Court Opinion

ID: 4129897
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:57:46.111857+00
Date Added: 2024-06-11T14:31:31.975924
License: Public Domain

QBfficeof tfy TZlttornepQBeneral
                                      .&ate of ?ICexas
DAN MORALES                                  January II,1994
 ATTORSEY
       GENERAL

     Mr. J. Robert Hunter                              Opinion No. DM-284
     Commissioner
     Texas Department of Insurance                     Re: Whether the Open Meetings Act,
     P.O. Box 149164                                   Government Code chapter 551, applies to
     Austin, Texas 78714-9104                          the governing bodies of the Health
                                                       Maintenance Organization Solvency Sutveil-
                                                       lance Committee, Insurance Code article
                                                       20A.36; the Lie, Accident, Health, and
                                                       Hospital     Service   Insurance    Guaranty
                                                       Association, Insurance Code article 21.28-D;
                                                       the Texas Property and Casualty Insurance
                                                       Guaranty Association, Insurance Code
                                                       article 21.28-C      and the Texas Title
                                                       Insurance Guaranty Association. Insurance
                                                       Code      article    9.48,    and     related
                                                       questions (RQs-409,410,411, and 412)

     Dear Commissioner Hunter:

             On behalf of the Department of Insurance (the “department”), you have submitted
     four opinion requests asking whether the Open Meetings Act, Government Code chapter
     551,’ applies to the meetings of governing bodies of four entities created under the
     Insurance Code.2 The four entities at issue are:

                   (i) the Health Maintenance Organization Solvency Surveillance
                Committee (“HMO solvency sutveillance committee”), Ins. Code art.
                2OA36

                      (ii) the Life, Accident, Health, and Hospital Service Insurance
                Guaranty Association (“LAHHSI guaranty association”), Ins. Code
                art. 21.28-D;

               ‘ll’c Open Mcclings Act, formerly V.T.C.S. art 6252-17, was raently mdikd by the
     legishm.      . See Acts 1993, 73d Leg., ch 268, $8 1, 46 (& Sept. 1, 1993). This codification was
     b.                 See id. 5 47. In this opinion, the terms“OpenMeetings Act”and “act”are used to r&r
     to lhc statutein its newly coditiedform.

              %‘OIIalso ask whether the AdministrativeProcedureAcl, fomwly V.T.C.S. art. 6252-13a
     (“APA”)-tly      enactedby Acts 1993,73d Leg., ch. 268.5 1 to be cad&d at title IO, chap&r2001 of
     the Govemwnt Code,appliesto these cntitics. We undmtaad thatthe deprtmmt is no longeriatercstcd
     in obtainingan opinion with respectto this issue.

                                                p.   1495
Mr. J. Robert Hunter - Page 2               (DM-284)

               (ii) the Texas Property and Casualty Insurance Guaranty
           Asso&tion (“PC1 guamnty association”), Ins. Code art. 21.28-C;
           and
               (iv) the Texas Title Insurance Guaranty             Association    (“TI
           guaranty association”), Ins. Code art. 9.48.
Apparently, the governing bodies of these entities are currently complying with the Open
MeetingsActs

        If the governing bodies of these entities are subject to the Open Meetings Act, you
also ask about the length of time which notice of their meetings must be posted prior to a
meeting. In addition with respect to the particular entities, you ask (i) whether the board
of diiors     of the HMO solvency surveillance committee is authorized to hold executive
sessions to consider matters which are contidential under article 20A36(b)(2) of the
Insurance Code; (ii) whether the board of directors of the LAHHSI guaranty association is
authorized to hold executive sessions to consider matters which are confidential under
section 12 and to meet by telephone confbrence under section 10(c)(3) of article 21.28-D
of the Insurance Code; (ii) whether the board of directors of the PC1 guaranty association
is authorized to hold executive sessions to consider matters which are confidential under
section 13 of articie 21.28-C of the Insmamx Code; and (ii) whether the board of
directors of the TI guamnty association is authorized to hold executive sessions to
consider matters which are conftdential under section 14 of article 9.48 of the Insurance
Code.

L   APPLICATION         OF TEE OPEN MEETINGS               ACT

     A.   Definition of a “goverttmentd       body”

        The Open Meetings Act applies to “govemmental bodies.” It defines the term
“governmental body” to include “a board, commission, department, committee, or agency
within the executive or legislative branch of state government that is directed by one or
more elected or appointed members.” Goti Code 8 551.001(3)(A). In addition, a
govemmenud body must have supervision or control over public business or policy. See
id. 4 551.001(4) (definition of a meeting); GuifRegional   E&c. Television Aflfiafes v.
Universi@ of Houston, 746 S.W.2d 803,809 (Tex. App.-Houston [14th Dist.] 1988, writ
denied). An entity which supervises but does not ultimately control public business or
policy still qualifies as a “govemmentai body.” Attorney Ciened Opinion H-438 (1974).
On the other hand, an entity which serves a purely advisory t&&on, with no power to

        Vhc Tl gwanly assmistion’splan of opation providesthat “[a]ll meetingsof the Asscciatiott
sbd%e emdwted in compliant with [the OpenMeUings Act] provided,however,no personmay bring
an action against the Amciation for violation of the [act] or for penalties under the [act] u&s it is
detemhd by a anut of corqztatt jmisdiction that the [xt] is legally applicableto the Association.’
Texas Title lnsumce GuarantyAssociationPlan of Operationat 5 (appmvedJuly 13,1992).

                                            p.   1496
Mr. J. Robert Hunter - Page 3               (DM-284)

s@rvise or control public business, is not a “governmental body,” and is not subject to
the Open Meetings Act. Attorney General Opinion JM-33 l(1985).

       Jn Attorney General Opiion H-772 (1976), this office set forth five prerequisites
for a meeting of an entity to be subject to the Open Meetings Act:

           (1) The body must be an entity within the ,executive or legislative
           department of the state;
           (2) The entity must be under the control of one or more elected or
           appointed members,
           (3) The meeting must involve formal action or deliberation between
           a quorum of members;4

           (4) The discussion or action must involve public business or public
           policy, and
           (5) The entity must have supervision or control over that public
           bushess or policy. Footnote added; citations omitted.]
Thisopinionconcentratesonthefirst,secondand~aitaia~theyarerdevaatto
whetberanentityissubjecttotheOpenMeetingsAct.               Thethirdandfourthcriteriaare
relevant to determinin g~etheraparticularmedingissubjecttotheOpenMeetingsAct,
an issue which we have not been asked to address.5

         SigniiicsntJy for our purposes, the Open Meetings Act has been held applicable to
a quasi-ptivate entity which was an auxiliary enterprise of a state university. See Gurf
Regional, 746 S.WSd 803. In GulfRegioml, the court addressed the legal status of the
GuJf Regional Education Tekvision Affiliates (“GRETA”), a group of independent school
districts and parochial schools that provided educational television progmmming in
conjunction with the public television station of the University of Houston. Id. at 804.
The member schools elected representatives to a board of directors who advised the

        %ince Anomey General Opinion H-772 (1976) was issw5, the k8iskmm has amen&d the
~tionof”deliberation”toiaclodc”a~cxchangcduringamating...bdw&naquonunofa
govumwdbodyandanotberpetson.” Gw’tC?ode~551.001(2).

        ~tcstfordcterminiagwbdheranentityisa”govtmmental~subjedtotheC)pcn
Me&ngsActinvolves6ifferentfactersthan oacmigllllakeinloacwuntindctcrmitigwhctbaaacauty
is a %I& agency”for ether pwpeses. Compareautherittu cited in text suprc with Texas Catastmphe
Pmp@v     Ins. An’n Y. Morales, 975 F.2.6 1178 (5th Cir. I992), cert. denied, 113 S. Ct. 1815 (1993)
(holding that the Texas CatastropheProper@Insurana Aswh’ion (“CATpooL”) was not “partof the
state”for pmposs of bemgbarredfrombringingan actionagainst the statelargelybecauseits timdswere
private); Leagwe G&l Ins. Co. Y. Michigan Catastrophic Cl&y As&t, 458 N.W.2d 632 (Mich 1990)
@oldingthat the Michigan CatasbuphicClaimsAssociationwas not an “agency”subjectto the Michigan
     .,     .
e               Prncedorc Aet); Attorney Gcnerai Opiion lh447 (1983) (snggutiagthat CATPOOLis
not a stateagencyunderAPA becauseit is wholly controlledby the StateBoardof Inswan@.
Mr. J. Robert Hunter - Page 4            (DM-284)

station of the members’ wishes regarding programming. Id. at 805. The univhty
managed the association through its director, a university employee, who reported to the
university officer in charge of telecommunications. The association’s tknds were also
subject to audit and financial controls by the university. Id. at 806-08. Largely on the
basis of these facts, the court rejected the contention that GRETA was an independent,
unincorporated association and held that the association was “an auxiliary enterprise of the
University, and the latter, as a state-supported university, [was] part of the executive
branch.” Id. at 809. The court concluded that the board representing the school districts
and parochial schools was a “governmental body” subject to the Open Meetings Act and
could not take official action without complying with the act. Id.

    B.   Analysis

        As GurfRegionol demonstrates, an entity need not be a traditional governmenti
entity, or be wholly devoid of private involvement, in order to be a “governmental body”
subject to the Open Meetings Act. Each of the entities at issue here is clearly an entity
within the executive branch of the state, as a board or committee within and subordinate
to the Department of Insurance, under the control of one or more elected or appointed
members. The central issue presented by these requests is whether these entities supervise
or cmtrol public business or policy. It requires a caretid examination of each entity’s
timctions and an assessment of whether the entity’s performance of those hutctions
involves the supervision or control of public business or policy.

        Although the State Board of Insurance and the commissioner exercise control over
them, the entities have vatying degrees ‘of autonomy in exe&sing their statutory duties.
They are clearly not merely advisory bodies but rather are bodies which exercise cwrfrol
ondsupewi~        outi@.     The critical and more difficult issue is whether they supervise
and control public business. As discussed below, we uhimateIy conclude that these four
entities supervise or control public business because we believe that the function of
protecting policyholders through an association with membership, duties and assessments
mandated by state law is a public one. We now turn to a detailed examination of each of
the four entities at issue.

          1.   The HMO Solvency Surveillance Committee

               a.   Statutory Scheme

      The HMO solvency surveillance committee is composed of nine members, all of
whom are appointed by the wmmissioner of insurance. See Ins. Code art. 20A.36(a).6 A

      6A licensed HMO or its agents or employees,the amunittee or its a@nts, employees,or
mrmbcrq’~notliableinacivilactionforanyacttalrmornottakcningoodfaithinthepcrfo~of
powus mid dunes under this section.” Ins. code art. 20A36(g). Unlike the ether articles of the
~codcwasidaedbclow,article2OA.36doesnotspcdfythatthecommittasRprcsentativaarc
entitledto reprucnlationby the sttomcygemml.
Mr. J. Robert Hunter - Page 5            (DM-284)

member must be either a licensed health maintenance organization or holding company
represented by an officer or employee, or a representative of the public. Id. The HMO
solvency surveillance committee “is created under the direction of the commissioner” and
performs its iknctions “under a plan of operation approved by the State Board of
Insurance." Id

        The HMO solvency surveillance committee serves two lknctions. Fii           it assists
and advises the wmmissioner relating to the detection and prevention of HMO
insolvencies, and HMOs placed in rehabilitation, liquidation, supervision, or conservation.
Id. art. 20A36@)(1). Second, at the wmmissioner’s direction, it assesses’ each HMO
licensed in the state to provide funds for the administrative expenses of the State Board of
Insurance regarding rehabilitation, liquidation, supervision, or conservation of an impaired
HMO. Id. art. 20A36(c).s This assessment may be levied only after the commissioner
determines that adequate assets of the HMO are not immediately available. Id. In
add&ion, the wmmissioner may abate or defer an assessment if he or she determines that
payment of the assessment tiould endanger the ability of an HMO to fillill its wntracU
obligations. Id.

         The HMO solvency surveUlanw wmmitteek powers we quite limited. It is
authorized to e&r into wntracts to implement article 20A36; to take legal action as
           to recover any unpaid assessments; to employ staE as necessary to handle its
iiziiz?-         ‘ens; and to assess each HMO for funds necessary to carry out its duties
and to reimburse wmmittee members for their actual expenses. Id. art. 20A36(d).

               b.   Application of the Open Meetings Act

        We conclude that the HMO solvency surveillance committee is a governmental
body subject to the Open Meetings Act for the following reasons. Fii, the committee,
given that all of its members are appointed by the commissioner of insurance and that it is
wntrolkd to a large degree by the commissioner, is clearly a committee “within the
executive. . . branch of the state,” as an entity within and subordiite to the Department
of Insurance, for purposes of the Open Meetings Act’s definition of a “governmental
body.” See Gov’t Code 3 551.001(3)(A). Furthermore, it is clearly “directed by one or
more elected or appointed members.” Id.

        The critical question is whether the HMO solvency surveiUance wmmittee
supervises or controls public business or policy. Its first function, assisting and advising

       ti   wmmisioner is aythorized to supervise the rehabilitation,liquidation, mperhion, or
emuervationof an HMOby atticle 2OA21 ofthe I-       Cute.
Mr. J. Robert Hunter - Page 6              (DM-284)

the wmmissioner of insurance on the detection and prevention of insolvencies, is an
advisoty fimction and does not bring the wmmittw within the Open Meetings Act’s
detinition of a govemmental body. See id. and authorities cited supm. We believe,
however, that the HMO solvency surveiUance wmmittee.‘s second tkmtion, i.e., wkting
assessments from member HMOs, is public business. We conclude that this is the case
even though the funds are wUected from HMOs, private entities, to aid other HMOs.
While the committee supetvises the collection of the assessments and may bring legal
action to recover unpaid assessments, the wmmissioner determines when an assessment
will be wllected and can excuse particular HMOs from paying the assessment in whole or
in part. Furthermore, the assessments are used to provide timds for the State Board of
Insurance’s administrative expenses “regarding rehabiitation, liquidation, supervision, or
conservation” of impaired HMOs. See V.T.C.S. art. 20A36(c). Because these funds are
used by the State Board of Insurance to carry out its statutory duty to supervise the
rehabilitation, liquidation, supervision or wnserva tion of impaired HMOs under article
20A21, the wlkction of the funds is public business. Therefore, the wmmittee’s
supervision of the wlkction of the assessments makes it a governmental body subject to
the Open Meetings Acts

          2.   The LAEESI Guaranty Association

               a.   The Statutory Scheme

       Tbe LAHHSI guaranty association is a nonprofit legal entity, Ins. Code art.
21.28-D. 5 6. the purpose of which is to protect insurance policyholders from insurers
fkihue to perUorm wmmctual obligations because of insolvency or other fmancial
.    .
mpaumu& id. 4 2. “To provide this protection, an association of insurem is created to

        9Subscdion(X90()of article204136 addremu the disclosnte of cettaln reportsand lnformatkn
disusedbytheomuni~.      1tpmvidesthatnponsregatdingtheftthan&conditionofHMosliwnxd
in Texas and HMCkin rehabilitation,liquidation,supervision,or wnsermtion shall be pmvidedto the
wmmitIec mcmhw5 at meetings. It liuthcr providesthat ‘[c]ommittcemembersshall not remI the
~wofnoramlinfwmationsocuredinthccourstofatlymedingoItheSolvcncyS~
commiaawi~m~tosnycorpnation,fo~orpersonuraminedbytbccommittet.                         Gnnmittee
~shalIbeflIcdwithlbe             wmmkionerandqxvtedtothemembersoftheStateBwrdof
Iasnmnw? Ins. Codeart. 20A36@)(2).

        Wedo notbelievethat sobseuion (b)(Z)of ankle 20A.36 Is evidencethat the kgishre did not
intadfortheopCnu&tingsActtoapplytothcHMOrolvcncysurvtillanaamunitt&.                 Arguably,this
provisionsuggeststhat the legklatwe did not intend for the committeeto be s&j@ to the act becauseit
pmhii membersfrom revealingcertainkinds of informationobtainedin a wmmittee me&ng, which
~dmaLelitllcscnscI~n~~wenoDentothclic.                      Webelieve.howmr.tbatthisomvisionis

winen infonnkon about &e fin&cial condition of HMO6during meetings ahd pmldii them from
~thewntentsofthismaterialinatneetingorel.5ewhem.                Werwliithatthismaypmmnt
pactid difFiadtiu for committeediscussion. It may be possible for the committee to avoid these
di6ienlUu by discmbg such wntidential informationin a public meetingwithout revealingthe identity
ofthe ‘wrporation,formor personexaminedby the committee.”See also disco&on inqiap. 17.
Mr. J. Robert Hunter - Page 7               (DM-284)

pay benefits and to continue coverages.         . and members of the association are subject to
assessment to provide hmds.” Id.

        Its membership includes all insurers providing life, accident, health, and hospital
service coverage licensed or holding a certiticate of authority to transact business in this
state. Id. $9 3, S(7). Membership is a condition of such an insurer’s authority to transact
business in the state. Id. 8 6. The LAHHSI guamnty amociauon performs its timctions
under a plan of operation approved by the wmnnssr   * ‘oner. Id. $5 6, lo(a). The State
Board of Insurance is authorized to issue rules and regulations necessary to carry out the
act. Id. $21. The association exercises its powers through a board of directors, id. @6,
7, which wnsists of nine members appointed by the State Board of Insurance, id. 5 7.1°

         Section 8 of article 21.28-D provides that if an impaired insurer is not timely
paying claims, the LAHHSI guaranty association is required to guarantee its policies and
loan it money. Id. § 8(b)(l). Ahernatively, the LAHHSI guaranty association is required
to provide substitute benetha “for policy or wntract owners [of such impaired insurers]
who petition for substitute benefits under claims of emergency or hardship under standards
~ropo=d by the association and approved by the commissioner.” Id. § 8@)(2).11 If a
member insurer is insolvent, the LAHHSI guamnty association is requhed to provide
moneys and guarantees newmary to discharge its duties. Id. 3 8(d). If the LAHHSI
guanmly association fails to act within a reasonable time the wmmissioner may assume
its responsiities.  Id. 5 8(q).

        The asso&tion is requhed to assess its members both for its administrative costs
and for costs incmred in meeting the obligations of an impaired or insolvent insurer. Id.
5 9(a) - (b). The amount and timing of the assessm~ts are set by the association’s board
of directors. Id. 5 9(a). The assessments wllected are deposited in the Texas Treasury
Safekeeping Trust Company. Id. 5 9(n). The wmmissioner is authorized to suspend or
revoke the iicense of an insurer that fails to pay an assessment or fails to comply with the
plan of operation. Id. 0 1 l(c). Alternatively, the wmmissioner may levy a forfeiture
against an insurer who fails to pay an assessment. Id. An action by the board of directors
or the association, including an assessment, may be appealed to the wmmissioner by a
member insurer. Id. 5 1I(d).

       The wmmissioner is required to report to the LAHHSI guaranty asso&ion’s
board of directors when he or she has reasonable cause to believe from an examination of
a member insurer that it may be impaired or insolvent. Id. $12(a)(3). The board may use

         wle SwnciauoIl,its membws, bwrd of directors,agents and employees lep~~tivea,           BIG
immune from liabilityfor gocd faith actions in the performanceofpowersanddatiaundertheact,aod
the attorneygeneral is rcpuiredto defend any such action, but only with mqxct to the applicabilityor
effectofthis’mmmity. Ins. Codeatt. 21.2&D, 5 17.

       “If an i-     is impairedbat timely paying its claims, tk LAHIE.1guarantyassociationmay
guarant&Ihe insum’s policies, subjectto the approvalof the wmmissioner. Id. 5 g(a).

                                           p.    1501
I@. J. Robert Hunter - Page 8             (DM-284)

thisinfomratonbutisrsquiredtokeepthereportconfidartialwailitismadepublicbythe
commissioner or other law&l authority. Id. 4 12(b). In addition, the board, on a majority
vote, may make reports and recommendations to the commissioner on the solvency of any
member insurer. Id. 3 12(d). “These reports and recommendations are not public
documents and are not subject to the open records law          until such time as an insurer is
declared to be impaired.” Zd

               b.   Application of the Open Meetings Act

        Because the members of the board of directors of the LAHHSI guaranty
association are appointed by the State Board of Insurance and the association performs its
functions under a plan of operation approved by the commissioner, the association’s board
of directors is “within the executive. . branch of the state,” as an entity within and
subordiite to the Department of Insurance, and is “directed by one or more elected or
appointed members” for purposes of the Open Meetings Act’s definition of a governmental
body. See Gov’t Code 3 551~001(3)(A). Again, the crucial question is whether the
association’s board supervises or controls public business or policy.

         TheLAHHs1guarMty        association has three distinct fundions. Fii     in cases
where inpired hmuers are not thnely paying claims, it guarantees the policies of impaired
and insolvent insumrs and provides fimds so that impaired and insolvent inmrerscanmeet
their obligations. Second, it asxsses its members to fund its admi&rative costs and its
costs in meeting the obligations of impaired and insolvent insurers. Third, it may make
rumnme-ndations to the commissione-r of insurance regarding insurer insolvencies. While
the latter Cmction is an advisory one, we believe that the first and second functions are
public business under the board’s supervision or control.

          As section 2 states, the purpose of article 21.28-D is to protect policyholders
“against fkilwe in the performance of contractual obligations.. . because of the
imphent         or insolvency” of a member insurer. “To provide this protection, an
association of insurers is created to pay benefits and to continue coverages.              and
members of the association are subject to assessment to provide fimds to carry out the
purpose of this [article].” Ins. Code art. 21.28-D, 5 2; see &o id. $4 ("Section
  . . . shall be used as an aid and guide to interpretation”). The protection of policyholdm
L an association whose membership, duties and assessments are mandated by state law is
public business.

        Furthermore, the public nature of these finctions is underscored by the
commissionds authority in each area. The commissioner is authorized to assume the
association’s duties when it fails to meet the obligations of an impaired or insolvent insurer
“within a reasonable period of time.” Id. 5 8(q). With respect to assessments, a member
insurer can appeal an assessment imposed by the board of directors to the commissioner.

                                           p.   1502
Mr. J. Robert Hunter - Page 9                (DM-284)

Id. 5 1l(d). Because the activities of the association’s board of directors are reviewed and
may ultimately be assumed by the commissioner, they are clearly “public business.“12

          3.      The PCI Guaranty Association

                  a.    The Statutory Scheme

        The PC1 guaranty association is also a nonprofit le@l entity. Ins. Code art.
21.28-C 3 6. Its purpose is to provide a mechanism for the payment ,of claims to avoid
delay in payment, to protect policyholders from financial loss because of the impairment of
an insurer, and to detect and prevent insurer insolvency. Id. 5 2. Its membership is
comprised of all property and casualty insurers licensed to transact business in the state,
who must be members as a condition of their authority to transact business in the state.
Id. §Q3,5( 10),6.

        The PC1 guaranty association is quite similar to the LAHHSI gramnty association
with respect to its timctions, mode of operation, authority and duties. The PC1 guaranty

          ‘~Aliicle 21.28-D umtalm’scvcml pK&kms which spuscauy mquim the amociaeon to kap
cenainil&mmtioacoafi&ntial.       ThescprovisionsarenoI-                with the conclosion that Ihc
      . .
amoaamnisagwcrnmentalhodymbje~totbeOpmMeaingsAct.                 Flrst,section12@)requimstl1atthe
amotWon+sbmtdofdircctomkecpcontidentiaInportsit           lWXiVShllllhCCOlIlUliSSiOnCrrcgarding
iwrus?@airmu~orb&cncy.             Inaddition,rcctionlZ(d)providathatthc~onamaprityvotc,
nuymkeKportsand-tolheomImimloncrontbcsolvcncydanymemberiasluer.
7k3empottsandmwmmaUlonsamnotpublic               dtmmeneandateMtsubltothcopcnreuudslaw
. ..uatllswhtimeasaninsumrlsdecIamdtok~”                     Ins.C&art.21.28-D,~12(d).          These
pmvisionsprimarilyrupJimtkc essociation’sbad of dimctorsto keep mtdidential cutaia rcco* and
&notappear~haveanybearingonwh*hertheassociation’sboardofdiredorsissubjedtotheOpen
Mcuiags Act. see crlsodiscusion inJ?op. 17.

         Ankle 21.28-D also oantains the following provision, section 14(b), regardingthe rongoing
activitiesofthe a.wcciation:

                    The Bggcjatiollshall maintainmcordsof au wgodatiom and meetings in
               which the assaciation or its representativesdisass the activities of the
               aJsociationiacanyingoutitspowmanddutiesnnderSection8~thisAd.
               Rrcordsofcbencgotiationsormcaingsmaybemadeplbliconlyonthe
               tembatioa of a liquidation,mhabiitation,or conservationpmceding invohkg
               Ibcimpaindorinsohrcnti-,onthetcrminstioa~thcirapairmcntor
               insolvcncyofthcinsunr,orontheorderofacourt~competentj~~o~...

Ins. Code art. 21.28-D. $14(b). Section 14(b), if read bmadly, could be construed to require the
amccistionto keep con6dentialrrcds of boardmeetings,and thereforecould be mad to suggest that the
@en Mdings Aa does not applyto the LAHHSIguarantyassociation’sboardof directors. We believe,
homver, that section 14(b) is mcmly intcmkd to requirethe associationto keep cadidential mrds of
     .
wgotmms and meetings in which the associationor its mpresentativesnegotiate with a partiadar
~orinsolventi-,andthatitdoesnotcxrmptbaerdmatings~mtheopCnMeetiagsAd.
Seealsoinfia     nate 19.
Mr. J.RobertHmter     - Page 10                   (DM-284)

associdon performs its timctions under a plan of operation approved by the
wmmissioner. Id. 88 6,9. The State Board of Insurance is authorized to issue rules and
regulations necessary to carry out the act. Id. $23. The ass&ation exercises its powers
through a board of directors, id. $4 6, 7, which wnsists of nine members, five of whom
are appointed by member insurers subject to the approval of the commissioner, and four of
whom are members of the public appointed by the commissioner, id. § 7(a).‘”

        When a member insurer becomes impaired, the association is required to pay
certain claims. Id. 5 8(a). “The association is considered the insurer to the extent of its
obligation on the covered claims and to that extent has alI rights, duties and obligations of
the impaired insurer as if the insurer had not become impaired.” Id. 5 8(b). The
association is required to investigate claims and adjust, compromise, settle and pay
covered claims to the extent of its obligation, and may handle claims through its
employees or through one or more insurers or other designated servicing facilities. Id.
5 8(d) - (0.

        To pay its obligations, the expenms it incurs in handling claims, and other
expemes, the association is required to assess member insurers. Id. 9 8(c);see uhid.
5 18. The commissioneris required to suspend or revoke the license of an insurer that
6tilSt0payitS  assessment or to comply with the plan of operation. Id. fj lo(d). The
wmmissioner is authorized to file suit to collect assessments on behalf of the asso&tion.
Id. 8 18(d).

         The asso&tion is required to submit to the wmmissioner a plan of operation
which must include its procedures for exercising its powers and duties, handling its assets,
and handling claims. Id. § 9(a), (d). Ifthe association fails to submit suitable amendments
to the plan, the wmmissioner, after notice and hearing, shall adopt rules to implement
article 21.28-C. Id. 5 9(b). The plan of operation must provide that any member insurer
aggrieved by a final action of the association may appeal it to the wmmissioner. Id.
§%fx3).

               b.   Application of the Open Meetings Act

        Because four of the nine members of the board of directors of the PC1 guaranty
association are appointed by the wmmissioner of insurance and five are appointed by
asso&tion members subject to the wmmissioner’s~approval, and the association performs
its Iunctions under a plan of operation approved by the commissioner, the association’s
board is “within the executive . . branch of the state,” as an entity within and subordiite
to the Department of Insurance, and is “diiected by one or more elected or appointed
members” for purposes of the Open Meetings Act’s detinition of a governmental body.

                                           p.   1504
Mr. J. Robert Hunter - Page 11            (DM-284)

See Gov’t Code 8 551.001(3)(A). As with the other entities, the crucial question is
whether the association’s board supervises or controls public business or policy.

         Lie the LAHHSI guamnty asso&tion, the PC1 guamnty association has three
distinct tunctions. First, when an insurer becomes impaired, the association must assume
its obligations to insureds, and when an insurer is insolvent, the association must provide
money to discharge its duties.        Second, it must assess its members to Smd its
administrative costs and its costs in meeting the obligations of impaired and insolvent
insuers.     Third, it may make recommendations to the wmmissioner of insumnw
regarding insurer insolvencies. Again, the latter &mction is an advisory one. We believe
that the Gst two timctions, however, involve the supervision or control of public business.

         Unlike the case of the LAHHSI guaranty association, the commissioner is not
authorized to assume the PC1 guamnty association’s duties when it fails to meet the
obligations of an impaired or insolvent insurer within a reasonable time. Indeed, the
wmmissioner has much less wntrol over the PC1 guamnty association than the LAHHSI
guaranty association. Like LAHHSI guaranty association, however, a strong argument
can be made that the PC1 guaranty association’s purpose and mission is &damentally
public. The purpose of article 21.28-C is to “provide a mechanism for the payment of
covered claims . . . to avoid exwssive delay in payment,” to “avoid tinancial loss to
ckthmts or policyholders because of the impairment of an insurer,” and to “provide an
asso&tion to assess the cost of that protection among insurers.* Id. 9 2(l) - (3); see uL90
id. § 4 (“This AU shall be liberally wnstrued to etfect the purposes under Section 2 of this
Act, which will wnstitute an aid and guide to interpretation”).         The protection of
policyholders by an association whose membership, duties and assessments are mandated
by state law is public business.

        In addition to the fact that its funds are wllected to enable the guaranty association
to carry out its purposes under section 2, the association’s plan of operation must permit
members to appeal its 6nai actions, including assessments, to the wmmissioner. The
wmmissioner is required to Sne or suspend or revoke the licenses of insurers who fail to
pay assessments, and the wmmissioner is authorized to tile suit to collect assessments on
behalf of the association. The wmmissionet% enforcement role further supports the
wnchrsion that the wgection of assessments is a public tbnction, and that the board,
which supervises this function, is therefore a governmental body subject to the Open
Meetings Act.

        Finally, we note that the legislature recently amended article 21.28-C of the
Insurance Code to expressly authorize the PC1 guaranty association’s board of directors to
meet by telephone wnference in certain circumstances. See Acts 1993,73d Leg., ch. 685,
$9.11 (etf Sept. 1, 1993).          That provision provides in pertinent part that
“[n]otwithstanding [the Open Meetings Act], the board may hold an open meeting by
telephone wnferenoe call’ifimmediate action is required and the convening at one location
of a quorum of the board is not reasonable or practical.” Ins. Code art. 21.28-C
4 8(k)(l). We believe that this amendment to article 21.28-C is a strong indication that
Mr. J. Robert Hunter - Page 12              (DM-284)

the legiskue            intended for the Open Meetings Act to apply to the PC1 guaranty
alssodiou’4

              4.   The Texas Title Insurance Guaranty Associitioa

                   a.     The Statutory Scheme

        The ‘II guaranty asso&tion is a nonprofit legal entity created under section 14 of
article 9.48 of the Insurance Code (the “Texas Title Insurance Guaranty Act”). All title
insurers must be members of the association as a condition of their authority to transact
business in the state. Ins. Code art. 9.48,s 14(a). It exercises its powers through a board
of directors wnsisting of nine members, appointed by the State Board of Insurance. Id.
$14(a) - (b).IJ The association dictions under a plan of operation that must be approved
by the wmmissioner. Id. 8 14(d). If the association fails to submit a suitable plan of
operation, the commissioner may adopt rules to carry out the article. Id. 5 14(d)(2). The
State Board of Insurance is authorized to issue rules and regulations necessary to carry
outtheact. Id. 3 18.

        The association’s purpose is to provide funds in addition to the assets of impaired
instmrs for the protection of policyholders through payments of covered claims,
reinsurance, and asstm@on of liabiities. Id. $0 2, 7(a). The association’s activities are
iimdedbyamandatoryassessment          of its members. Zd. 8 7(b).16 The wmmksioncr is

       ‘aon    13 of a3tick 21.2a-c of the lnarrana codewasalsorcccnuyrnncmkdbythe
legaalm a6 foUo%:

                    Theasscci&nshallbaveacccsstothcbcdcsandreomJsefamembcr
               inauerinrraivaship,inc&rtotnskeadetuminationofthcextentofthc
               impctontbc ass&&oniatheeventsuchmemkkcomcsimpsircd.             The
               assodionshaUhavctheauthofUytopufonnorcaustobcpcrformaian
               acbuarialandoperatienslana@sisofthemcmberi-andpnparraqcrton
               mattcrsrc&in8tetbcimpsctorpot&aliqactonthcas3c&tienintheevcnt
               ofinqirmem. Suchrepot.6shall not k publicd@xncnts.

Id. 0 13(a) (as ama~Icd by Ads 1993,73d Leg, ch MIS,0 9.17 (cff Sept. 1, 1993)). This amw&au
mutJypmvidcsthatcutainrepxtsprcpsredbythcassc&tionarenotpubk~                       alddouMt
appear~O~anYbearingonw~theassociation’sbaardofdinctonissubjodtothe~Matings
Act. See also discussionin@ pp. 17-18.
Mr. J. Robert Hunter - Page 13               (DM-284)

authorizedto bringsuit to wllect assessments on behalf of the association, and to suspend
or revoke the licenses of imurers who fail to pay. See id. $8 7(d), 8. The wmmissioner is
also authorized to assess an administmtive penalty on any insurer that filils to pay an
assessment when due. Id. 3 8(a) (as amended by Acts 1993.73d Leg., ch. 685,§ 11.04).
A member insurer may appeal any action or ruling of the association relating to an
assessment to the wmmissioner. Zd. 9 20(a).

        When a member goes into receivership, the association is required to pay wvered
claims. Id. $10. The association is required to investigate claims, and to adjust,
compromise, settle, pay, or deny them to the extent of the impaired insure~‘s obligation.
Id. 0 lo(e). “Subject to the approval of the wmmissioner, the association shall establish
procedures by which claims may be filed with the association and acceptable forms of
proof of wvered claims.” Id. 3 10(g). Th e association may handle claims through an
employee or through designated servicing faciities. Id. 5 10(h). The association may also
use limds derived from assessments to w nsummate contracts of reinsurance, assumption,
or substitution. Id. 5 IO(i).

         The asso&tion is authorized to advise the commissioner, upon his or her request,
wnoaning the mhabilitation of impaired insurers. Id. 3 14(c)(l); see &u id 5 14(e)(S)
(the board may make reconrrmdations to the wmmissioner for the detectiori and
prevention of insurer or agent impairments). The association is also quired to take
oerkn steps to prevent the hnpahment of its members. Id. 3 14(e). It must notify the
wmmissioner of any information indicating that any insurer or agent may be unable to
WiU its wntractual obligations, and may ~request the wmmissioner to investigate. Id.
8 14(e)(2). The board is also requked to advise the wmmissioner upon matters relating to
thesob!encyofinWrers     at a meeting called by the wmmissioner. “Such a me&g is not
open to the public and only members of the board of directors, members of the State
Board of Insurance, the wmmissioner, and persons authorized by the commissioner shall
attend." Id. § 14(e)(3). In addition, the board may make reports and recommendations to
the wmmissioner relating to “any matter germane to the solvency, liquidation,
rehhilitation, or conservation of any insurer or agent.” Id. 8 14(e)(4). Such reports and
recommendations “shall not be considered public documents until such time as an insurer
is declared to be impaired.” Id. 17

        In addition, the legislature recently amended article 9.48 of the Insurance Code by
addii section 1%. See Acts 1993, 73d Leg., ch. 685, 5 11.08. Generally, section 15A
requires the wmmissioner to not@ the TI guamnty association of the existence of an
impaired insurer “not later than the third day a& the date on which the wmmissioner

       “Section 14(f) statesthat the association’splan of operation may provide that any or all of its
powasanddutia,withtwoacccptions,maybedelegatcd~anotbcreati~.                    Themociationisaot
athormd to &legate its authorityunder section 7, which requites the association to asses member
lnsmms, or section 14(c)(3), which requiresdirectorsof the associationto file financial statenmts with
theTexasEthicsCommission.
Mr. J. Robert Hunter - Page 14            (DM-284)

gives notice of the designation of impairment.” Ins. Code art. 9.48, § ISA(a). Subsection
(c) of the provision provides as follows:

                The wmmissioner shall report to the board when the
           wmmissioner has reasonable cause to believe from any -0%
           whether completed or in process, of any insurer that the insurer may
           be an impaired insurer. The board may use this information in
           carrying out its duties and responsibiities under this article. The
           board shall keep the report and the information contained in the
           report confidential until it is made public by the commissioner or
           other law&l authority.

               b.   Application of the Open Meetings Act

        Because all members of the board of directors of the TI guaranty association are
appointed by the State Board of Insurance, and the association flmtions under a plan of
operation tha! must be approved by the wmmissioner, the board is “within the
executive. . . branch of the state,” as an entity within and subordinate to the Department
of Inrayance, and is “directed by one or more elected or appointed members” for purposes
of the Open Meetings Act’s definition of a govanmartat body. See Gov’t Code
8 551.001(3)(A). As with the other three entities, the crucial question is whether the
association’s board supervises or controls public business or policy.

        The association serves three lkctions.       Fii   it pays wvered claims of
pokyhoidem of impaired insurem. Second, it wllects moneys to fimd these activities by
assedng its members. Third it is required to take certain steps to prevent insolvencies,
primarily by notifying and advising the wmmissioner. We conclude that the latter &nct.ion
is an advisory one, but that the 6rst two tGxtions involve the supervision or control of
public business.

         The association seems tomperform the first function largely independent of the
wmmissioner or the State Board of Insurance. The fad that the association is authorized
to delegate the handling of claims to a designated servicing facility underscores that the
association’s role is to step into the shoes of the insolvent insurer. That the association’s
role is to take over the obligations of a private insurer, however, does not make its
filnction non-public. The purpose of article 9.48 is to provide “funds in addition to assets
of impaired insurers for the protection of the holders of ‘covered claims’ . . through
payment and through wntracts of reinsurance or assumption of liabilities or of substitution
or otherwise.” Ins. Code art. 9.48, 8 2; see also id. 0 4 (“This article shall be liberally
wnstrued to effect the purpose under Section 2 which shall constitute an aid and guide to
interpretation”). The protection of policyholders by an association whose membership,
duties and assessments are mandated by state law is public business. In addition, the
commissioner is authorized to bring suit to collect assessments on behalf of the association

                                          p. 1508
Mr. J. Robert Htmter - Page 15                (DM-284)

and to suspend or revoke the licenses of insurers who fail to pay assessments and other
fees, see id. $9 6(e) (gmnnty fees), 7(d) (assessments), 8 (assessments), as well as to
assess administrative penalties on insurers that fail to pay assessments when due. Id.
5 8(a). The wmmissionet’s enforcement role supports the conclusion that the collection
of assessments is a public limction.

        As noted above, the board is required to advise the commissioner upon matters
relating to the solvency of insurers at a meeting called by the commissioner, and the act
specifically states that “[sluch a meeting is not open to the public.” Id. $ 14(e)(3). In
addition, members of the board are prohibited from revealing information received in such
meetings. Id. This provision suggests that the legislature contemplated that the Open
Meetings Act would apply to other activities of the TI guaranty association. The
provision which states that the board’s reports and recommendations to the commissioner
regarding agents’ or insurers’ solvency shah not be considered public documents, id.
$14(e)(4), because it addresses the public nature of documents as opposed to meetings, is
not germane to whether the board is subject to the Open Meetings Act. For the same
reason, we do not believe that recently enacted section ISA is germane to this question.
We do note, however, that section ISA appears to prohibit hoard members from
die         the contents of a report from the wmmissioner about an impaired insurer in a
public meeting until the information is made public “by the wmmissioner or other lawI%
authority.” Id. 3 l%(c). See&o discussion infiup. 18.

        Fii,     we note that the legishuure recently amended article 9.48 of the Insurance
code to expressly authorize the TI guaranty assoc&ion’s board of directors to meet by
telephone conference in certain circumstances. See Acts 1993,73d Leg., ch. 685,s 11.06.
That provision provides in pertinent part that “[n]otwithstanding [the Open Meetings Act],
the board may hold an open meeting by telephone wnference call if immediate action is
required and the wnvening at one location of a quorum of the board is not reasonable or
practical.” Ins. Code art. 9.48,§ 15(g). We believe that this amendment to article 9.48 is
a strong indication that the legislature intended for the Open Meetings Act to apply to the
TI guamnty association.ts

        ‘%e kgislatme also smcndd article 9.48 by addingsection23, s&section(a) dwhich requires
tbe asqialion to “mahda records of all negotiationsand meetings in which the association 01 its
repnsentstives disaus the aeddies of the associationin cartying out its duties under this article.” Id.
5 23(a) (as amendedby Acts 1993. 73d Leg., ch. 685, g 11.11). It tiuther providesthat “[r]ecordsofthe
negetSon6 or meetiag6may be made public only on the terminationof a liquidation,rebabilitatkq or
CollsrvBtMtl proceedinginvolving the impairedor insolvmt iasurer,on the terminationof the impairment
orlasoh,elqoftheinsurer, orontheorderofacotutofcomprteatjutisdicuen.”            Id. Tbisprovision,if
readbroadly,couldbeconstmedtorequirethe associationto keep contidentialrecordsof bard meet@s,
sod tbereforecould be read to suggest that the Open Meetings Ad does not apply to the Tl guamnty
association’sboardof directors. We believe, however,that section 23(a) is merelyintendedto mquirethe
aaciation to keep wtideatial recordsof negotiations and meetings in which the association or its
rcprcscntativesocgotiatewithaperticulsrimpeiredori~~insura,andthatitdoanotacemptboerd
meetin@ from the Open Meetings Act, espcially in light of the telephone mnfereace amembxnt
disamed above. See also in&    note 20.
Mr. J. Robert Hunter - Page 16          (DM-284)

II. NOTICE UNDER TEE OPEN MEETINGS ACT

       Having wnctided that the governing bodies of the four entities at issue are
“govunmental bodies” subject to the Open Meetings Act, we now turn to your more
speci6c questions about the act. First, you ask about notice.          The act’s notice
requirements are set forth in section 551.041 through section 551.551.054 of the
Government Code. Section 55 1.043 and section 55 1.044 provide in pertinent part:

                Sec.. 551.043. TIME AND ACCESSIBILITY OF NOTICE;
          GENBRAL RULE. The notice of a meeting of a governmental body
          must be posted in a place readily accessible to the general public at
          alI times for at least 72 hours before the scheduled time of the
          meeting, except as provided by Sections 551.044-551.046.

                sec. 551.044.         EXCEPTION TO GENERAL RULE:
          GOWRNMENTAL BODY WITH STATEWIDE JURISDICTION.
          (a) The secretary of state must post notice of a meeting of a state
          board, wmmission, department, or officer having statewide
          jurisdiction for at least seven days before the day of the meeting.

Acts 1993,73d Leg., ch. 268,§ 1. You ask whether the foregoing entities are subject to
the 72 hour notice requirement or seven day notice requirement. Clearly, these provisions
are intended to require a longer notice period for govemmentsl bodies with statewide
jurisdiction in comparison with local governmental bodies whh a much more limited
geographical jurisdiction.      The entities at issue are not local governmental bodies.
More,         we conclude that notice of their meetings must be posted by the secretary of
 state for at least seven days preceding the day of the meeting.

IIL EXECUTIVE SESSIONS UNDER THE OPEN MEETINGS ACT

        You ask several questions about executive sessions under the Open Meetings Act.
The Open Meetings Act sets forth several specific exceptions to &general requirement
that the meetings of a governmental body be open to the public. See Gov’t Code
$3 551.071- 551.084. Prior to 1982, this office. stated on several occasions that a
govemmental body could deliberate in a closed session about wnfldential information,
even though no Open Meetings Act provision authorizing a closed session applied to the
deliberations. See. e.g., Attorney General Opinions H-l 154 (1978); H-780 (1976); H-484
(1974). In Attorney General Opinion MW-578 (1982), however, this office concluded
that closed meetings may be held only where specifically authorized. It suggested that the
only way for a governmental body to protect confidential information is to avoid
discussing it altogether.

        You ask whether the board of directors of each of the entities at issue may meet in
executive session to discuss tiormation which is wnlidmtial under various provisions of
the Insurance Code. The answer to your question depends upon whether the statutes at
issue provide specific authorization to do so.
Mr.J.RobettHtmter      - Page 17         (DM-284)

       Fii    you ask whetha the board of directors of the HMO solvency surveillance
wmmittee is authorized to hold executive. sessions to wnsider matters which are
wntidential under article 2OA36(b)(2) of the Insumnw Code. Subsection (b)(2) of article
2OA36 addresses the disclosure of certain reports and information diswmed by the
committee. It provides that reports regarding the financial wndition of HMOs licensed in
Texas and HMOs in rehabiitation, liquidation, supervision, or conservation shah be
provided to the wmmittee members at meetings. It finther provides that

           [c]ommittee. members shah not reveal the wndition of nor any
           information secured in the wurse of any meeting of the Solvency
           SurveiUance Committee with regard to any corporation, form or
           person examined by the wmmittee. Committee proceedmgs shah be
           filed with the commissioner and reported to the members of the State
           Board of Insurance.

This provision does not provide express authorization for the board of directors of the
HMO sobcy        sttndlancc wmmittee to meet in executive session. We believe that this
provision anticipates that committee members will receive copies of reports and other
written irttbrmation about the financial condition of HMOs during meetings and prohibits
the directors f%omtevealing the wntents of this material in a meeting or elsewhere. See
ulwsquunote9.

          Sew4      you ask whether the board of directors of the LAHHSI guamnty
amciation is authorized to hold executive sessions to consider matters which are
wnlidential under se&ion 12 of article 21.28-D of the Insurance Code. Section 12(b)
requims the twochtion’s board of directors to keep wntidential reports it rewives &om
the wmmissiotur regding insured impabment or insolvency, Andysection 12(d) provides
that the board, on a majority vote, may make reports and recommendations to the
wmmissioner on the solvency of any member insurer.                  “These reports and
recommendations are not public documents and are not subject to the open records law
. . . until such time as an insurer is declared to be impaired.” Ins. Code art. 21.28-D,
0 12(d). These provisions primarily require the association’s board of directors to keep
wnSdential certain records. They do not authorize the board of directors to meet in
executive session. In keeping with the spirit of these provisions, the board of directors
wuld choose to avoid disclosing the substance of a recommendation or record by
t&aining 6om discussing its particulars in a public meeting. See ulso supra note 12.19

        Third, you ask whether the board of directors of the PC1 guamnty association is
authorized to hold executive sessions to consider matters which are wnftdential under
section 13 of article 21.28-C of the Insurance Code. Since this opinion request was

        ‘%I addition, Ilwlance Code article21.28-D, section 14@)appas to prohibitboard manbm
fromrmalinginaplblicmeetingthecontmtsofrccordsofnegotiationsand~n~inwhichthe
amcciadonor its rqmsdadves negotiatewith a pattiatlar impairedor insolventi-. See discussion
sup   note 12.

                                          p.   1511
Mr. J.RobettHumer      - Page 18            (DM-284)

submitted, section 13 has been substantially amended. See supper note 14. As amended,
section 13 merely provides that certain reports prepared by the association are not public
doammnts. It does not expressly authorize the board of directors to meet in executive
session. In keeping with the spirit of this provision, the board of directors wuld choose to
avoid disclosing the substance of a such report by regaining from discussing its particulars
in a public meeting. See id.

        Fiily, you ask whether the board of directors of the TI guaranty association is
authorized to hold executive sessions to consider matters which are wniidential under
section 14 of article 9.48 of the Insurance Code. Under section 14, the board is required
to advise the commissioner upon matters relating to the solvency of insurers at a meeting
called by the commissioner. Section 14(e)(3) specitically states that “[sluch a meeting is
not open to the public.” Ins. Code art. 9.48, § 14(e)(3). In addition, members of the
board are prohibited from revealing information received in such meetings. Id. We
believe that section 14(e)(3) specifically authorizes the board of directors to meet in
executive session to advise the wmmissioner about matters relating to the solvency of
insurers, and precludes the directors from revealing information received at such an
executive session in a public meeting. See also discussion supru p. 15.20

IV. TELEPHONE CONFERENCES UNDER THE OPEN MEETINGS ACT

        You also ask whether the board of directors of the LAHHSI guamnty assoc&ion
is authorized by section 10 of article 21.28-D of the Insurance Code to meet by telephone
wnferwce.      In Attorney General Opinion JM-584 (1986), this office concluded that a
meeting by telephone wnference would not comply with the requirements of the Open
Meetings Act. Sii        that opinion was issued, the legislature has amended the act to
spedidy      authorize the governing body of certain entities to hold a meeting by telephone
conference. See, e.g., Gov’t Code $5 551.121 (governing board of institution of higher
education), 55 1.122 (Texas High-Speed Raii Authority), 551.123 (Texas Board of
Criminal Justice), 551.124 (Board of Pardons and Paroles). In addition, as noted above,
the legislature recently enacted legislation authorizing the PC1 guaranty association and
the Tl guamty association to meet by telephone wnference. See Ins. Code art. 9.48,
8 14(g); id. art. 21.28-C 3 8(k)(l). For this reason, we believe that authorization to hold

       %tsnmna code article9.48, sodion 14(e)(4)providesthat reportsand raommendations that
~~gusranty       association’sbard makes to the commissionerregarding“the sckncy, liquidation,
mbabilitaticnor cettservationof any insureror agent”an not publicrecordsuntil the insurerisde&red
to be impaid. To the extent the boardis not authorizedby section U(e)(3) to discuss such information
inarcnmvcstsion,tbe~ofdinaorscouldchoosetoaMiddisclosingthcsubstanccofsuchrrportor
recommadation by draining ,fmm discussing its particularsin a public meeting. As dkussed above,
see disatmicn sup0 p. 15, rewttb’ enacted section 15A sppean to pmhiiit board membw from
&ausingthecontentsofateponrromthe commissionerabout an impairedinsurerin a public meeting
entiltbeiahmationismadcpublic%ytbe        cmmissioncr or other lawful authority.” Id. $ lSA(c). In
additieq recently enacted section23(a) appearsto prohibit board membersfrom revealing in a public
mecting Uy eontents of xuwds of negotiations and mectings io which the association or its
qwcmmms negotiatewith a particularimpairedor ins&em insurer. See discussionsupra note 18.

                                            p.   1512
Mr. J. Robert Hunter - Page 19           (~~-284)

such a meeting must be express. C$ Attorney General Opiion DM-207 (1993)
(suggesting that authorization for member of board subject to the Open Meetings Act to
participate in meeting via live video transmission must be express).

         Section 10 of article 21.28-D sets forth the requirements for the LAHHSI guamnty
association’s plan of operation. Subsection (c)(3) provides that the plan of operation must
*establish regular places and times for meetings, including telephone wnkrence calls, of
the board of directors.” We believe that this provision expressly authorizes the board of
directors to meet by telephone conference. We caution, however, that this authorktion
does not exempt the LAHHSI guaranty association’s board meetings f?om any other
aspect of the Open Meetings Act. Therefore, telephone wnference meetings are
otherwise subject to the Open Meetings Act, including its notice requirements. and open
sessions must be available to be heard by the public at the board’s usual meeting place.
See, e.g., Gov’t Code 3 551.121 (as amended by Acts 1993, 73d Leg., ch. 268, 5 1); Ins.
Code art. 9.48, 8 15(g) (as amended by Acts 1993, 73d, Leg., ch. 685, 0 11.07), art.
21.28-C, 4 S(k)(l) (as amended by Acts 1993,73d Leg., ch. 685, $5 9-l 1).

V.   CONCJXSION

         The governing bodies of the Health Maintenance organization‘ Solvency
Smveilkmcc Committee, the Life, Accident, Health, and Hospital Se&e Insurance
Ouaramy Associdon, the Texas Property and Casualty Insurance Guaranty Assoktion,
and the Texas Title Insurance Guaranty Associition am governmental bodies subject to
the Open Meetings Act. Notice of their meetings must be posted by the secntary of state
for at least seven days before the day of the meeting.

         Article 20A36@)(2) of the Insurance Code does not authorize the board of
directors of the HMO solvency smveillance committee to meet in executive session, but
does prohibit the directors ftom revealing the contents of certain makrial in a public
meeting or elsewhere. Section 12 of article 21.28-D of the Insurance Code does not
authorize the board of directors of the LAHHSI guaranty association to meet in executive
session. Section 13 of article 21.28-C of the Insurance Code does not authorize the board
of directors of the PC1 guaranty association to meet in executive session. Section 14(e)(3)
of article 9.48 of the Insurance Code specifically authorizes the board of directors of the
TI guaranty association to meet in executive session to advise the wmmissioner about
matters relating to the solvency of insurers, and precludes the directors from rexaling
information received at such an executive session in a public meeting. Section 10(c)(3) of
article 21.28-D of the Insurance Code authorizes the board of directors of the LAHHSI
guaranty association to meet by telephone wnference.

                                         p.   1513
Mr. J. Robert Hunter - Page 20         (DM-284)

                                 SUMMARY

              The governing bodies of the Health Maintenance Organ&&on
         Solvency Surveillance Committee, Insurance Code article 2OA36,
         the Lie, Accident, Health, and Hospital Service Insurance Guaranty
         Association, Insurance Code article 2 1.28-D, the Texas Property and
         Casualty Insurance Guaranty Association, Insurance Code article
         21.28-C, and the Texas Title Insurance Guaranty Association,
         Insurance Code article 9.48, are governmental bodies subject to the
         Open Meetings Act. Gov’t Code ch. 551 (former V.T.C.S. art.
         6252-17 repealed and codified by Acts 1993, 73d Log., ch. 268,
         3s 1,46). Notice of their meetings must be posted by the secretary
         of state for at least seven days before the day of the meeting.

              Article 20A36@)(2) of the Insurance Code does not authorize
         the board of directors of the HMO solvency surveillance committee
         to meet in executive session, but does pmhiiit the directors from
         revealing the contents of certain mate&l in a public meeting or
         elsewhere. Section 12 of article 21.28-D of the Insurance Code does
         not authorize the board of directors of the LAHHSI guaranty
         association to meet in executive session. Section 13 of article 21.28-
         C of the Insurance Code does not authorize the board of diiectors of
         the PC1 guaranty association to meet in executive session. Section
          M(e)(3) of article 9.48 of the Insurance Code speci6caUy authorizes
         the board of directors of the TI guaranty association to meet in
         executive session to advise the wmmissioner about matters relating
         to the solvency of insurers, and precludes the directors from
         revealing information received at such an executive session in a
         public meeting. Section 10(c)(3) of article 21.28-D of the Insurance
         Code authorizes the board of directors of the LAHHSI guaranty
         association to meet by telephone conference.

                                                   DAN      MORALES
                                                   Attorney General of Texas

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Mr. J. Robert Hunter - Page 21   (DM-284)

JORGE VEGA
Fii ksktant Attorney General

WILL PRYOR
special counseJ

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee

Prepared by Mary R. Grouter
Assistant Attorney General

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