Filings Made Easy for Life, Health and Licensing

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Filings Made Easy for Life, Health and Licensing
EMERGING ISSUESWhats Next For
Texas?Government Relations Public Affairs
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EMERGING ISSUES

• Federal Issues
• Sunset Advisory Commission Recommendations
• 80th Legislative Session Recap
• TDI Biennial Report to the 81st Legislature

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FEDERAL ISSUES

• 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
  accredited.

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FEDERAL ISSUES

• 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.

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FEDERAL ISSUES

• 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.

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FEDERAL ISSUES

• 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.

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FEDERAL ISSUES

• 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
  oversight.
• National insurers would be subject to state
  taxation and would be required to join state
  guaranty associations.
• Creates a National Insurance Guaranty Corporation.

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FEDERAL ISSUES

• 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
  issues.
• Office will develop federal policy on
  international insurance issues and make sure
  states laws are consistent with the federal
  policy.
• Establishes an advisory group to make
  recommendations to the Office and the Treasury
  Secretary.

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INTERSTATE INSURANCE PRODUCT REGULATION
COMMISSION (IIPRC)

• 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

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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

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Sunset Advisory Commission Dates TDI Hearings

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

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Sunset Staff Report - TDI Recommendations

• Homeowners Rate Regulation
• Set time limits for reviewing and disapproving
  filings
• 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

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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

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Sunset Staff Report - TDI Recommendations

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

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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
  TDI.
• Require Commissioner to collect data that will be
  relevant to title insurance rate making.

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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.

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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.

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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.

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Sunset Staff Report - TDI Recommendations

• TDI SFMO Fines
• Establish, by rule, a penalty matrix for SFMO
  licensee violations.

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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
  Texas.

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TDI Sunset Staff Report Issues New Issue

• TWIA Funding
• Decrease exposure to General Revenue, while
  allowing for economic growth and insurance
  availability
• Pre-event and/or post-event bonds
• Bonds funded by policyholder surcharges.

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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
  Representative
• Transfer the responsibility from OPICs consumer
  publications to TDI
• Transfer the authority to assess insurers to pay
  for consumer representation from OPIC to TDI

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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.

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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.

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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.

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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.

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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

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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.

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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?

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80th Legislative Session Recap

• Arbitration Provisions
• TDI position that arbitration of the acceleration
  clause is not permissible
• Allowed by some states

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80th Legislative Session Recap

• PPO Networks
• Sunset Advisory Commission Recommendation
• Consider requiring license or registration
• Transparency
• Quarterly Updates of Provider Lists

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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

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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
  grouping
• 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

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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.

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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.

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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.

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80th Legislative Session Recap

• Workers Compensation
• Licensing of TPAs HB 472 Solomons/Van de
  Putte
• 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
  Carona/Martinez
• Need Uniform Penalty Structure

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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

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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

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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

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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
  Texas

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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

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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

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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

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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.

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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

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Contact Information

• Government Relations
• Carol Cates [phone]
• carol.cates_at_tdi.state.tx.us
• Public Affairs
• David Durden [phone]
• david.durden_at_tdi.state.tx.us