HBA-TBM H.B. 1709 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1709
By: Averitt
Insurance
4/8/2001
Introduced



BACKGROUND AND PURPOSE 

The Texas Health Insurance Risk Pool (pool) was created to comply with the
federal Health Insurance Portability and Accountability Act and to provide
quality health care to Texans with preexisting conditions who otherwise
could not obtain health insurance.  The cost for the coverage provided
through the pool is paid by the insured through premiums and by insurers
through assessments.  From 1998 to 2000, the assessments collected from
insurers has increased from approximately $10 million to approximately $67
million.  House Bill 1709 provides a premium tax credit to an insurer for
the amount of assessment paid to the pool and requires the commissioner of
insurance to appoint an advisory committee to suggest funding alternatives
to assessments.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 1709 amends the Insurance Code to set forth provisions regarding
a premium tax credit for insurers.  The bill provides that 100 percent of
any assessment paid by an insurer to the Texas Health Insurance Risk Pool
(pool) for organizational and interim operating expenses during any
calendar year shall be allowed to that insurer as a credit against its
premium tax liability to this state for any year.  The tax credit shall be
allowed at a rate of 10 percent per year for 10 successive years following
the date of assessment and at the option of the insurer may be taken over
an additional number of years.  The bill prohibits an insurer from being
required to write off in any one year an amount in excess of its premium
tax liability to this state accruing within that year or any succeeding
year.  The balance of any unused tax credit not claimed in a particular
year may be reflected in the books and records of the insurer as an
admitted asset of the insurer for all purposes, including exhibition in
annual statements filed with the Texas Department of Insurance (TDI).
Available credit against premium tax may be transferred or assigned among
or between insurers if a merger, acquisition, or total assumption of
reinsurance occurs among or between the insurers or the commissioner of
insurance (commissioner) by order approves the transfer or assignment.   

The bill requires the commissioner to appoint an advisory committee to
study funding for operational losses and other deficits of the pool and to
recommend appropriate mechanisms for funding as an alternative to
assessments imposed by TDI.  The bill sets forth the composition of the
committee.  The bill requires the committee to report its findings and
recommendations to the commissioner, the speaker of the house of
representatives, and the lieutenant governor not later than December 1,
2002.  

EFFECTIVE DATE

September 1, 2001.