28 TAC §25.88
The Texas Department of Insurance proposes an amendment to §25.88 concerning an assessment which will be used to cover the general administrative expense of insurance premium finance companies. The amendment is necessary to adjust the rate of assessment so there are sufficient funds 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 department's 2004 fiscal year´s general administrative expense and collects the assessment from each insurance premium finance company on the basis of a percentage of total loan dollar volume for the 2003 calendar year.
The department will consider the proposed amendment to §25.88 in a public hearing under Docket No. 2580, scheduled for 9:30 a.m. on December 19, 2003 in Room 100 of the William P. Hobby Jr. State Office Building , 333 Guadalupe Street in Austin , Texas .
2. FISCAL NOTE. Karen A. Phillips, Chief Financial Officer, has determined that for the first five-year period the section is in effect, the anticipated fiscal impact on state government will be income estimated at $224,908 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 section.
3. PUBLIC BENEFIT/COST NOTE. 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 2004 will be .00679 of 1.0% of calendar year 2003 total loan dollar volume of the insurance premium finance company. The minimum cost for compliance based on assessment under the section is $250. There will be no difference in rates of assessment between micro, small and large businesses. Based on the department's experience, 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. 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 insurance premium finance companies. The compensation is generally between $17-$30 an hour. The department estimates that the form can be completed in two hours to comply with this section. The department does not believe it is legal or feasible to waive or modify the requirements of the proposed section for small and micro businesses because the assessment is required by statute and makes no provision for waiving or reducing assessments for small or micro-businesses.
4. REQUEST FOR PUBLIC COMMENT. To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on December 22, 2003 , to Gene C. Jarmon, 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 Karen A. Phillips, Chief Financial Officer, Mail Code 108-1A, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 . Any requests for a public hearing should be submitted separately to the Office of the Chief Clerk.
5. STATUTORY AUTHORITY. The amendment is proposed under the Insurance Code articles 24.06(c), 24.09, and §36.001. 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 costs of examinations and investigations and a proportionate share of general administrative expenses 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 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.
6. CROSS-REFERENCE TO STATUTE. The following articles of the Insurance Code are affected by this section: Articles 24.05, 24.06, 24.08, 24.09, and 24.10.
7. TEXT.
§25.88. General Administrative Expense Assessment.
On or before April 1, 2004[2003], 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 .00679 [.00787] of 1.0% of the total loan dollar volume of the company for calendar year 2003 [2002].
(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.