Subchapter E. Examinations and Annual Reports
28 TAC §25.88
1. INTRODUCTION. The Texas Department of Insurance proposes an amendment to §25.88 concerning an assessment which will be used to cover the general administrative expenses of the department's regulation of insurance premium finance companies. The amendment is necessary to adjust the rate of assessment to ensure that there are sufficient funds to meet the expenses of performing the department's statutory responsibilities for examining, investigating, and regulating insurance premium finance companies. Under §25.88, the department levies a rate of assessment to cover the department's general administrative expenses for fiscal year 2006 and collects the assessment from each insurance premium finance company on the basis of a percentage of the company's total loan dollar volume for the 2005 calendar year.
The department will consider the proposed amendment to §25.88 in a public hearing under Docket No. 2632, scheduled for 9:30 a.m. on December 12, 20051 in Room 100 of the William P. Hobby Jr. State Office Building, 333 Guadalupe Street in Austin, Texas.
2. FISCAL NOTE. Jacque Canady, Chief Financial Officer, has determined that for the first five-year period the proposal is in effect, the anticipated fiscal impact on state government will be income estimated at $153,126 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 proposal.
3. PUBLIC BENEFIT/COST NOTE. Ms. Canady has determined that for each year of the first five years the proposed amended section is in effect, the public benefit anticipated as a result of enforcing the section will be sufficient funds to cover the department's expenses for regulating insurance premium finance companies. There are two components of costs for entities required to comply with the proposal: the cost to gather the information, calculate the assessment and complete the required forms; and the cost of the assessment. Based on information obtained by the department, 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, regardless of whether the company is micro, small, or large, the required form can be completed in two hours. The requirement to pay the assessment is the result of the legislative enactment of the statute that imposes the assessment and is not a result of the adoption or enforcement of this proposal. There is no difference in proposed rates of assessment for micro, small and large businesses. The cost of the assessment to a premium finance company in 2006, regardless of whether the company is micro, small, or large, will be .00337 of 1.0% of calendar year 2005 total loan dollar volume of the insurance premium finance company. The minimum assessment cost under the section is $250. The department, after considering the purpose of the authorizing statu te, does not believe it is legal or feasible to waive or modify the statutorily mandated requirements of the proposal for small and 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 26, 2005 , 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 Jacque Canady, Chief Financial Officer, Mail Code 108-1A, Texas Department of Insurance, P.O. Box 149104 , Austin , Texas 78714-9104 . A request 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 §§651.003, 651.006(a)(2), and 36.001. Section 651.003 authorizes the commissioner to adopt and enforce rules necessary to carry out the provisions of the Insurance Code, Title 5, Chapter 651, concerning the regulation of insurance premium finance companies. Section 651.006 requires each insurance premium finance company licensed by the department to pay an amount imposed 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. 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. Insurance Code §§651.003, 651.006(a)(2), 651.101, 651.102, 651.204, 651.208, and 651.209 are affected by this section.
§25.88. General Administrative Expense Assessment. On or before April 1,
2005 ], 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
.00154 ] of 1.0% of the total loan dollar volume of the company for 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.