in the disaster area is suspended to allow licensed or admitted insurance carriers or licensed agents to erect temporary claims service signage for not more than 30 days or until the end of the declaration of disaster, whichever is earlier.
HB 3851 by Eiland; Sponsored by Huffman (Effective immediately – June 19, 2009)
HB 3851 authorizes the Governor, on request of a political subdivision, to waive or suspend a deadline imposed by a statute or agency order or rule on the political subdivision, including a deadline relating to a budget or property tax, if the waiver or suspension is reasonably necessary to cope with a disaster. The bill further provides that a deadline imposed by local law, including a deadline relating to a budget or property tax, is suspended for up to 30 days if the territory of the political subdivision is located in a declared disaster area and the presiding officer or governing body of the political subdivision proclaims the political subdivision is unable to comply with the requirement because of the disaster. The bill authorizes the presiding officer or governing body to issue an order ending the suspension of a deadline.
HB 4102 by Eiland, et al.; Sponsored by Carona (Effective immediately – June 19, 2009)
HB 4102 allows a state or local government entity or other eligible entity that participates in disaster recovery to request and receive funding from the disaster contingency fund. The bill further provides that a state or local government entity or other eligible entity that receives funding from the disaster contingency fund to pay for costs associated with disaster recovery and that subsequently receives reimbursement from the federal government, an insurer, or another source for those same costs shall reimburse the disaster contingency fund for the reimbursed amounts. The bill also amends the Education Code to allow for adjustments of average daily attendance for school districts in a disaster area; adjustments for property values affected by a state of disaster; and reimbursement for disaster remediation costs.
HB 4409 by Taylor, et al.; Sponsored by M. Jackson (Effective immediately – June 19, 2009 with some provisions effective September 1, 2009)
(See bill summary above, under Auto/Property/ Home, page 3)
SB 1328 by Nelson; Sponsored by Naishtat (Effective immediately – June 19, 2009)
SB 1328 provides that the Department of State Health Services shall conduct a study to determine the feasibility of providing certain vaccines (hepatitis B, tetanus, and other vaccines recommended by Centers for Disease Control and Prevention) to:
- a first responder who may be exposed to vaccine-preventable diseases during the responder's deployment to a disaster area; and
- the immediate family members of a first responder to whom the first responder may transmit a vaccine-preventable disease after deployment to a disaster area.
The bill also provides that not later than August 1, 2011, the Department of State Health Services shall submit to the Legislature a written report containing the findings of the study and that Department’s recommendations.
HB 651 by Darby; Sponsored by Harris (Effective September 1, 2009)
HB 651 raises the limit of compensation that domestic stock life, accident and health insurance companies can make to certain persons without authorization by its board of directors. Compensation by a company to an individual, firm, or corporation, including an officer or director of the company, when added to any compensation or emolument paid to the person by an affiliated domestic insurance company may not exceed $150,000 in any year, unless approved by the company’s board.
HB 1476 by Sheffield; Sponsored by Fraser (Effective September 1, 2009)
HB 1476 amends the Insurance Code to require a property and casualty insurance company to have capital stock in an amount of at least $2.5 million, rather than $1 million, and surplus in an amount of at least $2.5 million, rather than $1 million. The bill also provides for a phase-in of the requirements over a multiple-year period for companies existing in this state as of September 1, 2009, but also requires an immediate increase to the required capital and surplus if there is a change in voting or other method of control of at least 50 percent of an insurance company or its holding company.
HB 1761 by Thompson; Sponsored by Van de Putte (Effective immediately – June 19, 2009)
HB 1761 amends current law relating to the reserve requirements for credit life and credit accident and health insurance. The bill provides that for policy contracts issued on or after January 1, 2009, the reserve requirements shall be based on minimum reserve standards established by the Commissioner by rule as adopted based on certain mortality tables or those as approved by the National Association of Insurance Commissioners.
HB 2449 by Eiland; Sponsored by Lucio (Effective September 1, 2009)
(See bill summary above, under Auto/Property/ Home, page 1)
HB 4291 by Smithee; Sponsored by Fraser (Effective immediately – June 19, 2009)*
HB 4291 grants TDI the authority to approve, deny, or disapprove an insurer’s application for a certificate of authority without being required to first hold a hearing, and provides an applicant the right to request a hearing after a denial to provide the applicant an opportunity to demonstrate whether it meets all requirements for issuance of a certificate of authority. The bill also requires the Commissioner to request a hearing date not later than the 30th day after the date of the applicant’s request for a hearing. Added to the definition of insurer are HMOs, group hospital service corporations, and nonprofit legal services corporations.
HB 4338 by Smithee; Sponsored by Fraser (Effective September 1, 2009)
HB 4338 amends current law relating to title insurance agents and title insurance companies and allows the Commissioner more flexibility in handling impaired title insurance agents and companies. The bill also provides new requirements, with a phase-in period, for abstract plants to cover a period beginning not later than January 1, 1979 and be kept current. Additionally, there are new auditing requirements for certain title agents, a new required professional training program for title insurance agents, as well as a provision that premium splits that are owed must be held in trust by title agents. The bill further contains provisions dealing with confidentiality of information and hearing requirements for certain rate hearings. (Also listed under category of Title, page 16)
HB 4339 by Smithee; Sponsored by Fraser (Effective immediately – June 19, 2009)*
HB 4339 creates an unauthorized insurance guaranty fund. The purpose of the fund is to alleviate the financial hardship resulting from the sale of unauthorized insurance in Texas. The bill is intended to provide funding to help compensate persons whose claims are left unpaid by unauthorized insurers in Texas, and defray the costs of handling claims. The fund is different from existing insurance guaranty associations, which pay claims of insolvent licensed insurers, but do not cover the victims of unauthorized insurers.
HB 148 by T. Smith, Sponsored by Wentworth (Effective September 1, 2009)
HB 148 amends the Penal Code to expand the conditions that constitute the Class A misdemeanor offense (or greater if previously convicted) of barratry and solicitation of professional employment as they apply to a person who is an attorney, chiropractor, physician, surgeon, or private investigator licensed to practice in Texas or any person licensed, certified, or registered by a health care regulatory agency of this state. The conditions now include the solicitation or knowingly permitting the solicitation, including a solicitation in person or by telephone, of an individual who has not sought the person's employment, legal representation, advice, or care, within certain time frames, with the intent to obtain professional employment for the person or for another. The change in law made by this bill applies only to an offense committed on or after the effective date of September 1, 2009.
HB 2840 by Solomons; Sponsored by Averitt (Effective September 1, 2009)
HB 2840 adds the Texas Department of Housing and Community Affairs to statutes relating to reporting, sharing information on, and investigating fraudulent activity. The bill also makes it an offense to intentionally or knowingly make a false or misleading written statement in providing a property appraisal for compensation.
SB 375 by Carona; Sponsored by T. Smith (Effective immediately – June 19, 2009)
SB 375 makes the Crash Records Information System (CRIS) database and information contained in the CRIS database privileged in the same manner that accident reports are privileged under state law. The bill authorizes the Texas Department of Transportation (TxDOT) or a governmental entity to make statistical information derived from the CRIS database available to the public at TxDOT’s discretion.
SB 650 by Van de Putte; Sponsored by Hopson (Effective immediately – June 19, 2009)
SB 650 removes the prohibition against carrying a firearm or making an arrest for an employee commissioned as a peace officer by the State Board of Pharmacy under the Texas Pharmacy Act.
SB 1 by Ogden; Sponsored by Pitts (Effective September 1, 2009)
SB 1 contains several appropriations items relating to TDI which include:
- a study of data mining used in underwriting and rating for personal automobile, residential property insurance or health benefit plans; results of the study to be published in TDI's 2010 biennial report;
- a requirement for TDI to conduct a review of levels of coverage to determine what, if any, changes have occurred in the level of protection offered by homeowners insurance policies since the Department's adoption of approved national forms in 2002 and to prepare a report for the 82nd Legislature;
- an award of funds for both 2010 and 2011 to continue the Three-Share Premium Assistance grant program initiated in 2008;
- a study of the accessibility and affordability of health benefit plan coverage and premiums for families and individuals under certain threshold levels of income; results of the study to be published in TDI’s 2010 biennial report; and
- a requirement for TDI to submit a quarterly report to the legislature and the public that contains market share, profits and losses, average rate, and average loss ratio information for each insurer that writes a line of insurance in Texas, and which includes the change in rate over the previous 12, 24, and 36 months.
HB 451 by Allen, et al.; Sponsored by Lucio (Effective September 1, 2009)
HB 451 changes the mandatory coverage requirement for autism spectrum disorder (ASD) so that plans must provide coverage for
ASD for enrollees from the date of diagnosis until the enrollee completes nine years of age. The bill also expands applicability of the subchapter relating to coverage for ASD and other disorders to basic plans under the Texas Public School Employees Group Benefits Program and primary care coverage plans under the Texas School Employees Uniform Group Health Coverage.
HB 497 by Zerwas, et al.; Sponsored by Nelson (Effective immediately – June 19, 2009)
HB 497 requires the Health and Human Services Commission and TDI to conduct a joint study to determine the effect on the health care infrastructure in this state, including health care delivery mechanisms, if the state Medicaid program is abolished or the amount of federal matching money available to the state under the program is severely reduced. In conducting the study, the two agencies may seek input from health advocacy groups, and not later than July 1, 2010, shall submit a joint report of the findings and conclusions resulting from the study to the Lieutenant Governor, the Speaker of the House of Representatives, and the presiding officers of the standing committees of the Senate and House of Representatives having primary jurisdiction over health and human services. Further, the Executive Commissioner of the Health and Human Services Commission and the Commissioner of Insurance may adopt the transition plan that is required as part of the study as a contingency plan for transitioning recipients of health care services from the state Medicaid program to a new health care delivery system.
HB 739 by Quintanilla; Sponsored by Ellis (Effective September 1, 2009) *
HB 739 adds new continuing education requirements for insurance agents who sell Medicare-related products and will be applicable to licenses issued or renewed on or after April 1, 2010. The bill requires a standard minimum of Medicare-specific education by a TDI-certified training program for an agent to complete (8 hours before the agent sells Medicare-related products, and then 4 hours during the two-year licensing period thereafter), in order to sell, solicit, or negotiate a contract for Medicare products in this state.
HB 806 by Gallego, et al.; Sponsored by Zaffirini (Effective September 1, 2009)
HB 806 requires health benefit plan coverage equivalent to that provided by the federal Medicare program for prosthetic devices, orthotic devices, and professional services related to the fitting and use of these devices by certain health benefit plans, including small employer group plans, health group cooperatives, and plans provided to state and some public school employees. Subject to applicable co-payments and deductibles, the repair and replacement of these devices are also covered, except for misuse or loss. The bill applies only to health benefit plans delivered, issued, or renewed on or after January 1, 2010.
HB 1290 by Oliveira, et al.; Sponsored by Lucio (Effective September 1, 2009)
HB 1290 expands access to medical screenings to increase the early detection of cardiovascular disease. The bill provides coverage under certain health benefit plans for specified tests for the early detection of cardiovascular disease. A health benefit plan that provides coverage for screening medical procedures must provide specified minimum coverage to men older than 45 and younger than 76 and women older than 55 and younger than 76 who are diabetic or are at intermediate or higher risk of heart attack, according to a score using the Framingham Heart Study coronary prediction algorithm. The bill also requires the Board of Trustees of the Employees Retirement System of Texas to develop as soon as practicable, but not later than September 1, 2010, a cost-neutral or cost-positive plan for providing bariatric surgery coverage for eligible state employees. This bill applies only to a health benefit plan delivered, issued for delivery, or renewed on or after January 1, 2010.
HB 1342 by Menendez, et al.; Sponsored by Harris (Effective immediately – May 30, 2009)
HB 1342 requires a health benefit plan issuer to use information technology that provides a participating health care provider and a plan enrollee with real-time information relating to the enrollee's costs and coverage. The bill imposes certain requirements to use the technology beginning not later than September 1, 2013, with provisions for exceptions and waivers before that time. The bill also requires rulemaking by the Commissioner, which rules must be consistent with national standards established by the Workgroup for Electronic Data Interchange or by other similar organizations recognized by the Commissioner.
HB 1364 by Eissler; Sponsored by Averitt (Effective September 1, 2009)
HB 1364 makes group health benefit coverage provided or offered to school district employees through a uniform group coverage program subject to provisions in the Texas Health Insurance Portability and Availability Act relating to requirements regarding pre-existing conditions, affiliation periods and waiting periods.
HB 1757 by Thompson; Sponsored by Van de Putte (Effective immediately – June 19, 2009)
HB 1757 requires a review of limited and single lines insurance agent license examinations if during any 12-month period that exam has an overall pass rate of less than 70 percent for first-time exam takers. The bill requires TDI to collect demographic data and to compile a report indicating whether there was any disparity in the pass rate based on race, gender, or national origin. The first 12-month period for review begins September 1, 2009, and the Commissioner shall deliver the initial report not later than December 1, 2010.
HB 1919 by Kent, et al.; Sponsored by Ellis (Effective September 1, 2009)*
HB 1919 relates to the maturity dates of certain annuities by providing that, in determining the value of the annuity, the maturity date is the latest date on which an election is permitted by the contract but not later than the later of the next anniversary of the annuity contract that follows the annuitant’s 70th birthday or the 10th anniversary of the contract. The bill applies to an annuity that is delivered, issued for delivery, or renewed on or after June 1, 2010.
HB 2064 by Smithee, et al.; Sponsored by Averitt (Effective January 1, 2010)
HB 2064 provides sliding scale premium discounts for participants in the Texas Health Insurance Risk Pool (now known as the Texas Health Insurance Pool – see SB 1403, page 13) under the following income criteria:
- those whose household income was below 200 percent of the federal poverty level would pay the standard risk rate; and
- those whose household income was at or below 300 percent, but not less than 200 percent, of the federal poverty level would pay 140 percent of the standard risk rate.
The bill further provides for funding of those discounts through certain penalties relating to clean claims under the Insurance Code. This bill applies only to premium rates for coverage through the Texas Health Insurance Pool under Chapter 1506, Insurance Code, as amended by this bill, that is in effect on or after January 1, 2011, and the penalties provisions with respect to clean claims are applicable to those claims paid on or after January 1, 2010.
HB 2256 by Hancock, et al.; Sponsored by Duncan (Effective immediately – June 19, 2009)
HB 2256 relates to mediation of out-of-network health benefit claim disputes concerning enrollees, facility-based physicians, and certain health benefit plans. It also provides for administrative penalties and requires rulemaking by the Commissioner, the Texas Medical Board, and the chief administrative law judge of the State Office of Administrative Hearings. The bill provides that mediation is mandatory upon request by an enrollee if the enrollee’s payment responsibility to a facility-based physician is greater than $1,000 (after copayments, deductibles, and coinsurance, including amounts unpaid by the administrator or insurer) and the health benefit claim is for medical service or supply provided in a contracted or preferred provider hospital. The bill also requires rulemaking regulating the investigation and review of a complaint relating to the settlement of an out-of-network health benefit claim and adopting network adequacy standards.
HB 2456 by Eiland; Sponsored by Watson (Effective immediately – June 19, 2009)*
HB 2456 relates to supplementary agent qualifications to sell complex insurance products and allows the Commissioner to adopt rules requiring agent training or demonstration of knowledge before an agent may sell such complex products. The Commissioner may accept an examination administered by a testing service under Chapter 4002 of the Insurance Code to satisfy an examination requirement that is required by Commissioner rule under the new law.
HB 2569 by Hancock; Sponsored by Eltife (Effective September 1, 2009)
HB 2569 amends the Insurance Code specialty agent licensing statute to create a “portable electronic vendor license” in place of a “telecommunications equipment vendor license.” The bill defines “portable electronic device,” grants the Commissioner authority to establish an annual licensing fee not to exceed $5,000, and grants the vendor of a portable electronic device authority to act as an agent for an insurer in connection with the sale and use of portable electronic devices and related services. The bill also specifies who is qualified to provide required training to individuals who act on the license holder’s behalf. Further, the bill requires the Commissioner to establish a procedure by rule under which a person holding a telecommunications equipment vendor specialty agent license prior to the amendments may convert the license to a portable electronic device vendor specialty agent license without further qualification.
HB 3221 by Hancock; Sponsored by Van de Putte (Effective immediately – June 19, 2009)
(See bill summary above, under Auto/Property/ Home, page 3)
HB 3762 by Flynn; Sponsored by Deuell (Effective September 1, 2009 with some provisions effective June 1, 2010)
HB 3762 amends the Finance Code to make several changes relating to the regulation of prepaid funeral benefits. Among the changes are new examination authority of the Texas Department of Banking of permit holders (those who sell or solicit prepaid funeral benefits under contract or other investment); pre-sale disclosure requirements for sellers or their agents; establishment by the Texas Department of Banking of an internet website containing prepaid funeral benefits information; new requirements for insurance policies (including a disclosure notice regarding cancellation); establishment of an advisory committee by the Commissioner of Banking, on which committee the Commissioner of Insurance, upon request by the Banking Commissioner, may appoint a representative of TDI to serve; and provisions for guaranty fund assessments of sellers and permit holders of insurance-funded and trust-funded contracts. The bill also amends the Insurance Code to allow a previously-approved insurance policy form to be modified with the required disclosure notice regarding cancellation without going through the form approval process. The new requirements for the insurance policy forms apply only to an insurance policy that is delivered, issued for delivery, or renewed on or after January 1, 2010.
HB 4290 by Smithee; Sponsored by Duncan (Effective September 1, 2009)*
HB 4290 amends current law relating to retrospective utilization review and utilization review to determine the experimental or investigational nature of a health care service. The bill requires an independent review of a carrier's conclusion that a treatment should be denied because it is experimental or investigational. In addition, the bill provides for an independent review of a carrier's conclusion after the fact that a treatment was not medically necessary. The bill applies to a health benefit plan delivered, issued for delivery, or renewed on or after January 1, 2010.
HB 4341 by Truitt; Sponsored by Shapiro (Effective September 1, 2009 with some provisions effective April 1, 2010)
HB 4341 provides for regulation by TDI of discount health care programs – arrangements in which an entity, in exchange for fees, dues, or other consideration, offers its members access to discounts on health care services provided by health care providers. The bill contains provisions relating to advertising, marketing, examination by TDI, and enforcement and penalties. It further requires registration with TDI by discount health care program operators as a condition to offering such programs in this state, with rules to be adopted by the Commissioner not later than January 1, 2010.
HB 4402 by Martinez Fischer, et al.; Sponsored by Van de Putte (Effective September 1, 2009)
HB 4402 requires TDI to conduct a study to evaluate the ways in which pharmacy benefit managers use prescription drug information to manage therapeutic drug interchange programs and other drug substitution recommendations made by pharmacy benefit managers or other similar entities. The study must include certain information on practices of pharmacy benefit managers relating to intervening in the delivery or transmission of a prescription, recommending or changing prescriptions, etc. The bill also provides that not later than August 1, 2010, TDI shall submit to the Governor, the Lieutenant Governor, the Speaker of the House of Representatives, and the appropriate standing committees of the Legislature a report regarding the results of the study, together with any recommendations for legislation.
HB 4519 by Homer; Sponsored by Deuell (Effective September 1, 2009)
HB 4519 amends the Insurance Code to require that the Commissioner, in addition to the standards currently required and adopted regarding independent review organizations (IROs), adopt standards and rules that place certain restrictions on the ownership and operation of an IRO; that prohibit an attorney who is, or has in the past served as, the registered agent for an IRO from representing the organization in legal proceedings; and that prohibit an IRO from disclosing confidential patient information, except to a provider who is under contract to perform the review. The standards and rules must also require an IRO to be based and certified in Texas and to locate its primary offices in the state, and to meet certain other certification requirements.
SB 78 by Nelson; Sponsored by Smithee (Effective September 1, 2009)
SB 78 establishes new health insurance initiatives. The bill creates the TexLink to Health Coverage Program at TDI to promote awareness and education about the purchase and availability of health coverage. It further establishes a Healthy Texas Program through which small employer health insurance would be offered to eligible persons. The feasibility of the Healthy Texas Program was based on a study conducted by TDI as required by SB 10 (Nelson, Delisi) from the 80th Legislative Session. The Commissioner is required to adopt rules necessary to implement the program not later than January 4, 2010, and to ensure that the Healthy Texas Program is fully operational in a manner that allows health benefit plan issuers participating in the program to make the first annual request for reimbursement on January 1, 2011.
SB 79 by Nelson; Sponsored by Smithee (Effective September 1, 2009)
SB 79 requires TDI to establish a voluntary specialty certification program for individuals who market small employer health benefit plans in accordance with the Texas Health Insurance Portability and Availability Act (Chapter 1501 of the Insurance Code). The bill sets out the qualifications for receiving the certification and specifies the initial training that is required of individuals seeking certification, with certain exceptions. The bill also provides for the renewal of the certification every two years by completing certain continuing education requirements and allows each hour of education to obtain or renew a specialty license to be used to satisfy an hour of continuing education otherwise applicable to the agent under the specified title of the Insurance Code. The bill requires that to hold a specialty certification, an individual must agree to market small employer health benefit plans to certain employers without regard to the number of employees to be covered under the plan, and authorizes a certified individual to advertise, in the manner specified by TDI rule, that the individual is specially trained to serve small employers. TDI is also required to maintain and publish on its website a list of all individuals who hold a specialty certification, together with certain contact and descriptive information. The bill specifies that not later than January 1, 2010, TDI may begin issuing the specialty certifications as added by this bill.
SB 381 by Van de Putte; Sponsored by Hopson (Effective September 1, 2009)
SB 381 authorizes a physician to delegate the implementation or modification of a patient's drug therapy, including the authority to sign a prescription drug order for dangerous drugs, to a qualified pharmacist if certain conditions are met. The bill requires the Texas State Board of Pharmacy to provide on its Internet website a list of pharmacists authorized to sign prescriptions and the name of the pharmacist's delegating physician.
SB 698 by Ellis; Sponsored by Thompson (Effective September 1, 2009)
SB 698 requires the Commissioner to establish a registry of each legal entity engaged in the insurance business in Texas that, formally or informally, has entered into an agreement with TDI that disposes of allegations of race-based pricing and under which all or part of the relief agreed on to make insureds whole includes a claims-made offer that remains in place and has not otherwise expired under the terms of the agreement. The bill also requires the registry to be prominently published on the TDI website and further provides for preservation of the records and delivery to the state archivist on completion of the investigation but not later than January 15, 2011. The state archives shall use best efforts to preserve and catalogue the records and make them available to the public as soon as appropriate, but not later than January 15, 2015.
SB 865 by Harris; Sponsored by J. Jackson (Effective immediately – June 19, 2009 with some provisions effective September 1, 2009 and Jan. 1, 2010)
SB 865 is an omnibus bill regarding child support enforcement and disbursement and health care coverage for children in Title IV-D cases. Among its provisions is a requirement that the Title IV-D agency, in consultation with TDI, the Health and Human Services Commission, and representatives of the insurance industry in Texas, develop and implement a statewide program to address the health care needs of children in Title IV-D cases for whom health insurance is not available to either parent at reasonable cost through a parent’s employment or membership in a union, trade association, or other organization.
SB 872 by Lucio; Sponsored by Menendez (Effective immediately – May 19, 2009)
SB 872 provides for continued health insurance coverage and financial assistance for eligible survivors of certain public servants killed in the line of duty. Among the provisions are required notices by an employing entity and that an eligible survivor may not be required to pay a premium amount for the coverage that is greater than the premium amount that a current employee of the employing entity without a spouse is required to pay to cover the employee alone or to cover the employee and the employee's dependent children, as applicable to the eligible survivor. The bill also contains a limited opportunity (expires September 1, 2010) for eligible survivors to reapply for coverage that is applicable only to an eligible survivor of a deceased peace officer, state or county jailer or guard, or certain firefighters employed by political subdivisions who died on or after September 1, 1993.
SB 963 by Ellis; Sponsored by Smithee (Effective September 1, 2009)*
SB 963 requires review and approval or disapproval of long-term care premium rates and is applicable to any rate increase implemented on or after September 1, 2009. An insurer who obtains the Commissioner’s approval of an increase of a long-term care premium rate must notify policyholders of the scheduled rate increase at least 45 days prior to the date that the policyholder is required to make a premium payment at the increase rate and provide contingent nonforfeiture benefits consistent with nationally recognized models and rules adopted by the Commissioner.
SB 1143 by Carona; Sponsored by Thompson (Effective September 1, 2009)
SB 1143 requires insurers and health maintenance organizations (HMOs) to insert a statement into monthly bills notifying a group policyholder or contract holder of their liability for premiums on all enrollees until notification of termination is received by the insurer or HMO. If bills are other than monthly, the notification shall be periodically in the manner prescribed by Commissioner rule. These changes apply only to a contract entered into or renewed on or after January 1, 2010. The bill also requires a Texas Health Benefits Study on the disparity in patient copayments between orally and intravenously administered chemotherapies, the reasons for the disparity, and the patient benefits in establishing copayment parity between oral and infused chemotherapy agents. A report of the results of the study and any recommendation for legislation must be submitted to the Governor, Lieutenant Governor, Speaker of the House of Representatives, and the appropriate standing committees of the Legislature not later than August 1, 2010.
SB 1291 by Van de Putte; Sponsored by Martinez Fischer (Effective September 1, 2009)
SB 1291 amends the requirements regarding access to licensed professional counselors and marriage and family therapists by removing the ability of a health insurance policy to require that these services be recommended by a physician. The bill applies only to an insurance policy or contract or evidence of coverage that is delivered, issued for delivery, or renewed on or after January 1, 2010.
SB 1403 by Averitt; Sponsored by Smithee (Effective September 1, 2009)
SB 1403 changes the name of the Texas Health Insurance Risk Pool to the Texas Health Insurance Pool and further amends provisions regarding eligibility for coverage, pre-existing condition periods, and waiting periods applicable to creditable coverage. This bill applies only to an application for initial or renewal coverage through the Texas Health Insurance Risk Pool under Chapter 1506, Insurance Code, as amended by this bill, that is filed with the pool on or after January 1, 2010.
SB 1479 by Carona; Sponsored by Taylor (Effective immediately – May 27, 2009)
SB 1479 exempts certain types of insurance plans, including specified disease or individual limited benefit policies, dental or vision care policies, disability income insurance, workers’ compensation insurance, long-term care insurance (including nursing home fixed indemnity), occupational accident policies, etc. from provisions of Subtitle E, Title 8, Insurance Code (concerning benefits payable under health coverages), where the provisions become effective on or after January 2, 2010. An exception is for specific language effective on or after Jan. 2, 2010 that applies to a plan that provides coverage only for a specified disease or diseases or under an individual limited benefit policy, for accidental death or dismemberment, as a supplement to a liability insurance policy, or for dental or vision care. The bill also provides that a long-term care insurance policy, including a nursing home fixed indemnity policy, is subject to the mandates if the Commissioner determines that the policy provides benefits so comprehensive that it is a health benefit plan and should not be subject to the exemption.
SB 1771 by Duncan; Sponsored by Eiland (Effective immediately – June 19, 2009)
SB 1771 extends the state continuation coverage periods (for individuals only eligible for state continuation) from six months to nine months that allow workers and their dependents the option to retain coverage under the company’s health insurance plan for a period of time. For individuals eligible for COBRA continuation, the bill clarifies that up to six months of state continuation can be elected following COBRA coverage. COBRA is the federal Consolidated Omnibus Budget and Reconciliation Act of 1985. The bill also provides for a temporary extension of election period for continuation of coverage for certain eligible individuals (this extended election period is only available for individuals who were involuntarily terminated, except for cause, between September 1, 2008 and February 16, 2009).
SB 1967 by Carona; Sponsored by Chavez (Effective September 1, 2009)
(See bill summary above, under Auto/Property/ Home, page 4)
SB 2423 by Deuell; Sponsored by Gonzalez Toureilles (Effective September 1, 2009)
SB 2423 amends current law relating to the definition of “discount health care program” and “discount health care program operator” to include certain programs or operators who are granted access to patient information. The bill adds a new chapter to the Insurance Code that requires discount health care program operators, before enrollment, to provide prospective members with disclosure materials containing the operator’s policy regarding access to patient information or patient
prescription drug histories if the program operator engages in the transfer or sale of a member’s patient information or patient prescription drug history. The bill provides for penalties for a violation of the new chapter.
State Agencies/Enforcement and Compliance/Recodification
HB 4343 by Smithee; Sponsored by Fraser (Effective immediately – June 19, 2009)*
HB 4343 adds TDI to the list of agencies and entities that may have access to certain criminal history record information maintained by the Department of Public Safety. These agencies and entities are allowed to obtain complete information on an applicant in determining fitness for licensure or other qualification. Because of the trust insurance consumers place in insurance agents and companies, it is important that any criminal history be considered when determining whether to issue a license.
HB 4358 by Smithee; Sponsored by Fraser (Effective immediately – June 19, 2009)*
HB 4358 amends current law relating to rulemaking authority for administrative penalties assessed for violations of the Insurance Code. The bill authorizes the Commissioner to adopt and enforce reasonable rules necessary to accomplish the purposes of provisions relating to administrative penalties, allowing the resolution of more types of violations through fines and the use of staff resources more efficiently. The bill also provides that it does not limit the Commissioner's authority to take any action authorized by law.
HB 4359 by Smithee; Sponsored by Duncan (Effective immediately – June 19, 2009)*
HB 4359 amends current law regarding the Commissioner’s coordination of TDI’s market analysis and examination efforts with other states. The bill requires the registration with TDI and the providing of certain information by contract examiners with whom another state contracts to perform any market analysis or examination initiated by the other state of an insurer domiciled in Texas or a licensed managing general agent of an insurer.
HB 4461 by Smithee; Sponsored by Carona (Effective immediately – June 19, 2009)*
HB 4461 amends the Insurance Code to provide for the confidentiality of investigation files. The bill states that information or material acquired by TDI that is relevant to an investigation is not a public record for the period that TDI determines is relevant to further or complete an investigation.
SB 1303 by Seliger; Sponsored by P. King (Effective September 1, 2009)
SB 1303 requires a state or local governmental entity that employs one or more peace officers to designate a firearms proficiency officer and requires each peace officer the entity employs to demonstrate weapons proficiency to the firearms proficiency officer at least annually.
SB 1969 by West; Sponsored by Leibowitz (Effective September 1, 2009 with some provisions effective September 1, 2010)
SB 1969 is the culmination of the non-substantive revision of the Texas Insurance Code. This general code update bill non-substantively codifies laws that should be included in previously enacted codes, appropriately renumbers duplicate official citations, corrects enacted codes to conform the codes to the source law from which they were derived, and revises codes or parts of codes enacted during the preceding legislative session to incorporate enactments of that session.
SB 2298 by Watson; Sponsored by Farabee (Effective immediately – June 19, 2009)*
SB 2298 amends the merit eligibility and compensatory time payment limitations for certain state employees concerning work directly related to a disaster or emergency and the employee’s performance during a natural disaster or other extraordinary circumstance. Authorization must come from the administrative head of the agency. The bill allows an employee to accumulate compensatory time for hours worked during any calendar week at the employee’s personal residence if the employee obtains the advance approval of the agency’s head or designee. The bill also contains salary provisions for retired judges presiding over multiple district litigation.
State Fire Marshal
HB 3866 by Naishtat, et al.; Sponsored by Watson (Effective September 1, 2009)
HB 3866 provides that on or after September 1, 2011, only an individual certified by the Texas Commission on Fire Protection as a fire inspector may conduct a fire safety inspection required by a state or local law, rule, regulation, or ordinance. The bill also provides that effective September 1, 2009, a fire safety inspection required by a state or local law, rule, regulation, or ordinance must be conducted in accordance with the most recent local fire code or the most recent fire code adopted by the state fire marshal. These provisions do not apply to state agency personnel who conduct a life safety code survey of a building or facility in connection with determining whether to issue or renew a license for certain health and adult day care facilities.
HB 4560 by Naishtat; Sponsored by Deuell (Effective September 1, 2009)
HB 4560 requires that a firefighter or emergency medical technician who is exposed to Methicillin Resistant Staphylococcus Aureus (MRSA) is entitled to receive notification of the exposure in the manner prescribed by the Texas Board of Health under the Health and Safety Code.
SB 1410 by M. Jackson; Sponsored by Gutierrez (Effective September 1, 2009 with some provisions effective June 1, 2010)
SB 1410 provides that a person may not engage in the installation of a multipurpose residential fire protection sprinkler system that uses a single piping system to provide potable water for fire protection sprinklers and for domestic plumbing fixtures and appliances unless the person is licensed as a master plumber or journeyman plumber and holds an endorsement issued by the Texas State Board of Plumbing Examiners. The bill requires the Board of Plumbing Examiners to collaborate with the State Fire Marshal in adopting rules under this provision. The bill also restricts a municipality from requiring the installation of a multipurpose residential fire protection sprinkler system or any other fire sprinkler protection system in a new or existing one- or two-family dwelling, but a municipality may allow a multipurpose residential fire protection sprinkler specialist or other contractor to offer, for a fee, the installation of a fire sprinkler protection system in a new one- or two-family dwelling.
HB 652 by Darby; Sponsored by Eltife (Effective September 1, 2009)
HB 652 allows an individual residing in a state adjacent to the state of Texas to be licensed as an escrow officer but who must also be a bona fide employee of a title insurance agent or direct operation with an office in this state and whose bond or deposit must be in the amount of $10,000. The bill further provides that a person qualified as an escrow officer may hold a license and operate as a notary public under Chapter 406 of the Government Code. This bill applies to an application to act as an escrow officer that is filed with TDI on or after September 1, 2009.
HB 2353 by Hughes; Sponsored by Estes (Effective September 1, 2009)
HB 2353 amends the Insurance Code provision regarding statutes applicable to title insurance companies to include Section 81.001, concerning the limitations period for certain disciplinary actions. This change in law applies only to an action that TDI begins under Section 81.001 on or after September 1, 2009.
HB 3073 by Geren; Sponsored by Fraser (Effective January 1, 2010)
HB 3073 provides that a title insurance company, title insurance agent, or direct operation may charge, separate from the title insurance premium, actual costs or a reasonable estimate of costs incurred in connection with a closing and settlement, including a charge by a third party for an electronic filing fee or a fee of a third party for the provision of an ad valorem tax report. The bill applies only to a real property transaction that closes on or after January 1, 2010.
HB 3768 by Paxton; Sponsored by Wentworth (Effective September 1, 2009)
HB 3768 relates to the continuation of title insurance coverage on transferred property. The bill provides that for an owner's title insurance policy on residential real property that is issued to an individual, the Commissioner shall adopt terms that provide for continuation of coverage subject to rights and defenses against the original named insured for certain recipients of the title to the property of the original named insured, such as persons receiving title through inheritance or divorce or trust transfer. The bill applies only to an insurance policy or contract that is delivered, issued for delivery, or renewed on or after January 1, 2010.
HB 3945 by Orr; Sponsored by Watson (Effective September 1, 2009)
HB 3945 provides procedures to allow a title insurance agent to file an affidavit as a release of lien. This bill amends existing procedures currently applicable to underwriters under certain circumstances. This change in law applies only to an affidavit filed on or after September 1, 2009.
HB 4338 by Smithee; Sponsored by Fraser (Effective September 1, 2009)
(See bill summary above, under Financial, pg. 6)
HB 673 by Solomons; Sponsored by Watson (Effective September 1, 2009)**
HB 673 allows the Office of Injured Employee Counsel (OIEC) to refuse to provide or to terminate services to injured workers who are abusive or violent or threaten an employee of OIEC. It also clarifies OIEC's authority to assist injured workers before the TDI-Division of Workers’ Compensation or the State Office of Administrative Hearings (SOAH) in administrative dispute proceedings and in enforcement actions against injured employees. It authorizes the OIEC Public Counsel to adopt, with consultation with the Commissioner of Workers' Compensation, the injured workers' rights and responsibilities, which will continue to be distributed by the Division. Finally, HB 673 clarifies OIEC's access to confidential information for the performance of its statutory duties.
HB 1058 by Solomons; Sponsored by Lucio (Effective September 1, 2009) **
HB 1058 extends death benefits to non-dependent parents who do not receive burial benefits and clarifies that a failure to file a claim for death benefits in the time required bars the claim unless good cause exists for the failure to file a claim under this section. Previously, the standard for failing to file for these benefits within the statutory timeframe required a “compelling reason.”
HB 2547 by Giddings; Sponsored by Deuell (Effective September 1, 2009)
HB 2547 allows a treating doctor to request job description information from an injured worker’s employer and requires the Commissioner of Workers’ Compensation to prescribe a form to be used to identify the scope and functions the worker performed prior to the injury as well as a contact person for the employer. The purpose of this legislation is to facilitate communication between employers and treating doctors regarding the availability of alternate duty or other return-to-work options for the injured worker. The legislation applies to employees of an employer with 10 or more employees.
HB 3625 by Elkins; Sponsored by Van de Putte (Effective September 1, 2009)
HB 3625 changes the timeframe for an insurance carrier to respond to a request for preauthorization from three calendar days to three working days, which conforms the preauthorization timeframes for network and non-network claims.
HB 4545 by Raymond; Sponsored by Van de Putte (Effective September 1, 2009)
HB 4545 changes the timeframe for a party to dispute a decision by the TDI-Division of Workers’ Compensation (Division) Appeals Panel to district court. The effect of the bill is to change the current 40 days to essentially 50 days from the date the decision was filed with the Division. The actual language in the bill requires a request for judicial review to be filed not later than the 45th day after the date the decision was mailed by the Division to the party; however, additional language was added that for the purposes of this section, the mailing date is considered to be the fifth day after the date the decision of the appeals panel was filed with the Division, giving a party up to 50 days, rather than 40 days to seek judicial review.
SB 1814 by Van de Putte; Sponsored by Deshotel (Effective immediately – June 19, 2009)***
SB 1814 extends a pilot program that was created by HB 7 in the 79th Legislative Session to allow small employers to be reimbursed for making workplace modifications to help return an injured employee to work. The bill increases those reimbursements to up to $5,000 annually and allows the Commissioner of Workers’ Compensation to extend these reimbursements to other categories of employers as needed. Additionally, this bill clarifies an insurance carrier’s statutory responsibility to provide return-to-work coordination services on an ongoing basis when an employer’s injured employee begins to lose time away from work and requires insurance carriers to notify their policyholders regarding the availability of the TDI-Division of Workers’ Compensation employer return-to-work reimbursement program.
* Bill originated from a legislative recommendation by TDI
** Bill originated from a legislative recommendation by the Office of Injured Employee Counsel.
*** Bill originated from a legislative recommendation by the TDI-Division of Workers' Compensation.
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Last updated: 01/23/2014