The Texas Department of Insurance proposes an amendment to §25.88 concerning an assessment which will be used to cover the general administrative expense assessment of insurance premium finance companies. The amendment is necessary to adjust the rate of assessment which is sufficient to meet the expenses of performing the department's statutory responsibilities for examining, investigation, and regulating insurance premium finance companies. Under §25.88, the department levies a rate of assessment to cover the 2000 fiscal year´s general administrative expense and collects from each insurance premium finance company on the basis of a percentage of total loan dollar volume for the 1999 calendar year; however for the 2000 fiscal year the department has determined that collection of the $250 minimum assessment established in §25.88(2) from each insurance premium finance company will cover the 2000 fiscal year's general administrative expenses, therefore, the rate of assessment is proposed to be zero.
Karen A. Phillips, Chief Financial Officer for the department, has determined that for the first five-year period the proposed section will be in effect, the anticipated fiscal impact on state government will be income estimated at $69,500 to the state's general revenue fund. There is no fiscal implication for local government or employment or the local economy as a result of enforcing or administering the proposed amended section.
Ms. Phillips has determined that for each year of the first five years the amended section is in effect, the public benefit anticipated as a result of enforcing the section will be the facilitation in the collection of a minimum assessment to cover the general administrative expense connected to the regulation of insurance premium finance companies. The cost of the assessment to a premium finance company in 2000 will be $250. The actual cost of gathering the information required to fill out the form, calculate the assessment and complete the form will be the same for micro, small and large businesses based on the department´s experience. Generally a person familiar with the accounting records of the company and accounting practices in general will perform the activities necessary to comply with the section. Such persons are similarly compensated by micro, small and large insurers. The compensation is generally between $17-$30 an hour. The department estimates that the form can be completed in one hour since no calculation is necessary this year to comply with this section.
Comments on the proposal must be submitted in writing within 30 days after publication of the proposed section in the Texas Register to Lynda H. Nesenholtz, 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 Karen A. Phillips, Chief Financial Officer, Mail Code 108-1A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104.
The amendment is proposed under the Insurance Code, Articles 24.06(c), 24.09, and §36.001 (former Article 1.03A). Article 24.06(c) provides that each insurance premium finance company licensed by the department shall pay an amount assessed by the department to cover the direct and indirect cost of examinations and investigations and a proportionate share of general administrative expense attributable to regulation of insurance premium finance companies. Article 24.09 authorizes the department to adopt and enforce rules necessary to carry out provisions of the Insurance Code concerning the regulation of insurance premium finance companies. Section 36.001 authorizes the Commissioner of Insurance to adopt rules and regulations for the conduct and execution of the duties and functions of the department.
The following articles of the Insurance Code are affected by this section: Articles 24.05, 24.06, 24.08, 24.09, and 24.10.
§25.88.General Administrative Expense Assessment.
On or before April 1,
1999], each insurance premium finance company holding a license issued by the department under the Insurance Code, Chapter 24, shall pay an assessment to cover the general administrative expenses attributable to the regulation of insurance premium finance companies. Payment shall be sent to the Texas Department of Insurance, Examinations Division, Mail Code #305-2E, 333 Guadalupe , P. O. Box 149104, Austin, Texas 78701-9104. The assessment to cover general administrative expenses shall be computed and paid as follows.
(1)The amount of the assessment shall be computed as
.00558 of 1.0%] of the total loan dollar volume of the company for the calendar year
(2)If the amount of the assessment computed under paragraph (1) of this section is less than $250, the amount of the assessment shall be $250.