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Filings Made Easy for Life, Health and Licensing


... primary state and issue individual health insurance coverage in the primary ... Individual health insurance coverage issued by the health insurer is subject to ... – PowerPoint PPT presentation

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Title: Filings Made Easy for Life, Health and Licensing

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Filings Made Easy for Life, Health and Licensing
Texas?Government Relations Public Affairs
  • Federal Issues
  • Sunset Advisory Commission Recommendations
  • 80th Legislative Session Recap
  • TDI Biennial Report to the 81st Legislature

  • H.R. 1065 The Nonadmitted and Reinsurance
    Reform Act of 2007
  • Key Points
  • Only the domiciliary state may collect premium
    tax for nonadmitted insurance.
  • Reinsurers state of domicile has sole
    responsibility for regulating the reinsurers
    financial solvency if that state is NAIC

  • H.R. 5918 Small Business Health Options Program
    Act of 2008
  • (The SHOP Act)
  • S2795 and H.R. 6210 are similar
  • Key Points
  • Establishes a nationwide health insurance
    purchasing pool for small business and the
    self-employed and requires the Secretary of HHS
    to designate an office to administer program.
  • State may prohibit participation if alternative
    health benefit plans are offered.
  • Tax credit for small employers participating in
    qualified employee health insurance expenses
    under the Act.

  • H.R. 4460 Health Care Choice Act of 2007
  • Key Points
  • Establishes a system of cooperative governing
    of individual health insurance coverage offered
    in interstate commerce.
  • Allows a health insurer to designate a state as
    a primary state and issue individual health
    insurance coverage in the primary state and any
    other secondary state.
  • Individual health insurance coverage issued by
    the health insurer is subject to the laws of the
    primary state and is exempt from the laws of the
    secondary state.

  • H.R. 5611 National Association of Registered
    Agents and Brokers Reform Act of 2008 (NARAB II)
  • Key Points
  • Reestablishes the NARAB as a nonprofit
    corporation to adopt and apply producer
    qualification requirements and conditions on a
    multi-state basis.
  • Preserves the rights of states to license,
    supervise and discipline producers.
  • Preserves state consumer protection and market
    conduct regulation powers.
  • Sets forth membership requirements, including a
    mandatory criminal background check applicable to
    state-licensed insurance producers.
  • Establishes an office of consumer complaints.

  • H.R. 3200 National Insurance Act of 2007
  • Key Points
  • Authorizes the issuance of Federal charters and
    licenses for the sale, solicitation, and
    underwriting of insurance.
  • Establishes a system of Federal regulation and
    supervision of national insurers and national
    agencies and policyholder protections.
  • Establishes the Office of National Insurance in
    the Department of the Treasury.
  • Removes national insurers, national agencies and
    federally licensed insurance producers from state
  • National insurers would be subject to state
    taxation and would be required to join state
    guaranty associations.
  • Creates a National Insurance Guaranty Corporation.

  • H.R. 5840 Insurance Information Act of 2008
  • Key Points
  • Creates the Office of Insurance Information
    (Office) within the Treasury Department.
  • Office will collect and analyze data on
    insurance, issue reports and advise Congress and
    the Administration on domestic and international
  • Office will develop federal policy on
    international insurance issues and make sure
    states laws are consistent with the federal
  • Establishes an advisory group to make
    recommendations to the Office and the Treasury

  • Interstate Compact The Compact
  • HB 2613 - 79th Legislature adopted the Compact
    and Texas is now one of 31 states (28 in 06)
    that have joined the Interstate Insurance Product
    Regulation Commission.
  • The Commission enables state regulators to
    develop uniform national standards for the review
    and approval of insurance products, such as life
    insurance, annuities, disability income and
    long-term care insurance.
  • Products Approved 70
  • Average of Days 31
  • Uniform Standards Developed 44

Consolidated Appropriations Act of 2008
  • Funding level of 49,127,000 available to support
    the operation of State high risk insurance pools.
  • Grant awards will be announced on or about July
    1, 2008.
  • ? Grant Amounts for Operational Losses
  • ? Bonus Grants Supplemental Consumer Benefits

Sunset Advisory Commission Dates TDI Hearings
  • June 24th and 25th
  • Public Testimony
  • Room E1.030, Capitol Extension
  • 900am
  • September 23rd and 24th
  • Commission Decisions

Sunset Staff Report - TDI Recommendations
  • Homeowners Rate Regulation
  • Set time limits for reviewing and disapproving
  • Define the process for requesting supplemental
    information from insurers
  • Define prior approval condition by rule
  • Regularly assess and issue an order releasing
    rate filings from prior approval

Sunset Staff Report - TDI Recommendations
  • Texas Windstorm Insurance Association
  • Commissioner appoints all board members,
    designates presiding officer, adds public members
  • Establish administrative process for rate, form
    and operations approval
  • Transfer windstorm inspections and engineer
    oversight to TWIA
  • Allow TWIA flexibility in setting rates based on
    appropriate data
  • Authorize TWIA to require proof of two
    declinations from insurers from applicants

Sunset Staff Report - TDI Recommendations
  • Regulate Preferred Provider Organizations (PPOs)
  • Require PPOs to obtain a certificate of authority
    from TDI to operate in Texas

Sunset Staff Report - TDI Recommendations
  • Title Insurance Regulation
  • Require TDI to examine title agents, including
    verifying expense data.
  • Require title agents to annually submit audited
    financial statements of operating accounts to
  • Require Commissioner to collect data that will be
    relevant to title insurance rate making.

Sunset Staff Report - TDI Recommendations
  • Maintenance Tax
  • Increase the life, accident, and health insurance
    maintenance tax cap in order to cover the cost of
    regulation of that line of insurance.
  • Notes
  • HB 1849 (80th Session) eliminated biennial
    revenues of 19 M
  • previously collected for life valuation fees.
  • The proposed rate/cap change from .04 to 0.2
    is two tenths of a penny.

Sunset Staff Report - TDI Recommendations
  • Advisory Committees
  • Eliminate all but two TDI advisory committees
    from statute.
  • Adopt rules for use of advisory committees
    pursuant to Chapter 2210 of the Government Code.
  • Clearly distinguish between the purpose and
    appropriate use of advisory committees and
    informal working groups.

Sunset Staff Report - TDI Recommendations
  • TDI - State Fire Marshal Office (SFMO)
  • SFMO inspect state-leased buildings.
  • SFMO create risk-based approach for routine
    inspections of state buildings.
  • Authorize SFMO to charge a fee for inspections of
    privately-owned buildings.
  • SFMO work with local communities on fire
    prevention efforts.

Sunset Staff Report - TDI Recommendations
  • TDI SFMO Fines
  • Establish, by rule, a penalty matrix for SFMO
    licensee violations.

Sunset Staff Report - TDI Recommendations
  • Continue TDI
  • Continue TDI for 12 years
  • Update TDIs statutory duties to better reflect
    the agencys role in protecting consumers and
    encouraging a competitive insurance market in

TDI Sunset Staff Report Issues New Issue
  • TWIA Funding
  • Decrease exposure to General Revenue, while
    allowing for economic growth and insurance
  • Pre-event and/or post-event bonds
  • Bonds funded by policyholder surcharges.

Sunset Staff Report - OPIC Recommendation
  • Abolish the Office of Public Insurance Counsel
    and create a Consumer Representative within TDI
  • Transfer the Public Counsels statutory board
    positions and nomination duties to the Consumer
  • Transfer the responsibility from OPICs consumer
    publications to TDI
  • Transfer the authority to assess insurers to pay
    for consumer representation from OPIC to TDI

80th Legislative Session Recap
  • Claims Cost Data Reporting
  • HB 2015 by Smithee/Duncan
  • Previously, Article 21.49-15, Chapter 1209
    Chapter 1501.614 addressed the reporting of
    claims information for health benefit plans.
  • HB 2015 standardizes the reporting requirements
    under new TIC Chapter 1215.

80th Legislative Session Recap
  • Eligible Children Group Life Insurance
  • HB 2549 T.Smith/Averitt
  • Permits the ages and descriptions of dependents
    in Group Life (1131.802) to be the same as in
    Group AH (1251.152) to alleviate problems on
    submissions of combination group life, accident
    and health insurance.

80th Legislative Session Recap
  • Creditable Coverage
  • HB 2548 T. Smith/Averitt
  • HB 1977 Taylor/Averitt
  • SB 1254 Averitt/Taylor
  • Individual to Individual
  • Amends statute to credit for coverage when most
    recent coverage is individual coverage.

80th Legislative Session Recap
  • Suitability
  • HB 2761 HB 2762 Eiland/Averitt
  • Concern about consumer harm in transactions
    involving annuity products.
  • Establish standards and procedures to ensure
    insurance needs and financial objectives are
    appropriately addressed.

80th Legislative Session Recap
  • Life Only License
  • SB 1263 Brimer/Eiland
  • Previously, Texas law required General Lines
    Life, Accident, Health license
  • Producer Licensing Model Act allows for a life
    only license

80th Legislative Session Recap
  • Non-insurance Benefits In Health Plans
  • HB 1847 Hancock/Averitt
  • Previously, no specific authority for authorizing
    non-insurance benefits.
  • Allows an insurer to include a noninsurance
    benefit that is reasonably related to a policy or
    certificate as part of the policy or certificate.

80th Legislative Session Recap
  • Balance Billing
  • Confusion for enrollees who believe they have
    received care in network.
  • Lack of a standard for determining Reasonable
    and Customary charge.
  • Who pays?

80th Legislative Session Recap
  • Arbitration Provisions
  • TDI position that arbitration of the acceleration
    clause is not permissible
  • Allowed by some states

80th Legislative Session Recap
  • PPO Networks
  • Sunset Advisory Commission Recommendation
  • Consider requiring license or registration
  • Transparency
  • Quarterly Updates of Provider Lists

80th Legislative Session Recap
  • Risk Pool Eligibility Requirements
  • HB 2548 T. Smith/Averitt
  • Individuals who were eligible for COBRA benefits
    but did not elect coverage or lapsed coverage are
    eligible subject to a 180 day exclusion
  • Part-time employees eligible for an employer plan
    are eligible for the Risk Pool if employers plan
    is more limited or restricted than Pool coverage

80th Legislative Session Recap
  • Contribution Level For Small Employers
  • SB 1255 Averitt/Taylor
  • (relates to health cooperatives only)
  • Allows a health group cooperative to consist of
    small employers, large employers or small and
    large employers
  • A cooperative may restrict membership to small
    and large employers within a single industry
  • A small employer may join a group of small
    employers or small and large employers and a
    large employer may join any type of group

80th Legislative Session Recap
  • Investment Statute
  • Proposed Legislation HB 2550 T. Smith
  • Insurance companies may only invest in certain
    specified assets to ensure that funds are
    available to pay obligations.
  • Clarify applicability to all insurers doing
    business in Texas. Provide authority to limit
    investments that the Commissioner determines
    result in a hazardous condition.

80th Legislative Session Recap
  • Risk Based Capital (RBC)
  • Proposed Legislation HB 2191 Eiland
  • RBC is an important tool used by all states to
    monitor insurance company solvency.
  • Make all insurers subject to RBC requirements and
    allow impacted insurers a phase in period.

80th Legislative Session Recap
  • Maintenance Tax
  • Sunset Advisory Commission Recommendation
  • Currently, different lines of insurance have
    different tax rates in Texas.
  • Propose a study to examine the merits of a single
    tax rate.

80th Legislative Session Recap
  • Workers Compensation
  • Licensing of TPAs HB 472 Solomons/Van de
  • Prompt Pay Add language to 408.027 of the Labor
    Code that mirrors the language in Section
    843.337(a) of the Insurance Code HB 1005
    Giddings/Van de Putte
  • Penal Code Labor Code SB 1627
  • Need Uniform Penalty Structure

80th Legislature Interim Charges
  • House Committee on Financial Institutions
  • Study the adequacy and effectiveness of existing
    regulation of prepaid funeral benefits
  • Examine the practice of marketing variable
    annuities and whether certain sales practices
    constitute fraud

80th Legislature Interim Charges
  • House Committee on Government Reform
  • Study and review current laws regarding licensing
    and regulation of professionals, as well as
    current laws regarding practice acts
  • Make recommendations on creating limitations and
    streamlining of licensure requirements, such as
    the public policy implications of
    decriminalization of license-related violations

80th Legislature Interim Charges
  • House Committee on Higher Education
  • Evaluate the cost and feasibility of requiring
    students who attend institutions of higher
    education to be covered by a health benefit plan.
  • Evaluate whether institutions should have the
    authority to offer insurance coverage to graduate
    students and fellows

80th Legislature Interim Charges
  • House Committee on Insurance
  • Study the practice of balanced billing and
    determine which portion of the cost out-of
    network care patients, insurers and provider
    should be responsible for paying
  • Make recommendations on potential alternatives to
    the Texas Health Insurance Risk Pool
  • Make recommendations regarding the feasibility of
    establishing a health insurance exchange in

80th Legislature Interim Charges
  • Senate Committee on Finance
  • Evaluate the effectiveness of existing state tax
    incentives that encourage employers to provide
    health coverage to their employees, including tax
    incentives under the revised state business tax
  • Make recommendations for additional deductions or
    credits that increase the number of employees
    covered by health care insurance

80th Legislature Interim Charges
  • Senate Committee on State Affairs
  • Study the factors that impact the transparency
    and efficiency of the health insurance market
  • Make recommendations to result in the use of best
    practices, lower health care costs and better
    health outcomes
  • Study and make recommendations for reducing the
    number of uninsured Texans

80th Legislature Interim Charges
  • Senate Committee on State Affairs cont.
  • Study and make recommendations relating to the
    Texas Health Insurance Risk Pool
  • Review and make recommendations for requiring
    insurance coverage of routine medical care for
    patients with a life-threatening disease or
    condition who have elected to participate in a
    clinical trial

TDI Biennial Report to the Legislature
  • Section 402.066 of the Labor Code requires the
    workers compensation portion of TDIs Biennial
    Report no later than December 1st each even
    numbered year.
  • Section 32.022 of the Insurance Code requires the
    submission of TDIs Biennial Report on or before
    December 31st of each even numbered year.

81st Legislative Session Important Dates
  • November 4, 2008 General Election
  • November 10, 2008 Pre-filing Begins
  • January 13, 2009 81st Legislature Convenes
  • March 13, 2009 Deadline for Bill Filing
  • June 1, 2009 Last Day of 81st Session

Contact Information
  • Government Relations
  • Carol Cates (512) 463-6123
  • Public Affairs
  • David Durden (512) 463-6410
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