S.B. No. 1291

	AN ACT
	relating to the budget of certain divisions of the Texas Department
	of Insurance.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Chapter 401, Insurance Code, is amended by
	adding Subchapter F to read as follows:
	SUBCHAPTER F.  SELF-DIRECTED BUDGET FOR CERTAIN DIVISIONS
	Sec. 401.251.  DEFINITIONS. In this subchapter:
	(1)  "Actuarial division" means the division within the
	financial program that conducts actuarial examinations of insurers
	and other entities regulated by the department and administers
	state laws relating to the level of reserves required of an insurer.
	(2)  "Examination cost" means a cost associated with
	salary, travel, or other personnel expenses associated with the
	examination of insurers and other entities regulated by the
	department by the financial examinations division or actuarial
	division.
	(3)  "Financial examinations division" means the
	division within the financial program that conducts financial and
	market conduct examinations of insurers and other entities
	regulated by the department.
	(4)  "Financial program" means the program within the
	department through which the department regulates the financial and
	operating conditions of, and issues licenses to, domestic and
	foreign insurers and other entities regulated by the department.
	Sec. 401.252.  SELF-DIRECTED BUDGET. (a)  The senior
	associate commissioner of the financial program shall submit to the
	commissioner an annual budget of examination costs using generally
	accepted accounting principles. Notwithstanding any other
	provision of law, the budget may be adopted and approved only by the
	commissioner.  The commissioner shall approve a budget under this
	subsection not later than August 31 of the year in which the
	associate commissioner submits the budget to the commissioner.
	(b)  The financial program may not directly or indirectly
	cause the Texas Department of Insurance operating account to incur
	any examination cost.
	(c)  Subject to any limitations in this code or another
	insurance law of this state, the department may set the amounts of
	fees required or permitted by statute or rule as necessary to:
	(1)  carry out the functions of the financial
	examinations and actuarial divisions relating to the examination of
	insurers and other regulated entities; and
	(2)  fund the budget adopted and approved under this
	section.
	(d)  Notwithstanding this section, the financial program may
	receive funds appropriated from the state to fund costs other than
	examination costs.
	(e)  An assessment, fee, charge, or other source of revenue
	collected by the financial program relating to the examination of
	insurers and other regulated entities by the financial examinations
	division or actuarial division shall be deposited to the credit of
	the account described by Section 401.156(a) for the purposes
	described by that section.
	Sec. 401.253.  AUDITS. This subchapter does not affect the
	duty of the state auditor to audit the financial program.
	Sec. 401.254.  RECORDS; REPORTING REQUIREMENTS. (a)  The
	financial program shall keep financial and statistical information
	as necessary to disclose completely and accurately the financial
	program's receipts and examination costs.
	(b)  The financial program shall submit to the commissioner
	and the Legislative Budget Board an annual report that states:
	(1)  the revenue received by the financial program from
	assessments and fees collected by the department relating to the
	examination of insurers and other regulated entities;
	(2)  the total salary for each financial program
	employee who performs examinations of insurers and other regulated
	entities;
	(3)  the portion of the salary paid to each employee
	from the self-directed budget approved under Section 401.252;
	(4)  the portion of the salary paid to each employee
	from funds appropriated to the financial program by the state;
	(5)  the total travel expenses incurred by each
	employee who performs examinations of insurers and other regulated
	entities;
	(6)  the portion of travel expenses paid for each
	employee from the self-directed budget approved under Section
	401.252;
	(7)  the portion of travel expenses paid for each
	employee from funds appropriated to the financial program by the
	state; and
	(8)  all other examination costs of the financial
	program.
	Sec. 401.255.  MEMBERSHIP IN EMPLOYEES RETIREMENT SYSTEM.
	Employees of the actuarial division and financial examinations
	division are members of the Employees Retirement System of Texas
	under Chapter 812, Government Code, and the transition to a
	self-directed budget as provided by this subchapter has no effect
	on their membership or any benefits under that system.
	SECTION 2.  Subsection (d), Section 401.151, Insurance Code,
	is amended to read as follows:
	(d)  In determining the amount of the assessment under
	Subsection (c), the department:
	(1)  shall consider:
	(A)  the insurer's total annual premium receipts
	or admitted assets, or both, that are not attributable to 90 percent
	of pension plan contracts as defined by Section 818(a), Internal
	Revenue Code of 1986; or
	(B)  the total amount of the insurer's insurance
	in force; and
	(2)  may not consider insurance premiums for insurance
	contracted for by a state or federal governmental entity to provide
	welfare benefits to designated welfare recipients or contracted for
	in accordance with or in furtherance of Title 2, Human Resources
	Code, or the federal Social Security Act (42 U.S.C. Section 301 et
	seq.).
	SECTION 3.  Section 401.156, Insurance Code, is amended to
	read as follows:
	Sec. 401.156.  DEPOSIT AND USE OF ASSESSMENT AND FEE.
	(a)  The department shall deposit any assessments or fees [an
	assessment or fee] collected under this subchapter relating to the
	examination of insurers and other regulated entities by the
	financial examinations division or actuarial division, as those
	terms are defined by Section 401.251, to the credit of an account
	with the Texas Treasury Safekeeping Trust Company to be used
	exclusively to pay examination costs, as defined by Section 401.251
	[the Texas Department of Insurance operating account].  Money
	deposited under this subsection accumulates and may be disbursed to
	the department in a manner consistent with Subchapter F.
	(b)  Revenue that is not related to the examination of
	insurers or other regulated entities by the financial examinations
	division or actuarial division shall be deposited to the credit of
	the Texas Department of Insurance operating account [Money
	deposited under this section shall be used to pay the salaries and
	expenses of actuaries and examiners and all other expenses relating
	to examinations of insurers].
	(c)  To the extent that another provision of law conflicts
	with this section or a provision of this section, this section or
	the provision of this section controls.
	(d)  The department may transfer funds between the account
	described by Subsection (a) and the Texas Department of Insurance
	operating account as necessary to ensure that funds are deposited
	to the correct account and used for the correct purposes. This
	subsection does not authorize a disbursement or transfer of funds
	in a manner that is inconsistent with the purpose of Subchapter F.
	SECTION 4.  Section 651.005, Insurance Code, is amended to
	read as follows:
	Sec. 651.005.  DEPOSIT AND USE OF FEES. (a)  Except as
	provided by Subsection (b), each [Each] fee collected under this
	chapter:
	(1)  shall be deposited to the credit of the Texas
	Department of Insurance operating account; and
	(2)  may be used by the department to enforce this
	chapter.
	(b)  An assessment or fee associated with examination costs,
	as defined by Section 401.251, shall be deposited to the account
	described by Section 401.156(a).
	SECTION 5.  Section 843.154, Insurance Code, is amended by
	amending Subsection (b) and adding Subsection (b-1) to read as
	follows:
	(b)  Except for fees collected under Subsections (e) and (f),
	fees [Fees] collected under this section shall be deposited to the
	credit of the Texas Department of Insurance operating account.
	(b-1)  A fee collected under Subsection (e) or (f) shall be
	deposited to the credit of the account described by Section
	401.156(a).
	SECTION 6.  Section 4151.206, Insurance Code, is amended by
	amending Subsection (b) and adding Subsection (c) to read as
	follows:
	(b)  The commissioner shall deposit a fee collected under
	Subsection (a)(1) or (3) [this section] to the credit of the Texas
	Department of Insurance operating account.
	(c)  The commissioner shall deposit a fee collected under
	Subsection (a)(2) to the credit of the account described by Section
	401.156(a).
	SECTION 7.  (a)  To provide a reasonable period for the
	financial program, as defined by Section 401.251, Insurance Code,
	as added by this Act, to establish a self-directed budget, for the
	one-year period following the effective date of this Act the Texas
	Department of Insurance shall continue funding the financial
	program within the department using money appropriated to the
	department out of the general revenue fund and shall deposit to the
	credit of the Texas Department of Insurance operating account all
	revenue relating to the examination of insurers and other regulated
	entities by the financial program. The department shall certify to
	the comptroller of public accounts the amounts deposited to the
	credit of the operating account under this subsection.
	(b)  On September 1, 2012, on a finding by the comptroller of
	public accounts that amounts deposited to the credit of the Texas
	Department of Insurance operating account under Subsection (a) of
	this section are sufficient to fulfill the purposes of Subchapter
	F, Chapter 401, Insurance Code, as added by this Act, the
	comptroller shall transfer that amount to the credit of the account
	described by Subsection (a), Section 401.156, Insurance Code, as
	amended by this Act.
	SECTION 8.  This Act takes effect September 1, 2011.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I hereby certify that S.B. No. 1291 passed the Senate on
	April 20, 2011, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	I hereby certify that S.B. No. 1291 passed the House on
	May 19, 2011, by the following vote:  Yeas 148, Nays 0, one
	present not voting.
	______________________________
	Chief Clerk of the House
	Approved:
	______________________________
	Date
	______________________________
	Governor