CHAPTER 501. OFFICE OF PUBLIC INSURANCE COUNSEL - Texas Statutes

INSURANCE CODE

TITLE 5. PROTECTION OF CONSUMER INTERESTS

SUBTITLE A. PUBLIC INSURANCE COUNSEL

CHAPTER 501. OFFICE OF PUBLIC INSURANCE COUNSEL

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 501.001. DEFINITION. In this chapter, "office" means the

office of public insurance counsel.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.002. OFFICE OF PUBLIC INSURANCE COUNSEL. The

independent office of public insurance counsel represents the

interests of insurance consumers in this state.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.003. SUNSET PROVISION. The office is subject to

Chapter 325, Government Code (Texas Sunset Act). Unless

continued in existence as provided by that chapter, the office is

abolished September 1, 2011.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2005, 79th Leg., Ch.

1227, Sec. 2.06, eff. September 1, 2005.

Acts 2009, 81st Leg., 1st C.S., Ch.

2, Sec. 1.07, eff. July 10, 2009.

Sec. 501.004. PUBLIC INTEREST INFORMATION. (a) The office

shall prepare information of public interest describing the

functions of the office.

(b) The office shall make the information available to the

public and appropriate state agencies.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.005. ACCESS TO PROGRAMS AND FACILITIES. (a) The

office shall prepare and maintain a written plan that describes

how a person who does not speak English can be provided

reasonable access to the office's programs.

(b) The office shall comply with federal and state laws for

program and facility accessibility.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER B. PUBLIC COUNSEL

Sec. 501.051. APPOINTMENT; TERM. (a) The governor, with the

advice and consent of the senate, shall appoint a public counsel

to serve as the executive director of the office. The public

counsel serves a two-year term that expires on February 1 of each

odd-numbered year.

(b) The governor shall appoint the public counsel without regard

to the race, color, disability, sex, religion, age, or national

origin of the appointee.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.052. QUALIFICATIONS. To be eligible to serve as public

counsel, a person must:

(1) be licensed to practice law in this state;

(2) have demonstrated a strong commitment to and involvement in

efforts to safeguard the rights of the public; and

(3) possess the knowledge and experience necessary to practice

effectively in insurance proceedings.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.053. BUSINESS INTEREST; SERVICE AS PUBLIC COUNSEL. A

person is not eligible for appointment as public counsel if the

person or the person's spouse:

(1) is employed by or participates in the management of a

business entity or other organization regulated by or receiving

funds from the department;

(2) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

regulated by or receiving funds from the department or the

office; or

(3) uses or receives a substantial amount of tangible goods,

services, or funds from the department or the office, other than

compensation or reimbursement authorized by law for department or

office membership, attendance, or expenses.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.054. LOBBYING ACTIVITIES. A person may not serve as

public counsel or act as general counsel to the office if the

person is required to register as a lobbyist under Chapter 305,

Government Code, because of the person's activities for

compensation related to the operation of the department or the

office.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.055. GROUNDS FOR REMOVAL. (a) It is a ground for

removal from office if the public counsel:

(1) does not have at the time of appointment or maintain during

service as public counsel the qualifications required by Section

501.052;

(2) violates a prohibition established by Section 501.053,

501.054, 501.056, or 501.102; or

(3) cannot, because of illness or disability, discharge the

public counsel's duties for a substantial part of the public

counsel's term.

(b) The validity of an action of the office is not affected by

the fact that the action is taken when a ground for removal of

the public counsel exists.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.056. PROHIBITED REPRESENTATION OR EMPLOYMENT. A former

public counsel may not represent any person or receive

compensation for services rendered on behalf of any person

regarding a case pending before the commissioner or department

before the second anniversary of the date the person ceases to

serve as public counsel.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER C. PERSONNEL

Sec. 501.101. OFFICE PERSONNEL. (a) The public counsel shall

employ professional, technical, and other employees necessary to

implement this chapter.

(b) Compensation for an employee shall be set under the General

Appropriations Act as provided by the legislature.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.102. TRADE ASSOCIATIONS. (a) In this section, "trade

association" means a nonprofit, cooperative, and voluntarily

joined association of business or professional competitors

designed to assist its members and its industry or profession in

dealing with mutual business or professional problems and in

promoting their common interest.

(b) A person may not serve as public counsel or be an employee

of the office who is exempt from the state's position

classification plan or is compensated at or above the amount

prescribed by the General Appropriations Act for step 1, salary

group A17, of the position classification salary schedule if the

person is:

(1) an officer, employee, or paid consultant of a trade

association in the field of insurance; or

(2) the spouse of an officer, manager, or paid consultant of a

trade association in the field of insurance.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.103. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS.

(a) The public counsel or the public counsel's designee shall

develop an intra-agency career ladder program. The program must

require intra-agency posting of all nonentry level positions

concurrently with any public posting.

(b) The public counsel or the public counsel's designee shall

develop a system of annual performance evaluations. All merit pay

for office employees must be based on the system established

under this subsection.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.104. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT. (a)

The public counsel or the public counsel's designee shall prepare

and maintain a written policy statement to ensure implementation

of an equal employment opportunity program under which all

personnel transactions are made without regard to race, color,

disability, sex, religion, age, or national origin. The policy

statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, appointment, training, and

promotion of personnel that are in compliance with the

requirements of Chapter 21, Labor Code;

(2) a comprehensive analysis of the office workforce that meets

federal and state guidelines;

(3) procedures by which a determination can be made about areas

of significant underuse in the office workforce of all persons

for whom federal or state guidelines encourage a more equitable

balance; and

(4) reasonable methods to appropriately address those areas of

significant underuse.

(b) A policy statement prepared under Subsection (a) must:

(1) cover an annual period;

(2) be updated at least annually;

(3) be reviewed by the Commission on Human Rights for compliance

with Subsection (a)(1); and

(4) be filed with the governor.

(c) The governor shall deliver a biennial report to the

legislature based on the information received under Subsection

(b). The report may be made separately or as a part of other

biennial reports to the legislature.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.105. QUALIFICATIONS AND STANDARDS OF CONDUCT. The

office shall provide to the public counsel and office employees,

as often as necessary, information regarding their:

(1) qualifications for office or employment under this chapter;

and

(2) responsibilities under applicable laws relating to standards

of conduct for state officers or employees.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER D. POWERS AND DUTIES

Sec. 501.151. POWERS AND DUTIES OF OFFICE. The office:

(1) may assess the impact of insurance rates, rules, and forms

on insurance consumers in this state; and

(2) shall advocate in the office's own name positions determined

by the public counsel to be most advantageous to a substantial

number of insurance consumers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.152. ADMINISTRATION OF OFFICE. The public counsel

shall administer and enforce this chapter, including preparing

and submitting to the legislature a budget for the office and

approving expenditures for professional services, travel, per

diem, and other actual and necessary expenses incurred in

administering the office.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.153. AUTHORITY TO APPEAR, INTERVENE, OR INITIATE. The

public counsel:

(1) may appear or intervene, as a party or otherwise, as a

matter of right before the commissioner or department on behalf

of insurance consumers, as a class, in matters involving:

(A) rates, rules, and forms affecting:

(i) property and casualty insurance;

(ii) title insurance;

(iii) credit life insurance;

(iv) credit accident and health insurance; or

(v) any other line of insurance for which the commissioner or

department promulgates, sets, adopts, or approves rates, rules,

or forms;

(B) rules affecting life, health, or accident insurance; or

(C) withdrawal of approval of policy forms:

(i) in proceedings initiated by the department under Sections

1701.055 and 1701.057; or

(ii) if the public counsel presents persuasive evidence to the

department that the forms do not comply with this code, a rule

adopted under this code, or any other law;

(2) may initiate or intervene as a matter of right or otherwise

appear in a judicial proceeding involving or arising from an

action taken by an administrative agency in a proceeding in which

the public counsel previously appeared under the authority

granted by this chapter;

(3) may appear or intervene, as a party or otherwise, as a

matter of right on behalf of insurance consumers as a class in

any proceeding in which the public counsel determines that

insurance consumers are in need of representation, except that

the public counsel may not intervene in an enforcement or parens

patriae proceeding brought by the attorney general; and

(4) may appear or intervene before the commissioner or

department as a party or otherwise on behalf of small commercial

insurance consumers, as a class, in a matter involving rates,

rules, or forms affecting commercial insurance consumers, as a

class, in any proceeding in which the public counsel determines

that small commercial consumers are in need of representation.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.154. ACCESS TO INFORMATION. The public counsel:

(1) is entitled to the same access as a party, other than

department staff, to department records available in a proceeding

before the commissioner or department under the authority granted

to the public counsel by this chapter; and

(2) is entitled to obtain discovery under Chapter 2001,

Government Code, of any nonprivileged matter that is relevant to

the subject matter involved in a proceeding or submission before

the commissioner or department as authorized by this chapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.155. RECOMMENDATION OF LEGISLATION. The public counsel

may recommend legislation to the legislature that the public

counsel determines would positively affect the interests of

insurance consumers.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.156. CONSUMER BILL OF RIGHTS. The public counsel shall

submit to the department for adoption a consumer bill of rights

appropriate to each personal line of insurance regulated by the

department to be distributed on issuance of a policy by an

insurer to each policyholder under department rules.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.157. PROHIBITED INTERVENTIONS OR APPEARANCES. The

public counsel may not intervene or appear in:

(1) any proceeding or hearing before the commissioner or

department, or any other proceeding, that relates to approval or

consideration of an individual charter, license, certificate of

authority, acquisition, merger, or examination; or

(2) any proceeding concerning the solvency of an individual

insurer, a financial issue, a policy form, advertising, or

another regulatory issue affecting an individual insurer or

agent.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.158. CONFIDENTIALITY REQUIREMENTS. Confidentiality

requirements applicable to examination reports under Sections

401.105 and 401.106 and to the commissioner under Section 441.201

apply to the public counsel.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.001, eff. April 1, 2009.

Sec. 501.159. COMMENTS ON CERTAIN INSURER FILINGS. (a)

Notwithstanding this chapter, the office may submit written

comments to the commissioner and otherwise participate regarding

individual insurer filings made under Chapters 2251 and 2301

relating to insurance described by Subchapter B, Chapter 2301.

(b) The commissioner may adopt reasonable and necessary rules to

implement this section.

Added by Acts 2005, 79th Leg., Ch.

727, Sec. 14, eff. April 1, 2007.

SUBCHAPTER E. ASSESSMENTS

Sec. 501.201. OFFICE EXPENSES. Expenses of the office shall be

paid from the assessments collected under this subchapter.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.202. ASSESSMENT. To defray the costs of operating the

office, the comptroller shall collect assessments under this

subchapter annually in connection with the collection of other

taxes imposed on an insurer.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.203. ASSESSMENT ON PROPERTY AND CASUALTY INSURERS.

Each property and casualty insurer authorized to engage in

business in this state shall pay an annual assessment of 5.7

cents for each property and casualty insurance policy in force in

this state at the end of the year.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.204. ASSESSMENT ON LIFE, HEALTH, AND ACCIDENT INSURERS

AND RELATED ENTITIES. (a) This section applies to each insurer

authorized to engage in business in this state under:

(1) Chapter 841;

(2) Chapter 842;

(3) Section 1367.053, Subchapter A, Chapter 1452, Subchapter B,

Chapter 1507, Chapter 222, 251, or 258, as applicable to a health

maintenance organization, Chapter 843, Chapter 1271, or Chapter

1272;

(4) Chapter 882;

(5) Chapter 884;

(6) Chapter 885;

(7) Chapter 887;

(8) Chapter 888;

(9) Chapter 961;

(10) Chapter 962;

(11) Chapter 982;

(12) Subchapter B, Chapter 1103;

(13) Subchapter A, Chapter 1104;

(14) Chapter 1201, or a provision listed in Section 1201.005;

(15) Chapter 1551;

(16) Chapter 1578; or

(17) Chapter 1601.

(b) Each insurer subject to this section shall pay an annual

assessment of 5.7 cents for each individual policy, and for each

certificate of insurance evidencing coverage under a group

policy, of life, health, or accident insurance that is written

for delivery and placed in force in this state during each

calendar year and for which the initial premium is paid in full.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

730, Sec. 2D.002, eff. April 1, 2009.

Sec. 501.205. ASSESSMENT ON TITLE INSURANCE COMPANIES. Each

title insurance company authorized to engage in business in this

state shall pay an annual assessment of 5.7 cents for each owner

and mortgage policy that is written for delivery in this state

during each calendar year and for which the full basic premium is

charged.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

SUBCHAPTER F. DUTIES RELATING TO HEALTH MAINTENANCE ORGANIZATIONS

Sec. 501.251. COMPARISON OF HEALTH MAINTENANCE ORGANIZATIONS.

(a) The office shall develop and implement a system to compare

and evaluate, on an objective basis, the quality of care provided

by and the performance of health maintenance organizations

established under Chapter 843.

(b) In developing the system, the office may use information or

data from a person, agency, organization, or governmental unit

that the office considers reliable.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.252. ANNUAL CONSUMER REPORT CARDS. (a) The office

shall develop and issue annual consumer report cards that

identify and compare, on an objective basis, health maintenance

organizations in this state. The consumer report cards may be

based on information or data from any person, agency,

organization, or governmental unit that the office considers

reliable.

(b) The office may not endorse or recommend a specific health

maintenance organization or plan, or subjectively rate or rank

health maintenance organizations or plans, other than through

comparison and evaluation of objective criteria.

(c) The office shall provide a copy of any consumer report card

on request on payment of a reasonable fee.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.253. ACCESS TO INFORMATION. (a) The office is

entitled to information that is confidential under a law of this

state, including Section 843.006 of this code, Chapter 108,

Health and Safety Code, and Chapter 552, Government Code.

(b) The department and the Texas Health Care Information Council

shall provide any information or data as requested by the office

in furtherance of the duties under this subchapter.

(c) The office shall use information collected or received under

this subchapter for the benefit of the public.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.

Sec. 501.254. CONFIDENTIALITY AND USE OF INFORMATION. (a)

Except as provided by this section, information collected under

this subchapter is subject to Chapter 552, Government Code, and

the office shall make determinations on requests for information

in favor of access.

(b) The office may not make public any confidential information

provided to the office under this subchapter but may disclose a

summary of the information that does not directly or indirectly

identify the health maintenance organization that is the subject

of the information. The office may not release, and a person or

entity may not gain access to, any information that:

(1) could reasonably be expected to reveal the identity of a

patient or physician;

(2) reveals the zip code of a patient's primary residence;

(3) discloses a provider discount or a differential between a

payment and a billed charge; or

(4) relates to an actual payment made by a payer to an

identified provider.

(c) Information collected or used by the office under this

subchapter is subject to the confidentiality provisions and

criminal penalties of:

(1) Section 81.103, Health and Safety Code;

(2) Section 311.037, Health and Safety Code; and

(3) Chapter 159, Occupations Code.

(d) Information on patients and physicians that is in the

possession of the office and any compilation, report, or analysis

produced from the information that identifies patients and

physicians is not:

(1) subject to discovery, subpoena, or other means of legal

compulsion for release to any person or entity; or

(2) admissible in any civil, administrative, or criminal

proceeding.

(e) Notwithstanding Subsection (b)(2), the office may use zip

code information to analyze information on a geographical basis.

Added by Acts 2003, 78th Leg., ch. 1274, Sec. 2, eff. April 1,

2005.