CHAPTER 501. OFFICE OF PUBLIC INSURANCE COUNSEL
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.