HBA-TBM H.B. 1945 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1945
By: Smithee
Insurance
3/5/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, some provisions of the Insurance Code may impede or forestall
the ability of the commissioner of insurance (commissioner) to adapt the
regulation of the insurance and financial services industries to reflect
rapid advancements in technology and significant changes in federal law.
This inflexibility can result in decreased cost-efficiency and unnecessary
delay.  Recent developments that affect the Health Insurance Portability
and Accountability Act of 1996, Medicare Supplement and Medicare+Choice,
and the Children's Health Insurance Program, as well as many others, would
benefit from more flexible rulemaking authority.  House Bill 1945 amends
sections of the Insurance Code to allow for greater flexibility in
incorporating modern practices into the decision-making authority of the
commissioner.   

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. 

ANALYSIS

House Bill 1945 amends the Insurance Code to provide that the Texas
Department of Insurance (TDI) must be able to promptly address developing
market practices that result from changes in federal laws and rules,
technology, and information availability occurring in the financial
services industry.   

The bill provides that a rule adopted by the commissioner of insurance
(commissioner) for the conduct and execution of the powers and duties of
TDI must conform to the above provision.   A rule relating to policy form
is prohibited from being amended or repealed before the first anniversary
of its adoption and TDI is prohibited from requiring an insurer to comply
with a rule adopted by the National Association of Insurance Commissioners
unless the commissioner of insurance (commissioner) finds that the rule is
required for the application of the above provision.   The bill also
provides that a specified disparity between the reasonable actual costs
required and the stated costs in a fiscal note or public benefit-cost note
voids a rule relating to administrative procedure adopted by the
commissioner unless the commissioner determines the rule is necessary for
TDI to conform to the above provision.   

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.