HBA-NIK H.B. 2051 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2051
By: Thompson
Insurance
4/11/1999
Introduced



BACKGROUND AND PURPOSE 

There is concern that certain insurance carriers' practice of significantly
reducing the commission levels to agents for these small employers is a
disincentive to agents to solicit business from smaller employers.  H.B.
2051 clarifies for small employer carriers when it is allowable to vary
rates based on the number of employees. This bill also precludes carriers
from varying commission rates based on the number of employees in a group. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Article 26.31, Insurance Code, by adding Subsection (g),
as follows: 

(g) Authorizes a small employer carrier to divide small employer groups
with similar case characteristics into different classes of business based
on the number of employees covered under the small employer plan. 

SECTION 2. Amends Article 26.73, Insurance Code, by adding Subsection (c),
as follows: 

(c) Authorizes a small employer carrier to vary the agent commission rates
paid on small employer premiums, but only if the only factor that is used
to differentiate agent commission levels is the number of employees covered
under the small employer plan, and the commission levels are inversely
related to the number of employees covered under the small employer plan. 

SECTION 3. Effective date: September 1, 1999.
Provides that Act applies only to a small employer health benefit plan that
is delivered, issued for delivery, or renewed on or after January 1, 2000. 

SECTION 4. Emergency clause.