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You are here: Home . rules . 2002 . 1125e-059
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Subchapter F. Summary Procedures for Routine Matters

28 TAC §§1.702-1.705

The Texas Department of Insurance proposes amendments to §§1.702 - 1.705 concerning activities related to summary procedures for routine matters. The proposed amendments are necessary to update Subchapter F to reflect the restructuring of the department´s divisions, statutory changes, and technological advancements regarding communication between the department and persons affected by these routine matters. Section 36.102 of the Texas Insurance Code permits the commissioner by rule to create a summary procedure for certain routine matters. This subchapter sets forth those activities that have been designated by the commissioner as routine because they are voluminous, repetitive, believed to be noncontroversial, and of limited interest to persons other than those immediately involved or affected.

Proposed amendments to §1.702 set forth the activities designated for summary procedure disposition. Among other things, these amendments add viatical and life settlement certificates of registration, utilization review and independent review organization certificates, and third-party administrator certificates of authority to the list of designated forms and filings and licenses, certificates, or registrations, as applicable. The proposed amendments also eliminate outdated references to Insurance Code Chapter 5, Subchapter B, (a) rates; Chapter 5, Subchapter B, excess rate or umbrella; excess inland marine; and cessation of acceptance of workers´ compensation of small premium policies. Due to statutory changes, (a) rates are no longer accepted, personal umbrella rates are subject to prior approval, and commercial umbrella rates are submitted as file and use. In House Bill 2 (72nd Legislative Session, 1991) the Texas legislature deregulated commercial property and general liability insurance rates, and in Board Order No. 59970 (1992), the former State Board of Insurance re-designated the status of the rates to "standard" from "approved standard and uniform." The department no longer approves standard and uniform rates and Insurance Code Article 5.26 provides for rates in excess of the promulgated rate, making the language in §1.702 regarding "excess of´´ no longer applicable. Article 5.65-2, which among other things contained provisions regarding the workers´ compensation small premium policy plan, was repealed effective December 31, 1993.

The proposed amendments to §1.703 delegate the various activities listed in §1.702 to the appropriate associate or deputy commissioner within the department responsible for summary procedure disposition of those activities. These proposed amendments reflect a restructuring of various divisions within the department and assignment of responsibilities for certain functions, including the regulatory functions regarding health maintenance organizations, which is delegated in part to the Financial Program and in part to the HMO Division. Language was also added to recognize that, in the event of such a restructuring of the department in the future, the delegation of the administration over the activities will follow the appropriate associate or deputy commissioner assuming responsibility for the activities. The proposed amendments to this section also delete language referencing the filings for which the deputy commissioner of property insurance was delegated responsibility because they were previously deleted pursuant to Board Order No. 59970 (1992). The proposal also changes various references to the former state board of insurance to commissioner or department, as appropriate.

Proposed amendments to §1.704 add electronic transmission as another means of notifying a person of an action regarding a matter requiring final disposition by the department. The proposed amendments to this section also establish the procedure to be used by the department in notifying a person of a departmental action affecting the person. The proposed amendments to §1.705 correct the statutory references to the Insurance Code, and clarify how to file a petition for review.

Kim Stokes, Senior Associate Commissioner, Life, Health and Licensing Program, has determined that for each of the first five years the proposed sections will be in effect, there will be no fiscal impact on state or local governments as a result of enforcing or administering the proposal. There will be no measurable effect on local employment or local economy as a result of the proposal.

Ms. Stokes has determined that for each year of the first five years the sections are in effect, the public benefit anticipated as a result of administration and enforcement of the sections will be more efficient administrative regulation of entities regulated by the department, and more effective utilization of the department´s resources, ensuring more efficient and expeditious processing of routine matters requiring official action from the department or commissioner. The proposed amendments only impact the internal delegation of authority within the department and do not impose any requirements on persons or entities regulated by the department. As such, the rules will have no economic impact. The proposed amendments will have no adverse economic effect on small businesses or micro-businesses. Therefore, the department does not believe it legal or feasible to waive the requirements of the proposed amendments for small businesses or micro-businesses.

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 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 should be submitted separately to the Office of the Chief Clerk.

The sections are proposed pursuant to the Insurance Code §§36.102 and 36.001. Section 36.102 provides that the Commissioner of Insurance may, by rule, create a summary procedure for routine matters and designate department activities that otherwise would be subject to Chapter 2001, Government Code, as routine matters to be handled under summary procedure. Section 36.001 permits the commissioner to adopt rules for the conduct and execution of the powers and duties of the department as authorized by statute.

The following statutes are affected by this proposal: Insurance Code Articles 1.14-2, 3.42, 3.50-6A, 3.53, 3.70-12, 3.74, 3.75, 5.13, 5.13-1, 5.15, 5.77, 5.101, 9.35 - 9.38,

9.41 -9.45, 9.56, 9.58, 21.07 ­ 21.07-4, 21.07-6, 21.09, 21.11, 21.14, 21.58A, 21.58C; Chapters 20A, 23 and 26;§§36.102 ­ 36.103; and §§36.201 ­ 36.205.

§1.702. Designated Activities. The following statutorily prescribed activities [ applications] are designated for summary procedure disposition:

(1) Filings of forms, rates, and related filings pursuant to Insurance Code Articles 3.42; 3.50-6A; 3.70-12; 3.53; 3.74; 5.13-1; Chapters 23 and 26 ; and §3.3325(f) and (g) of this title (relating to Medicare Select Policies, Certificates, and Plans of Operation), but not withdrawals of approval pursuant to Insurance Code Articles 3.42, 3.53, 5.13-1, and Chapter 23. [ life, accident, or health insurance, health maintenance organization, or prepaid legal services forms or filings. Filings of life, accident, or health insurance policy form applications respecting approval or disapproval, but not withdrawal of approval, made pursuant to the Insurance Code, Article 3.42, filings of health maintenance organization evidence of coverage respecting approval or disapproval, but not withdrawal of approval, made pursuant to the Insurance Code, Article 20A.09, filings by health maintenance organizations for which approval is required under the Insurance Code, Article 20A.04(b), and filings of prepaid legal services forms respecting approval or disapproval but not withdrawals of approval pursuant to the Insurance Code, Articles 5.13-1, , and Chapter 23;]

(2) Filings of forms, rates, and related filings by health maintenance organizations pursuant to §11.301(4)(A), (B), and (L), and (5)(C), (G), (K), (M), and (N) of this title (relating to Filing Requirements), but not withdrawals of approval pursuant to Insurance Code Chapter 20A.

(3) Filings of forms, rates, and related filings by health maintenance organizations pursuant to §11.301 of this title, except those listed in paragraph (2) of this section, but not withdrawals of approval pursuant to Insurance Code Chapter 20A.

(4)[ (2)] [ licenses.] Filings of application or renewal for the following:

(A) agents and adjusters licenses pursuant to [ the] Insurance Code[ ,] Articles 1.14-2, 3.75, [ 9.35-9.38, 9.41-9.43, 9.56, 20A.15,] 21.07, 21.07-1, 21.07-2, 21.07-3, 21.07-4, 21.09, 21.11, 21.14, and 23.23, [ and] insurance premium finance licenses pursuant to [ the] Insurance Code[ ,] Article 24.03 , and third party administrator certificates of authority pursuant to Insurance Code Article 21.07-6;

(B) viatical and life settlement certificates of registration pursuant to Insurance Code Article 3.50-6A;

(C) utilization review agent certificates pursuant to Insurance Code Article 21.58A and §19.1704(g) and §19.2004 of this title (relating to Certification of Utilization Review Agents), and independent review organization certificates pursuant to Insurance Code Article 21.58C and §12.109 of this title (relating to Appeal of Denial of Application or Renewal); and

(D) licenses pursuant to Insurance Code Articles 9.35 - 9.38, 9.41 - 9.45, 9.56, and 9.58.

(5)[ (3)] [ auto individual risk submissions.] Applications to change rates, forms, or deductibles for motor vehicle insurance on an individual risk basis pursuant to Rule 4 in the Texas Automobile Rules and Rating Manual adopted under [ the] Insurance Code[ ,] Article 5.101.[ 5.01;]

[ (4) Subchapter B, (a) rates. Average (a) rate applications filed for the types of insurance specified in the Insurance Code, Articles 5.13 and 5.15-1, pursuant to the Insurance Code, Article 5.15;]

[ (5) Subchapter B, excess rate or umbrella. Excess rate or umbrella applications for the types of insurance specified in the Insurance Code, Article 5.13, filed pursuant to the Insurance Code, Article 5.15;]

(6) [ Subchapter B, consent to rate.] Applications to charge a rate or premium greater than the standard rate or premium approved by the commissioner [ board] for the types of insurance specified in [ the] Insurance Code[,] Article 5.13, pursuant to [ the] Insurance Code[ ,] Article 5.15(c) [ 5.15(d)].

[ (7) excess inland marine. Applications to write regulated lines under the Insurance Code, Article 5.53, at rates in excess of the standard and uniform rates that have been approved by the board pursuant to the Insurance Code, Article 5.53;]

(7)[ (8)] [ workers' compensation insurance negotiated deductible endorsement filings.] Filings of endorsements for [ respecting] negotiated deductible plans for workers' compensation insurance policies made pursuant to [ the] Insurance Code [ ,] Article 5.55C. [5.77;]

[ (9) cessation of acceptance of small premium policies. Requests for cessation of acceptance of small premium policies of workers' compensation insurance written through the Small Premium Policy Plan made pursuant to the Insurance Code, Article 5.76-2.]

§1.703. Delegation. The Commissioner [ State Board] of Insurance hereby delegates to the following associate or deputy commissioners administration over the activities [ filings] designated in paragraphs (1) - (7) [ (1)-(4)] of this section. In the event the names of certain divisions, titles, or positions within the department are changed due to consolidation or expansion of the department's activities or divisions, the delegation of the administration over the following activities will follow the appropriate associate or deputy commissioner assuming responsibility for the activity.

(1) Deputy commissioner for life/health [ life] insurance is responsible for activities listed in §1.702(1) and (4)(B) of this subchapter [ title] (relating to Designated Activities) [ life, accident, and health insurance, health maintenance organization, or prepaid legal services forms or filings and §1.702(2) of this title (relating to Designated Activities) certain licenses].

(2) Deputy commissioner for health maintenance organization is responsible for activities listed in §1.702(2) and (4)(C) of this subchapter.

(3) Senior associate commissioner for financial is responsible for activities listed in §1.702(3) of this subchapter.

(4) Deputy commissioner for licensing is responsible for activities listed in §1.702(4)(A) of this subchapter.

(5)[ (2)] Deputy commissioner for title [ of casualty] insurance is responsible for activities listed in §1.702(4)(D) of this subchapter.[ all of the following filings:]

[ (A) §1.702(3) of this title (relating to Designated Activities), auto individual risk submissions];

[ (B) §1.702(4) of this title (relating to Designated Activities), Subchapter B, (a) rates;]

[ (C) §1.702(5) of this title (relating to Designated Activities), Subchapter B, excess or umbrella; and]

[ (D) §1.702(6) of this title (relating to Designated Activities), Subchapter B, consent to rate].

[ (3) Deputy commissioner of property insurance is responsible for filings under §1.702(7) of this title (relating to Designated Activities), inland marine excess rate.]

(6) Associate commissioner for property and casualty insurance is responsible for activities listed in §1.702(5) - (6) of this subchapter.

(7)[ (4)] Deputy commissioner of workers' compensation insurance is responsible for activities listed in §1.702(7) [ §1.702(8)] of this subchapter[ title (relating to Designated Activities), workers' compensation insurance negotiated deductible endorsement filings and §1.702(9) of this title, requests for cessation of acceptance of small premium workers' compensation insurance policies written through the Small Premium Policy Plan].

§1.704. Summary Procedure; Notice.

(a) Actual notice for proposed negative action. In the case of proposed negative action with regard to any delegated activity designated under §1.702 of this subchapter [ title] (relating to Designated Activities), parties directly involved shall be given actual notice at least five days in advance of the action proposed. Actual notice means written or electronic notice . If the actual notice is a written notice, it will be sent by mail addressed to the last known address of the person [ applicant], or, if the person [ applicant] is represented by an attorney, to the person´s [ applicant's] attorney of record , as submitted with the filing, application, form, or submission that is the subject of the proposed negative action. If the actual notice is electronic, it will be sent electronically to the email address or to the electronic destination, as applicable, from which the person submitted the filing, application, form, or submission which is the subject of the proposed negative action. [ No notice is required in the case of affirmative action with regard to designated activities.]

(b) Notice of decision. For §1.702(1)-(7) [ §1.702(1) and (3)-(7)] of this subchapter [ title (relating to Designated Activities)], the appropriate associate or deputy commissioner shall notify the person by mail or electronic transmission of a positive or negative decision and the date of the decision, shall record the decision in the department's electronic files, and shall retain a record of the notification with the filing, application, form, or submission or cause [ record any decision by causing the appropriate filing, application, or form to be stamped either "approved by" or "disapproved by" (name of the appropriate deputy) deputy commissioner of insurance (appropriate division) and the date and by causing the decision to be recorded by a like stamp of a file copy, by a microfilm or microfiche copy, or by recording said decision in the agency´s computer files and causing said stamped filing, application, or form to be mailed to the applicant. For §1.702(2) of this title, the appropriate deputy commissioner shall indicate a positive decision by causing] the appropriate license , certificate, or registration to be mailed to the person [ applicant, and by causing the decision to be recorded in the agency's computer files. Notice of any proposed negative decision with respect to §1.702(3) §1.702(2) of this title shall be in accordance with subsection (a) of this section.]

§1.705. Review.

[ (a)] Any person affected by any action taken by an associate or deputy commissioner under [ §1.703(1) or (2) of] this subchapter [ title (relating to Delegation)] may petition the commissioner for a hearing to review the matter. The petition shall contain an identification of the matter complained of and a petitioner´s statement, including a rebuttal of the associate or deputy commissioner´s action[ decision] with specific [ sufficient] particularity to inform the commissioner and any interested persons of the petitioner´s reasons and arguments serving as the basis of the petition. The petition shall be filed with the Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104 [ hearings reporter]. The review shall be conducted [ de novo] pursuant to the Texas Administrative Procedure [ and Texas Register] Act. Any further relief sought is governed by [ the] Insurance Code § §36.201 - 36.205[ , Article 1.04].

[ (b) Any person affected by any action under §1.702(3)(7) of this title (relating to Designated Activities) may petition the Texas Department of Insurance for a hearing to review the matter. The petition shall contain an identification of the matter complained of and a petitioner´s statement, including a rebuttal of the deputy commissioner´s decision with specific particularity to inform the commissioner board and any interested persons of the petitioner´s reasons and arguments. The petition shall be filed with the Chief Clerk, Texas Department of Insurance. The review shall be pursuant to the Texas Register.]



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