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  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