Source: http://www.tdi.texas.gov/rules/2002/1125a-059.html
Timestamp: 2018-03-20 11:51:47
Document Index: 110458365

Matched Legal Cases: ['§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§3', '§36', '§5', '§7', '§1', '§21', '§3']

The Texas Department of Insurance proposes new Subchapter A, §§3.1 ­ 3.8, concerning requirements for filing of policy forms, certificates, riders, amendments, and endorsements for life, accident, and health insurance and annuities. In conjunction with the proposed new subchapter, the department is proposing the repeal of existing Subchapter A, §§3.1 - 3.21, which is published elsewhere in this issue of the Texas Register . The proposal is necessary to streamline and clarify the overall process by which forms and related documents concerning life insurance products, annuities, accident and health insurance products, credit life insurance, credit accident and health insurance, and prepaid legal forms are filed for statutory and regulatory review and approval. To further streamline the filing process, the proposal allows companies to electronically file forms with the department using a form and format determined by the department, which currently is the NAIC supported SERFF (System for Electronic Rate and Form Filing) system. The department will be able to receive SERFF filings after all necessary rules are adopted. The proposed new sections further streamline the filing process by enabling the department to notify companies of the department's decisions by letter in lieu of stamping the duplicate copy, thus eliminating the need for filing of duplicate copies of forms.
The proposed new sections will facilitate consistent and appropriate filing of forms and rates with the department and will improve communications and understanding of the filing requirements. The proposal will further combine the existing filing requirements for the regular, general and expedited review processes into one filing process by consolidating the information into one transmittal checklist with a transmittal form for miscellaneous documents. This will eliminate the use of the previously promulgated certification transmittal checklists for the regular, general and expedited review processes.
Proposed §3.1 sets out the scope of the subchapter to identify the types of forms and miscellaneous documents that must be filed under Chapter 3, Subchapter A. Proposed §3.2 defines terms used in this subchapter. Proposed §3.3 establishes the information that must be included in a transmittal checklist and transmittal form which must accompany all filings. Proposed §3.4 specifies the general submission requirements, which include information concerning the contact person, form specifications, specimen language, variable material, matrix and insert page filings, limited/partial refilings, outlines of coverage, supplemental coverage, policy or contract forms, and rates/actuarial information. Proposed §3.4(q)(5) clarifies that if, during any 12-month period, the cumulative increase in premium rate is equal to or greater than 50%, actuarial information must be provided to support the rate increase. For example, for a particular 12-month period, the premium rate for the first 2 months is $100. The premium increases by 10% in month three, 10% in month five and 25% in month eleven. The cumulative increase for purposes of applying the 50% test under this paragraph is 51.25% (1.10 x 1.10 x 1.25) . Proposed §3.4(r) specifies required filing fees. Proposed §3.4(r)(1)(D) increases the filing fee from $50 to $100 for rates filed separately from the policy or contract that are subject to review and approval by the department. The department currently assesses a fee of $100 for other rates filed for review. Proposed §3.4(r)(1)(J) and (2)(H) require a filing fee of $50 for each form with a maximum fee of $500 for each matrix filing as these filings can be used to create multiple contracts or policies through the combination of various matrix provisions. Proposed §3.5 sets forth the appropriate statutory and/or regulatory authorities to utilize when submitting filings to the department and the description of each filing such as: new, informational, substantially similar, exact copy, substitution, pending, and resubmission. Proposed §3.6 addresses information concerning certifications, attachments, and other additional information required for a complete and comprehensive review of the submitted forms. Proposed §3.7 contains the requirements for form acceptance and the final disposition of the forms. Proposed §3.8 establishes an effective date for the proposed rules.
Angelia Johnson, Deputy Commissioner, Filings Intake Division, Life, Health and Licensing Program, has determined that for each year of the first five years the proposed new sections are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. There will be no effect on local employment or the local economy.
Ms. Johnson has determined that for each year of the first five years the proposed new sections are in effect, the anticipated public benefit will be increased efficiency of the department as a result of streamlining the requirements concerning the filing of forms and, as appropriate, rates for life insurance, annuities, accident and health insurance and prepaid legal insurance. This efficiency will increase effective communication with industry and provide greater services to the consumer. The economic costs required to comply with these proposed sections result from proposed §3.4(q)(5), (r)(1)(D) and (J) and (r)(2)(H).
Proposed §3.4(q)(5) clarifies the threshold at which the department requires an actuarial filing in conjunction with a filed rate increase. The approximate cost to comply with proposed §3.4(q)(5) will be $3,000 for the preparation and submission of the actuarial information. Since companies, with rare exception, are already complying with this paragraph as proposed, the department believes that most companies will likely incur no additional costs under §3.4(q)(5). Regardless of the fiscal effect, the department believes it is neither legal nor feasible to waive or modify the requirements of the proposed new section for small or micro-businesses. To do so would create a standard of review for small or micro-businesses different from that established for rates filed by all other businesses. Article 3.42 charges the commissioner to require the filing of all rates to be charged for individual accident and sickness policies in a manner to determine compliance with the law; it does not address or authorize exemption for small or micro-businesses.
Proposed §3.4(r)(1)(D) increases the filing fee from $50 to $100 for rates filed separately from the policy or contract that are subject to review and approval by the department. The department currently assesses a fee of $100 for other rates filed for review. Article 3.42(e) authorizes a greater fee when the department must review a form. The department has accordingly increased the filing fee consistent with the review requirement.
Proposed §3.4(r)(1)(J) and (2)(H) require a filing fee of $50 for each form included in a "matrix filing," with a maximum fee of $500. A "matrix filing" is one which contains a number of various provisions which a company may use to create multiple contracts or policies. The existing rule does not address matrix filings, and this proposal is the first formal recognition of their acceptability. Accordingly, when the department has accepted "matrix filings" for review in the past, it assessed only the standard single filing fee of $100 for reviewed filings and $50 for exempt filings. The proposed fee reflects the fact that a company can create more than one contract or policy through the combination of various matrix provisions. The proposed fee balances the economy of scale possible through use of the matrix filing with the effort required to review these filings. Since the proposal does not require companies to use "matrix filings," those opting not to do so will not be affected by the rule as they may continue to pay the existing rate for each single filing submitted for review. The rule´s sanction of the matrix filing will actually create a savings for a company that utilizes one matrix filing in any situation where it would normally use numerous individual filings.
Regardless of the fiscal impact, the department believes it neither legal nor feasible to waive or modify the requirements of proposed §3.4(r)(1)(D) and (J) and (2)(H) for small or micro-businesses. Article 3.42(e) directs the commissioner to set filing fees. While the statute authorizes the commissioner to exempt certain forms or documents, it does not authorize the commissioner to exempt certain companies. Moreover, one of the purposes of the fee is to fund the department´s review of the filings, through deposit in the State Treasury. As the review requirements do not vary by size of company, the department believes that modifying or waiving the fee for certain companies would contravene the intent and effect of the statute.
To be considered, written comments on the proposal must be submitted no later than 5:00 p.m. on January 6, 2003 to Gene C. Jarmon, Acting General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas, 78714-9104. An additional copy of the comments should be submitted simultaneously to Bill Bingham, Deputy for Regulatory Matters, Life, Health and Licensing Program, Mail Code 107-2A, Texas Department of Insurance, P. O. Box 149104, Austin, Texas 78714-9104. A request for public hearing on the proposal should be submitted separately to the Office of the Chief Clerk.
The new sections are proposed pursuant to the Insurance Code Articles 3.42, 3.51-6, 3.53, 3.64, 3.70-1, 3.70-12, 3.74, 5.13-1, and 21.42, Chapters 23 and 26 and §36.001. The Insurance Code Article 3.42(p) provides that the commissioner is authorized to adopt reasonable rules that are within the standards and purposes of Article 3.42, and necessary to implement and accomplish the specific provisions of Article 3.42. Article 3.51-6 §5 provides that the department is authorized to issue rules necessary to accomplish the specific provisions of Article 3.51-6. Article 3.53, §7(H) authorizes the department to charge a fee for forms or schedules filed under Article 3.53 in an amount to be determined by the department. Article 3.64(f) provides that the commissioner is authorized to adopt rules to implement and accomplish the specific provisions of Article 3.64. Articles 3.70-1 and 3.70-12 require the department to issue reasonable rules necessary to carry out the purposes of Articles 3.70-1 and 3.70-12, respectively. Article 3.74 provides that the department shall adopt rules in accordance with federal law applicable to the regulation of Medicare supplement insurance coverage that are necessary for the state to obtain or retain certification as a state with an approved regulatory program under 42 U.S.C. 1395ss. Article 5.13-1(d) authorizes the department to promulgate and enforce rules concerning legal service contracts that in the discretion of the department are deemed necessary to accomplish the purposes of Article 5.13-1. Article 21.42 requires that Texas laws govern any insurance contract that is payable to any citizen or inhabitant of Texas. Article 23.19 authorizes the Commissioner to adopt rules concerning participation contracts and agreements related to non-profit legal services. Article 26.04 requires the commissioner to adopt rules as necessary to implement Chapter 26 and to meet the minimum requirements of federal law and regulations. Section 36.001 authorizes the commissioner of insurance to adopt rules for the conduct and execution of the duties and functions by the department.
The following Articles are affected by the proposal: Insurance Code Articles 3.42, 3.50, 3.51-6, 3.53, 3.64, 3.70-1, 3.70-12, 3.74, 5.13-1, and 21.42, and Chapters 23 and 26.
10) Medicare SELECT plans of operation and amendments;
(II) a copy of the trust agreement if issued to a trust; or
(III) a copy of the constitution, bylaws, and articles of incorporation if issued to an association;
(d) Notwithstanding subsections 3.3(b)(2) and (c)(2) of this section, the commissioner may prescribe a transmittal document prescribed by the NAIC for purposes of standardization.
(3) may be used to replace an existing page of a previously approved or exempted contract, if used in this manner, the replaced page, as originally filed, must reflect a unique form number that distinguishes it from the other pages of the form or contract;
(H) For a filing of exempt matrix provisions to be used with only exempt products, a fee of $50 per form with a maximum fee of $500 is required
(1) On the transmittal checklist, specify the specific group type under which the form is being filed by indicating the appropriate paragraph as set forth in Insurance Code Articles 3.50 §1 and 3.51-6 §§(1)(a) and (2)(a), or §21.2702(1) and (2) of this title (relating to Definitions) and for Chapter 26 filings, specify the size of the group. Any filing submitted under an ineligible group type will not be accepted for review by the department, and will be returned to the company as incomplete.(2) Submit a separate policy and certificate, each with a unique identifying form number, for each group type that the filing will be issued to.
§3.8. Effective Date. The provisions of these sections shall apply to any form received by the department on or after January 1, 2003. Forms received by this department prior to January 1, 2003, shall be governed by the laws in effect at the time of the submission.