TITLE: Relating to reporting concerning selection of certain suppliers by insurers; providing an administrative penalty.

SUMMARY: Relating to reporting concerning selection of certain suppliers by insurers; providing an administrative penalty.

FULL TEXT:
AN ACT relating to reporting concerning selection of certain suppliers by insurers; providing an administrative penalty. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Chapter 38, Insurance Code, is amended by adding Subchapter Jto read as follows: SUBCHAPTER J. REPORTING OF EFFORTS BY CERTAIN INSURERS Sec. 38.451. APPLICABILITY OF SUBCHAPTER. (a) This subchapter applies only to an insurer that: (1) is authorized to engage in the business of insurance in this state, including any insurer described by Section 82.002(a); and (2) wrote premiums in this state of at least $100 million in the calendar year before the year in which a report is due under this subchapter. (b) This subchapter does not apply to a contract between an insurer and an agent. Sec. 38.452. FILING OF CERTAIN INFORMATION CONCERNING SUPPLIERS. (a) An insurer shall file with the commissioner not later than June 1 of each even-numbered year a report detailing the insurer's efforts to use businesses owned by minorities, women, and disabled veterans as suppliers of goods or services. (b) The report must contain: (1) the insurer's diversity policy statement; (2) a description of the insurer's outreach and communication efforts, including: (A) a description of how the insurer encourages and seeks out businesses owned by minorities, women, and disabled veterans to become suppliers; (B) a description of how the insurer encourages its employees involved in selecting suppliers to seek out businesses owned by minorities, women, and disabled veterans to become suppliers; (C) a description of how the insurer conducts outreach to and communicates with potential suppliers that are businesses owned by minorities, women, and disabled veterans; (D) a description of how the insurer supports organizations that promote or certify businesses as businesses owned by minorities, women, and disabled veterans; and (E) a description of how businesses owned by minorities, women, and disabled veterans may contact the insurer about supplier opportunities; (3) information about the insurer's selection as suppliers businesses owned by minorities, women, and disabled veterans that have a majority of the businesses' workforce located in this state, with each category aggregated separately to the extent that information is readily accessible; and (4) other relevant information the insurer chooses to include. (c) If an insurer does not enter into contracts to obtain goods or services in this state, it may file with the commissioner a statement attesting that the insurer does not enter into those contracts in this state to satisfy the reporting requirements of this subchapter. (d) An insurer that is a member of an insurance holding company system as described by Chapter 823 may comply with the reporting requirements in this subchapter through a single filing on behalf of the entire group of affiliated companies. (e) If the commissioner receives a written request from an insurer that states a good cause that additional time is required to file a report required under this subchapter, the commissioner may grant a 30-day extension of the time for the insurer to file the report. Sec. 38.453. ADMINISTRATIVE PENALTY. (a) An insurer that fails to file a report as required by this subchapter is subject to an administrative penalty under Chapter 84. Except as provided by Subsection (b), the amount of the penalty may not exceed $5,000. (b) An insurer that wilfully fails to file a report as required by this subchapter or wilfully fails to reply not later than the 30th day after the date the insurer receives a written inquiry from the department about the filing of the report is subject to an administrative penalty in an amount not to exceed $10,000. Sec. 38.454. EFFECT OF REQUIRED REPORTING. (a) This subchapter may not be construed as requiring quotas, set-asides, or preferences in an insurer's selection of suppliers for goods or services. (b) An insurer retains the authority to use business judgment to select a supplier to obtain particular goods or services. Sec. 38.455. PUBLIC INFORMATION. Not later than September 1 of each even-numbered year the department shall post the data contained in the reports filed under this subchapter on the department's Internet website. The commissioner by rule may establish a procedure for posting data under this section that includes a description of the data that must be posted and the manner in which the data must be posted. Sec. 38.456. RULES. The commissioner may adopt rules necessary to implement this subchapter. Sec. 38.457. EXPIRATION. This subchapter expires January 1, 2020. SECTION 2. This Act takes effect September 1, 2013.