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You are here: Home . rules . 2002 . 1125c-059
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Subchapter M. Regulatory Fees

28 TAC §7.1301 & 7.1302

The Texas Department of Insurance proposes amendments to §7.1301 and proposes to add new §7.1302 concerning the establishment of a billing system for certain filings. This rule proposal is necessary to permit the establishment and implementation of a new billing system for certain filings submitted under Chapters 3 and 11 of this title. The current system of submitting fees for filings requires that fee(s) be submitted along with the filing. Upon adoption of new §7.1302 and implementation of a billing system, the fee(s) will no longer be required to be submitted with the filing; instead, the regulated entity submitting the filing will be billed by itemized invoice from the department. Proposed new §7.1302 is necessary to streamline the collection and receipt of filing fees. The billing system will reduce the process of refunding fee amounts received in excess of the actual fee amount and eliminate the need to reject filings due to insufficient fee amounts.

To permit the establishment of a billing system, proposed new §7.1302 addresses, among other things, the mailing of invoices on a periodic basis for filings received and amounts billed, and billing addresses and billing contact persons for regulated entities submitting filings, including requirements for notifying the department of a change of billing address or billing contact person information. The proposed new section also addresses departmental handling of filing fee account balances, including filing fee accounts with invoice amounts past due and the placement of a hold on a filing fee account for any invoice amount past due 120 days or more.

Upon completion of the development and design of the billing system, the department will issue a commissioner's bulletin to notify regulated entities affected by the billing system of the date of its official implementation and of the date when they should cease submitting filing fee(s) along with certain filings to the department.

Because of the implementation of the billing system proposed by §7.1302, amendments are required in §7.1301 of this subchapter. Express fee amounts for certain filings will no longer be specified in §7.1301; rather, they will be addressed in amendments proposed under Chapter 3, Subchapter A. Therefore, express references to certain of those filings need to be deleted from this subchapter. The amendments to Chapter 3, Subchapter A are proposed elsewhere in this issue of the Texas Register.

Angelia Johnson, Deputy Commissioner, Filings Intake Division, Life, Health and Licensing Program, has determined that for each year of the first five years the proposed sections are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed sections. There will be no effect on local employment or the local economy.

Ms. Johnson has determined that for each year of the first five years the proposal is in effect, the anticipated public benefits will be a more efficient and effective use of the department´s resources because staff will spend significantly less time handling fees, issuing refunds for overpayments, and rejecting filings submitted with an incorrect filing fee. Additional public benefits will include a reduction in the amount of paperwork and time spent by regulated entities issuing checks in payment of fees with each filing by enabling them to submit a single payment for numerous filings, versus a separate payment for each filing, thereby decreasing the regulated entities' staff's time preparing and submitting filing fees, and decreasing the expense of issuing multiple payments to the department. Ms. Johnson has determined that there will be no economic costs associated with having to comply with the proposal because the proposal will actually have the effect of reducing the costs of compliance. It is the department´s position that the proposal will not have an adverse economic effect on small businesses or micro-businesses. Regardless of the fiscal effect, it is neither legal nor feasible to waive or modify the requirements of the proposal for small and micro-businesses because the billing system needs to be consistent for all regulated entities.

To be considered, written comments on the proposal must be submitted no later than 5:00 P.M. on January 6, 2003 to Gene C. Jarmon, Acting General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas, 78714-9104. An additional copy of the comments should be simultaneously submitted to Bill Bingham, Deputy for Regulatory Matters, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. A request for public hearing on the proposal should be submitted separately to the Office of the Chief Clerk.

The sections are proposed pursuant to Insurance Code Articles 3.42, 3.53, 20A.22, 20A.32, and §36.001. Insurance Code Article 3.42(p) provides that the commissioner is authorized to adopt such reasonable rules that are within the standards and purposes of Article 3.42, and necessary to implement and accomplish the specific provisions of Article 3.42. Insurance Code Article 3.53, §7(H) authorizes the department to charge a fee for forms or schedules filed under the article in an amount to be determined by the department. Insurance Code Article 20A.22 provides that the commissioner may promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the HMO Act. Insurance Code Article 20A.32 requires that the expenses for filing fees for every organization subject to Chapter 20A of the Insurance Code shall be paid in accordance with rules adopted by the commissioner. Insurance Code §36.001 authorizes the commissioner of insurance to adopt rules for the conduct and execution of the powers and duties of the department as authorized by statute.

The following Articles are affected by the proposal: Articles 3.42; 3.53, 20A.22, and 20A.32.

§7.1301. Regulatory Fees.

(a) Regulated entities subject to fees. The regulated entities subject to the fees imposed by this section shall include all authorized insurers writing any class of insurance in this state which are regulated by the Insurance Code, Chapters 1-3, 6-20, 20A, 22, and 23. For filings and other actions received by the department on and after April 1, 2003 [ September 1, 1987], the Texas Department of Insurance shall charge these entities fees in amounts in accordance with the provisions of this section. Filings or other actions received by the department on or before April 1, 2003, shall be governed by this subchapter as it existed immediately prior to April 1, 2003.

(b) (No change.)

(c) Fees for specified filings pursuant to the Insurance Code, Article 3.42. Fees for specified filings pursuant to the Insurance Code Article 3.42 are set forth in Chapter 3, Subchapter A of this title (relating to Submission Requirements for Filings and Departmental Actions Related to Such Filings) and shall be governed thereby. [ For the following filings, the fees shall be as follows.]

[ (1) For filing policy forms, amendments, endorsements, and riders for review, the fee shall be $100.]

[ (2) For filing policy forms, amendments, endorsements, and riders exempt from review, the fee shall be $50.]

(d) ­ (h) (No change.)

(i) Fees for filings pursuant to the Insurance Code, Article 3.53. Fees for filings pursuant to the Insurance Code Article 3.53 are set forth in Chapter 3, Subchapter A of this title and shall be governed thereby. [ The fee for filing credit life and credit accident and health forms and premium rate schedules shall be $100.]

(j) (No change.)

§7.1302. Billing System.

(a) The following regulated entities shall be subject to the billing system established by this section:

(1) regulated entities submitting filings requiring a fee pursuant to §§3.1, et seq, of this title (relating to Scope); and

(2) regulated entities submitting filings requiring a fee pursuant to §11.301(4)(A), (B), and (L) and (5)(C), (G), (K), (M), and (N) of this title (relating to Filing Requirements).

(b) As of the effective date of this section, the department shall, as soon as practical and possible, implement a billing system whereby each regulated entity identified in subsection (a) of this section will be billed by invoice.

(c) The department shall mail the invoice to the regulated entity´s last billing address on file with the Filings Intake Division of the Texas Department of Insurance, and shall include the name of the billing contact person and an itemization of all filings and fee amounts for which the processing of the form has been completed (e.g., approved, disapproved, withdrawn, or exempted).

(d) If there is a change to a regulated entity´s billing address or billing contact person, the regulated entity shall submit written notification of the change to the Texas Department of Insurance, Filings Intake Division, Mail Code 106-1E, P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas 78701, or by emailing LifeHealth@tdi.texas.gov .

(e) An invoice issued by the department shall become due and payable upon receipt by the designated billing contact person.

(f) In the event an invoice becomes past due 120 days or more, the department shall place a hold on the regulated entity´s filing fee account with the department. The department may elect not to place a hold on a regulated entity´s filing fee account if, as determined by the department, extenuating circumstances exist beyond the control of the regulated entity which impede the regulated entity´s ability to pay an overdue amount (e.g., natural disasters, etc.).

(g) If a hold is placed on a regulated entity´s filing fee account pursuant to subsection (f) of this section, the regulated entity shall be subject to the following:

(1) The regulated entity shall pay the amount past due 120 days or more plus any other filing fee amounts that have been billed and not paid, before the hold may be removed from the regulated entity´s filing fee account.

(2) Filings received prior to the date the hold is placed on the regulated entity´s filing fee account shall be processed in accordance with the requirements of §§3.1, et seq. of this title, and §11.301 of this title until the processing of the form has been completed (e.g., approved, disapproved, withdrawn, or exempted).

(3) Filings received by the department on or after the date the hold is placed on the regulated entity´s filing fee account shall be rejected by the department and shall not be accepted until all filing fee amounts for which an invoice has been issued are paid and cleared, and the hold is removed.

(h) A filing fee is not required to be attached to a filing submitted on or after the implementation of the billing system established by this section. Any filing fee submitted with a filing shall be credited to the regulated entity´s filing fee account with the department.



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