28 TAC §§7.1301 & 7.1302
The Commissioner of Insurance adopts amendments to §7.1301 and new §7.1302 concerning the establishment of a billing system for certain filings. Section 7.1301 is adopted with changes to the proposed text as published in the December 6, 2002 issue of the Texas Register (27 TexReg 11476). Section 7.1302 is adopted without changes to the proposed text and will not be republished.
The amendments and new section are necessary to permit the establishment and implementation of a new billing system for certain filings submitted under Chapters 3 and 11. Upon adoption of new §7.1302 and implementation of a billing system, the fee(s) will no longer be required to be submitted with the filing; instead, the regulated entity submitting the filing will be billed by itemized invoice from the department.
New §7.1302 is necessary to streamline the collection and receipt of filing fees. The billing system will reduce the process of refunding fee amounts received in excess of the actual fee amount and eliminate the need to reject filings due to insufficient fee amounts.
To permit the establishment of a billing system, new §7.1302 addresses the mailing of invoices on a periodic basis for filings received and amounts billed, and billing addresses and billing contact persons for regulated entities submitting filings, including requirements for notifying the department of a change of billing address or billing contact person information. The new section also addresses departmental handling of filing fee account balances, including filing fee accounts with invoice amounts past due and the placement of a hold on a filing fee account for any invoice amount past due 120 days or more.
Upon completion of the development and design of the billing system, the department will issue a commissioner's bulletin to notify regulated entities affected by the billing system of the official implementation date and of the specific date when they should cease submitting filing fee(s) along with certain filings to the department.
Because of the implementation of the billing system adopted in §7.1302, amendments were made to §7.1301. Express fee amounts for certain filings are no longer specified in §7.1301; rather, they are addressed in amendments adopted under Chapter 3, Subchapter A. Therefore, express references to those filings have been deleted from this subchapter. The amendments to Chapter 3, Subchapter A are adopted elsewhere in this issue of the Texas Register. In §7.1301, the date has been changed to June 1, 2003 in order to complete technical and administrative tasks necessary to implement the billing system. Minor changes were also made throughout this section to correct punctuation.
4. SUMMARY OF COMMENTS. No comments were received.
5. STATUTORY AUTHORITY. The sections are adopted pursuant to Insurance Code Articles 3.42, 3.53, 20A.22, 20A.32, and §36.001. Insurance Code Article 3.42(p) provides that the commissioner is authorized to adopt such 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. Insurance Code Article 3.53, §7(H) authorizes the department to charge a fee for forms or schedules filed under the article in an amount to be determined by the department. Insurance Code Article 20A.22 provides that the commissioner may promulgate such reasonable rules as are necessary and proper to carry out the provisions of the HMO Act. Insurance Code Article 20A.32 requires that the expenses for filing fees for every organization subject to Insurance Code Chapter 20A shall be paid in accordance with rules adopted by the commissioner. Insurance Code §36.001 authorizes the commissioner of insurance to adopt rules for the conduct and execution of the powers and duties of the department as authorized by statute.
§7.1301. Regulatory Fees.
(a) Regulated entities subject to fees. The regulated entities subject to the fees imposed by this section shall include all authorized insurers writing any class of insurance in this state which are regulated by the Insurance Code, Chapters 1-3, 6-20, 20A, 22, and 23. For filings and other actions received by the department on and after June 1, 2003, the Texas Department of Insurance shall charge these entities fees in amounts in accordance with the provisions of this section. Filings or other actions received by the department on or before June 1, 2003, shall be governed by this subchapter as it existed immediately prior to June 1, 2003.
(b) Fees for insurers with annual gross premium receipts less than $450,000. As provided in the Insurance Code, Article 4.07, any insurer to which the article applies and whose gross premium receipts are less than $450,000 according to its annual statement for the preceding year ending December 31, shall be required to pay only one-half the amount of the fees required to be paid under subsection (d) or subsection (e) of this section. The fees will be collected at the higher rate unless the applicant can provide the Texas Department of Insurance with satisfactory documentation that gross premium receipts were less than $450,000.
(c) Fees for specified filings pursuant to the Insurance Code, Article 3.42. Fees for specified filings pursuant to the Insurance Code, Article 3.42 are set forth in Chapter 3, Subchapter A of this title (relating to Submission Requirements for Filings and Departmental Actions Related to Such Filings) and shall be governed thereby.
(d) Fees for authorized insurers writing classes of insurance in this state which are regulated by the Insurance Code, Chapters 1-3, 6-20, 20A, 22, and 23. For the following filings and actions, the fees shall be as follows.
(1) For classes of insurance for which statutory authority exists for collecting annual statement fees, the fee for filing annual statements shall be $250 unless otherwise specified.
(2) For filing amendments to certificate of authority if charter is not amended, the fee shall be $50.
(3) For reservation of name, the fee shall be $100.
(4) For renewal of reservation of name, the fee shall be $25.
(5) For filing application for admission of a foreign or alien insurance company, including issuance of certificate of authority, the fee shall be $2,000.
(6) For filing original charter, including issuance of certificate of authority, the fee shall be $1,500.
(7) For filing amendment to charter, including issuance of certificate of authority, if a hearing is held, the fee shall be $250.
(8) For filing amendment to charter, including issuance of certificate of authority, if a hearing is not held, the fee shall be $125.
(9) For filing designation of attorney for service of process or amendment thereto, the fee shall be $25.
(10) For filing a total reinsurance agreement, the fee shall be $750.
(11) For filing a partial reinsurance agreement, the fee shall be $150.
(12) For filing a direct reinsurance agreement pursuant to the Insurance Code, Article 22.19, the fee shall be $150.
(13) For filing for approval of reinsurance agreement pursuant to the Insurance Code, Article 21.26, the fee shall be $750.
(14) For filing for approval of merger pursuant to the Insurance Code, Article 21.25, the fee shall be $750.
(15) For accepting a security deposit, excluding deposits made pursuant to the Insurance Code, Article 3.16, the fee shall be $100.
(16) For substitution/amendment of a security deposit, excluding deposits made pursuant to the Insurance Code, Article 3.16, the fee shall be $50.
(17) For certification of statutory deposit, the fee shall be $10.
(18) For filing notice of intent to relocate the books/records pursuant to the Insurance Code, Article 1.28, the fee shall be $150.
(19) For filing restated articles of incorporation for domestic/foreign companies, the fee shall be $250.
(20) For filing a statement pursuant to the Insurance Code, Article 21.49-1, §5, for the first $9,900,000 of the purchase price or consideration, the fee shall be $500.
(21) For filing a statement pursuant to the Insurance Code, Article 21.49-1, §5, if the purchase price or consideration exceeds $9,900,000, an additional $250 for each $10 million exceeding $9,900,000 but not more than a $5,000 total fee.
(22) For filing registration statement pursuant to the Insurance Code, Article 21.49-1, §3, the fee shall be $150.
(23) For filing for review pursuant to the Insurance Code, Article 21.49-1, §4 or Article 22.15, the fee shall be $250.
(24) For filing for an exemption pursuant to the Insurance Code, Article 21.49-1, §5(e), the fee shall be $250.
(e) Other fees established by the Insurance Code, Article 4.07. For the following filings, the fee shall be as follows.
(1) For filing joint control agreement, the fee shall be $50.
(2) For filing substitution/amendment to the joint control agreement, the fee shall be $20.
(3) For filing a change in attorney in fact, the fee shall be $500.
(f) Administrative procedures.
(1) When a reinsurance agreement or merger agreement is filed with the Texas Department of Insurance, as enumerated in subsection (d)(11)-(15) of this section, the ceding or merged company will be the company upon which the determination of the appropriate fee to be assessed will be based.
(2) The fee relating to reinsurance transactions entered into pursuant to the Insurance Code, Article 21.49-1, §4, and subsection (d)(24) of this section shall be determined using the ceding company as a basis for such fee.
(3) When an amendment to a reinsurance agreement between affiliated insurers is filed with the Texas Department of Insurance, as mentioned in paragraph (1) of this subsection, the ceding company will be the insurer upon which the determination of the appropriate fee to be charged will be based.
(4) An amendment to the charter would constitute any change in the original charter, including, but not limited to, name change, home office change, increase in capital, conversion, and increase in lines.
(5) The fee relating to affixing the official seal and certifying to the seal shall be applied to all requests for certification, irrespective of requesting party.
(6) The fees for filing an acquisition statement pursuant to the Insurance Code, Article 21.49-1, §5 and subsection (d)(21) and (22) of this section shall apply to and be collected from the applicant whenever:
(A) the applicant is a regulated entity subject to this section; or
(B) the company being acquired is a regulated entity subject to this section.
(g) Fees pursuant to the Texas Health Maintenance Organization Act, §32. For the following filings and actions, the fees shall be as follows.
(1) For filing original application for certificate of authority, the fee shall be $7,500.
(2) For filing annual report, the fee shall be $250.
(3) For all examinations made on behalf of the State of Texas by the Texas Department of Insurance or under its authority, the fee shall be in such amounts as the commissioner shall certify to be just and reasonable.
(4) For filing evidence of coverage which requires approval, the fee shall be $100.
(5) For filing required by rule but which do not require approval, the fee shall be $50.
(h) Fees under the Insurance Code, Article 23.08. For the following filings and actions, the fees shall be as follows.
(1) For filing annual statement, the fee shall be $200.
(2) For application for certificate of authority, the fee shall be $1,500.
(3) For issuance of additional certificate of authority and amendment to same, the fee shall be $50.
(i) Fees for filings pursuant to the Insurance Code, Article 3.53. Fees for filings pursuant to the Insurance Code, Article 3.53 are set forth in Chapter 3, Subchapter A of this title and shall be governed thereby.
(j) Fees under the Insurance Code, Chapter 3. For the following filings and actions, the fees shall be as follows.
(1) For valuing policies of life insurance, and for each $1 million of insurance or fraction thereof, $10.
(2) For filing the annual statement, $250.
§7.1302. Billing System.
(a) The following regulated entities shall be subject to the billing system established by this section:
(1) regulated entities submitting filings requiring a fee pursuant to §§3.1, et seq, of this title (relating to Scope); and
(2) regulated entities submitting filings requiring a fee pursuant to §11.301(4)(A), (B), and (L) and (5)(C), (G), (K), (M), and (N) of this title (relating to Filing Requirements).
(b) As of the effective date of this section, the department shall, as soon as practical and possible, implement a billing system whereby each regulated entity identified in subsection (a) of this section will be billed by invoice.
(c) The department shall mail the invoice to the regulated entity´s last billing address on file with the Filings Intake Division of the Texas Department of Insurance, and shall include the name of the billing contact person and an itemization of all filings and fee amounts for which the processing of the form has been completed (e.g., approved, disapproved, withdrawn, or exempted).
(d) If there is a change to a regulated entity´s billing address or billing contact person, the regulated entity shall submit written notification of the change to the Texas Department of Insurance, Filings Intake Division, Mail Code 106-1E, P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas 78701, or by emailing lifehealth@tdi.state.tx.us.
(e) An invoice issued by the department shall become due and payable upon receipt by the designated billing contact person.
(f) In the event an invoice becomes past due 120 days or more, the department shall place a hold on the regulated entity´s filing fee account with the department. The department may elect not to place a hold on a regulated entity´s filing fee account if, as determined by the department, extenuating circumstances exist beyond the control of the regulated entity which impede the regulated entity´s ability to pay an overdue amount (e.g., natural disasters, etc.).
(g) If a hold is placed on a regulated entity´s filing fee account pursuant to subsection (f) of this section, the regulated entity shall be subject to the following:
(1) The regulated entity shall pay the amount past due 120 days or more plus any other filing fee amounts that have been billed and not paid, before the hold may be removed from the regulated entity´s filing fee account.
(2) Filings received prior to the date the hold is placed on the regulated entity´s filing fee account shall be processed in accordance with the requirements of §§3.1, et seq. of this title, and §11.301 of this title until the processing of the form has been completed (e.g., approved, disapproved, withdrawn, or exempted).
(3) Filings received by the department on or after the date the hold is placed on the regulated entity´s filing fee account shall be rejected by the department and shall not be accepted until all filing fee amounts for which an invoice has been issued are paid and cleared, and the hold is removed.
(h) A filing fee is not required to be attached to a filing submitted on or after the implementation of the billing system established by this section. Any filing fee submitted with a filing shall be credited to the regulated entity´s filing fee account with the department.