(1) General provisions.
(A) In accordance with Insurance Code §
2203.101 and §
2203.103, the
Commissioner will establish by order the categories of physicians and other
health care providers, including health care practitioners, and health care
facilities, who are eligible to obtain coverage from the association. The order
may indicate the stabilization reserve fund appropriate to the new category and
may be revised from time to time to include or exclude from eligibility some
categories of health care providers and physicians.
(B) The following provisions also govern the
stabilization reserve funds under Insurance Code §
2203.301 and §
2203.303:
(i) Within 15 days after the effective date
of any Commissioner order establishing eligibility, the board of directors must
extend invitations to the appropriate Texas organizations representing eligible
§2203.301 fund health care providers and physicians and §2203.303
fund for-profit and not-for-profit nursing homes and assisted living facilities
to each designate an advisory director to represent each eligible category of
§2203.301 fund health care provider and physician and §2203.303 fund
for-profit and not-for-profit nursing home and assisted living facility, and
advise the association of its choice of director.
(ii) Each designated advisory director has a
vote on any matter coming before any meeting of the entire body of advisory
directors for the §2203.301 fund or §2203.303 fund to which the
advisory director has been designated. That vote will be weighted in the
proportion that the net written premium collected during the most recent
calendar year from policies issued to each category of §2203.301 fund
health care provider and physician or §2203.303 fund for-profit or
not-for-profit nursing home and assisted living facility bears to the total net
written premiums collected from all categories of §2203.301 fund health
care providers and physicians or to all categories of §2203.303 fund
for-profit and not-for-profit nursing homes and assisted living facilities as
applicable during the same calendar year. The proportion of weighting of the
advisory directors' votes for the §2203.301 fund and the §2203.303
fund respectively must be determined annually by the association, not later
than August 31.
(iii) The
designated advisory directors for the §2203.301 fund and the
§2203.303 fund respectively must meet not later than September 15 of each
year, at a place in Texas stipulated by the board of directors to consider the
amount of funds available and the status of the respective §2203.301 fund
or §2203.303 fund. The designated advisory directors for the respective
§2203.301 fund and §2203.303 fund must inform the board of directors
of the percentage to be charged to all policyholders of all policies issued or
renewed by the association for the respective §2203.301 fund or
§2203.303 fund during the next calendar year. This percentage must be
communicated to the board of directors no later than September 20,
annually.
(iv) If any organization
described in clause (i) of this subparagraph fails to designate an advisory
director, the directors designated by the remaining organizations constitute
the entire body of advisory directors for the respective §2203.301 fund or
§2203.303 fund, and their establishment of the respective §2203.301
fund or §2203.303 fund charge must be accepted as valid by the association
and imposed pursuant to the operational procedures of the association, upon
approval of the department.
(v) In
the event that the advisory directors fail to establish a specific percentage
charge for the respective §2203.301 fund or §2203.303 fund to be
collected for the coming calendar year before the applicable deadline, the
board of directors must immediately submit for approval by the Commissioner a
charge to be collected from the respective §2203.301 fund or
§2203.303 fund policyholders of each new and renewal policy during the
upcoming calendar year in accordance with the provisions of the Insurance
Code.
(vi) The advisory directors
serve without salary or other fee, and they may not be reimbursed for any
expenses. The advisory directors, in the performance of their duties, will be
afforded the protection of §
5.2002(h) of
this title (relating to Operation of the Texas Medical Liability Insurance
Underwriting Association).
(C) The respective §2203.301 fund or
§2203.303 fund charge must be collected annually from each policyholder of
the applicable §2203.301 or §2203.303 fund, as may be appropriate,
and must be stated as a percentage of the annual premium due for all coverages
on all policies issued or renewed on or after the effective date of the charge.
The percentage charge will remain in effect until changed in accordance with
subparagraph (B) of this paragraph.
(D) The respective §2203.301 fund or
§2203.303 fund charge must be separately stated in the policy, but may not
constitute a part of premium or be subject to premium taxation, servicing fees,
acquisition costs, commissions, or any other such charges. Further, the
respective fund charge will not be considered premiums for the purpose of any
assessments levied under subsection (d) of this section.
(E) The respective §2203.301 fund or
§2203.303 fund charges must be collected and administered by the
association and must be treated as a liability of the association along with
and in the same manner as premium and loss reserves. The §2203.301 fund
and the §2203.303 fund must be valued annually by the board of directors
within 90 days of the last day of the preceding calendar year.
(F) Collections of the respective
§2203.301 fund or §2203.303 fund charge must continue throughout each
calendar year for which they are established, provided that no charge will be
made during the next succeeding calendar year if the net balance in the
respective fund after recoupment of any prior year's deficit equals or exceeds
the association's estimate of the projected sum of premiums to be written in
the calendar year following the valuation date of the respective
fund.