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A LOOK BACK: Addressing TDI’s Challenges Government Relations & Public Affairs

A LOOK BACK: Addressing TDI’s Challenges Government Relations & Public Affairs. Property & Casualty 2010 Compliance Conference. Overview of 81 st Legislature (Regular Session). Total Bills Filed: 8,074 Total Bills Passed: 1,656. Bills of Interest. TDI Tracked: 1,272

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A LOOK BACK: Addressing TDI’s Challenges Government Relations & Public Affairs

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  1. A LOOK BACK:Addressing TDI’s ChallengesGovernment Relations& Public Affairs

  2. Property & Casualty 2010Compliance Conference

  3. Overview of 81st Legislature (Regular Session) • Total Bills Filed: 8,074 • Total Bills Passed: 1,656

  4. Bills of Interest • TDI Tracked: 1,272 • (Includes 73 DWC-tracked bills) • TDI Tracked Bills Passed: 222 • (Five were vetoed by the governor)

  5. TDI Biennial Report to the Legislature • Recommendations Enacted • Market Stability 3 2 • Consumer Protection 10 6 • Enforcement and Compliance 4 4 • Workers Compensation 3 1 • Workforce Strengthening 3 3 • 23 16

  6. HB 2449 Eiland - Lucio • Increases solvency standards for county mutual insurance companies and subjects most to risk based capital requirements. • Certain county mutual companies will be subject to an alternative form of risk-based capital that is also specified by the bill. • The Commissioner will adopt rules to implement transition period of not less than five years.

  7. HB 4291 Smithee - Fraser • Grants TDI the authority to approve, deny, or disapprove an insurer’s application for a certificate of authority without being required to first hold a hearing. • Provides an applicant the right to request a hearing after a denial to provide the applicant an opportunity to demonstrate whether it meets all requirements for issuance of a certificate of authority. • Requires the Commissioner to request a hearing date not later than the 30th day after the date of the applicant’s request for a hearing. • Effective immediately - 6/19/09

  8. HB 4290 Smithee - Duncan • Requires an independent review of a carrier’s conclusion that a treatment should be denied because it is experimental or investigational. • Authorizes retrospective reviews of whether a treatment was medically necessary and appropriate. • Applies to health plans issued or renewed on or after January 1, 2010. • Effective 9/1/09

  9. HB 4339 Smithee - Fraser • Creates an unauthorized insurance guaranty fund. • The fund will be used to help compensate persons whose claims are left unpaid by unauthorized insurers in Texas, and defray the costs of handling claims. • Effective immediately - 6/19/09

  10. HB 4359 Smithee - Duncan • Relates to market analysis and examination. • Requires the registration with TDI and the providing of certain information by contract examiners with whom another state contracts to perform any market analysis or examination initiated by the other state of an insurer domiciled in Texas or a licensed managing general agent of an insurer. • Effective immediately - 6/19/09

  11. HB 4358 Smithee - Fraser • Amends current law relating to rulemaking authority for administrative penalties assessed for violations of the Insurance Code. • Authorizes the Commissioner to adopt and enforce reasonable rules necessary to accomplish the purposes of provisions relating to administrative penalties • Allows the resolution of more types of violations through fines and efficient use of staff resources. • Effective immediately - 6/19/09

  12. HB 4461 Smithee - Carona • Provides for the confidentiality of investigation files. • Information or material acquired by TDI that is relevant to an investigation is not a public record for the period that TDI determines is relevant to further or complete an investigation. • Effective immediately - 6/19/09

  13. HB 4343 Smithee - Fraser • Authorizes TDI to obtain access to certain criminal history record information maintained by the Department of Public Safety. • TDI can obtain complete information on an applicant in determining fitness for licensure or other qualification. • Effective immediately - 6/19/09

  14. SB 1814 Van de Putte - Deshotel • Allows small employers to be reimbursed up to $5,000 annually by the Division of Worker’s Compensation for making workplace modifications to help return an injured employee to work. • Clarifies insurers’ statutory responsibility to provide return-to-work coordination services on an ongoing basis when an employee begins to lose time away from work. • Requires insurers to notify employers of the availability of the Division’s return-to-work program. • Effective immediately - 6/19/09

  15. HB 4409 Taylor - Jackson • Relates to emergency preparation and management and includes revisions to the TWIA. • Requires the TWIA to be reviewed by the Sunset Advisory Commission in 2015 and submit a biennial report to leadership by December 31st of each even numbered year. • Changes the composition of the TWIA Board of Directors. • Provides for post-event issuance of public securities with repayment not dependent on General Revenue funds. • Requires one-declination to obtain coverage. • Requires evidence of flood coverage in certain zones. • Mandatory compliance with windstorm building codes with a surcharge for non-compliant structures. • File and use rating provision with certain limitation on rate increases. • Requires TDI to develop incentive programs to encourage insurers to voluntarily write wind coverage in coastal counties.

  16. HB 1831 Corte - Carona • An omnibus bill relating to disaster preparedness and emergency management. • Requires the Governor’s DEM to develop an annex to the state emergency management plan that addresses initial response planning for providing essential support supplies, equipment, and services during the first five days following a disaster. • Provides for developing a phased re-entry plan and the creation of uniform guidelines for acceptable home repairs. • Regulation of signage in the disaster area is suspended to allow licensed or admitted insurance carriers or agents to erect temporary claims service signage.

  17. HB 1476 Sheffield - Fraser • Increases the amount of capital and surplus for a property and casualty insurance company from $1 M to $2.5 M. • Provides for a phase-in of the requirements over a multiple-year period for companies existing in this state as of 9/1/09. • Effective 9/1/09

  18. HB 2877 Sheffield - Fraser • Raised the monetary limits of the categories for Closed Claim Bodily Injury Liability Reports submitted to TDI. • Aggregate Report will be for indemnity payments from • $0 - $25,000. • Short Form Report will be for indemnity payments from $25,001 - $74,999. • Long Form Report will be for indemnity payments from $75,000 or greater. • TDI may use a statistical agent to perform the reconciliation.

  19. HB 1975 Hancock - Lucio • Relates to the refund of excess unearned premiums by insurance premium finance companies. • Amends the statute to increase from $1 to $5 the amount below which an insured is not entitled to a refund if the credit results in a surplus over the amount due from the insured. • Effective immediately – 6/19/09

  20. Reports Required by the General Appropriations Act – SB 1 • Data Mining • Requires TDI to conduct a review of insurance industry practices regarding: • the use of data mining and pattern recognition practices and technologies that are used to predict difference in expected losses of covered persons or applicants for personal automobile or residential property insurance coverage or health benefit plan coverage; and • the manner in which insurers use these technologies in underwriting and setting rates for personal automobile or residential property insurance or health benefit plans.

  21. Reports Required by the General Appropriations Act – SB 1 • Homeowners Insurance Coverage • Requires TDI to conduct a review of levels of coverage to determine what, if any, changes have occurred in the level of protection offered by homeowners insurance policies since the department’s adoption of approved national forms in 2002. • The report for the 82nd Legislature shall quantify the effect of the change to national forms on the level of coverage for the average homeowner in this state.

  22. 81st Legislature Special Session • Governor calls a Special Session to include: • Extending the existence of several state agencies subject to sunset – including TDI. • Issuance of bonds for highway improvement and creation of the Texas Transportation Revolving Fund. • Legislation relating to the date on which the authority of TxDOT and a regional mobility authority to enter into a development agreement expires. • 81st Legislative First Called Session • July 1, 2009 – July 2, 2009 • Sunset Scheduling Bill is Filed and Passed • SB 2 – Hegar/Isett • Changed Sunset date for TDI from 9-1-2009 to 9/1/2011. • DWC Sunset date remained 9/1/2011.

  23. Sunset Advisory Commission Dates 2010 • May 25th and 26th • Public Testimony on Staff Report • July 6th • Decision Meeting

  24. Sunset Staff Report – TDI Recommendations • Issue 1: 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 • Develop and implement a plan to collect certain claim information

  25. Sunset Staff Report – TDI Recommendations • Issue 2: Regulate Preferred Provider Organizations (PPOs) • Require PPOs to obtain a certificate of authority from TDI to operate in Texas

  26. Sunset Staff Report – TDI Recommendations • Issue 3: Title Insurance Regulation • Regularly examine title agents and verify expense data submitted for rate making. • Assess what expense information would be needed for determining title rates every five years.

  27. Sunset Staff Report – TDI Recommendations • Issue 4: Advisory Committees • Eliminate 15 advisory committees from statute. • Adopt rules for use of advisory committees pursuant to Chapter 2210 of the Government Code.

  28. Sunset Staff Report – TDI Recommendations • Issue 5: TDI – State Fire Marshal Offices (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.

  29. Sunset Staff Report – TDI Recommendations • Issue 6: TDI – SFMO Fines • Establish, by rule, a penalty matrix for SFMO licensee violations.

  30. Sunset Staff Report – TDI Recommendations • Issue 7: Electronic Transactions • Clarify provisions in the Insurance Code to clearly permit the use of electronic commerce transactions.

  31. Sunset Staff Report – TDI Recommendations • Issue 8: Reduced Rate Filings Requirements • Require the Commissioner of Insurance to study the qualifications for reduced rate filings for insurers writing residential property insurance in underserved areas.

  32. Sunset Staff Report – TDI Recommendations • Issue 9: Continue TDI • Continue TDI for 12 years. • Update TDI’s statutory duties to better reflect the agency’s role in protecting consumers and encouraging a competitive insurance market in Texas. • Apply the standard across-the-board Sunset requirement for the Commissioner to develop a policy regarding negotiated rulemaking and alternative dispute resolution.

  33. 82nd Legislative Session Important Dates November 2, 2010 – General Election Day November 8, 2010 – Pre-filing Begins January 11, 2011 – 82nd Legislature Convenes

  34. Resources • Sign up for E-News to be sure you receive notice • regarding new rules, bulletins, other messages and • updates at: • www.tdi.state.tx.us/alert/emailnews.html • Legislature Online at: www.capitol.state.tx.us • Sunset Commission at: www.sunset.state.tx.us

  35. Contact Information Government Relations Carol Cates (512) 463-6123 Carol.cates@tdi.state.tx.us Public Affairs David Durden (512) 463-6410 David.durden@tdi.state.tx.us

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