HBA-GUM, TYH H.B. 3020 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 3020
By: Smithee
Insurance
7/22/1999
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 76th Texas Legislature, health maintenance organizations
(HMOs) were not subject to an existing Texas law that requires insurance
companies to file withdrawal plans with the Texas Department of Insurance
(department)  before exiting the Texas market.  That statute helps to
stabilize the Texas insurance industry by protecting against abrupt market
disruptions which may result if insurers haphazardly leave the state.  The
statute protects consumers, requiring insurers to continue to service their
Texas business in an orderly fashion and maintain a Texas presence until
their claims are fully paid.  The state allows the commissioner of
insurance, after notice and hearing, to require that a deposit be
maintained in this state if there is reasonable cause to believe that the
interests of the public are best served by such a deposit. 

The exclusion of HMOs from the withdrawal plan statute was a concern
because the Texas HMO industry has been suffering substantial losses.  On
an industry-wide basis, HMOs operating in Texas have consistently lost
money every quarter for several years.  No protection exists to pay the
claims of an HMO that goes into receivership.  H.B. 3020 subjects HMOs to
existing Article 21.49-2C, Insurance Code, requiring HMOs to file
withdrawal plans with the department before exiting the state. 

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 Subsection (i), Article 20A.26, Insurance Code (Texas
Health Maintenance Organization Act), to provide that a health maintenance
organization  (HMO) authorized under this article is subject to Article
21.49-2C (Withdrawal Plan), Insurance Code, requiring an HMO to file
withdrawal plans with the Texas Department of Insurance before exiting the
state, and is an authorized insurer for the purposes of that article.
Makes conforming changes. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.