Texas Register, Volume 25, Number 44, Pages 10833-11184, November 3, 2000 Page: 10,870
10833-11184 p. ; 28 cm.View a full description of this periodical.
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This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal author-
ity to adopt.
Filed with the Office of the Secretary of State, on October 23,
2000.
TRD-200007449
Donna Samuelson
Deputy Executive Director
Interagency Council on Early Childhood Intervention
Earliest possible date of adoption: December 3, 2000
For further information, please call: (512) 424-6750
TITLE 28. INSURANCE
PART 1. TEXAS DEPARTMENT OF
INSURANCE
CHAPTER 1. GENERAL ADMINISTRATION
SUBCHAPTER C. MAINTENANCE TAXES
AND FEES
28 TAC 1.414
The Texas Department of Insurance proposes an amendment to
1.414, concerning assessment of maintenance taxes and fees
for payment in the year 2001. The amendment is necessary to
adjust the rates of assessment for maintenance taxes and fees
for 2001 on the basis of gross premium receipts for calendar year
2000 or on some other designated basis. Section 1.414 sets
rates of assessment and applies those rates to life, accident,
and health insurance; motor vehicle insurance; casualty insur-
ance, and fidelity, guaranty and surety bonds; fire insurance and
allied lines, including inland marine; workers' compensation in-
surance; title insurance; health maintenance organizations; third
party administrators; and corporations issuing prepaid legal ser-
vices contracts.
Karen A. Phillips, Chief Financial Officer, has determined that for
the first five-year period the proposed section is in effect, the an-
ticipated fiscal impact on state government is estimated income
of $42,165,670 to the state's general revenue fund. There will be
no fiscal implications for local government as a result of enforc-
ing or administering the proposed amended section, and there
will be no effect on local employment or local economy.
Ms. Phillips has determined that for each year of the first five
years the amended section is in effect, the public benefit antici-
pated as a result of enforcing the section will be facilitation in the
collection of maintenance tax and fee assessments. The cost
in 2001 to an insurer receiving premiums in 2000 for motor ve-
hicle insurance will be .057 of 1.0% of those gross premiums;
for casualty insurance, fidelity, guaranty and surety bonds, .186
of 1.0% of those gross premiums; for fire insurance and allied
lines, including inland marine, .352 of 1.0% of those gross pre-
miums; for workers' compensation insurance, .060 of 1.0% of
those gross premiums; and for title insurance, .086 of 1.0% of
those gross premiums. The cost in 2001 for an insurer receiv-
ing premiums in 2000 for life, health, and accident insurance,
will be .040 of 1.0% of those gross premiums. In 2001, a health
maintenance organization will pay $.37 per enrollee if it is a sin-
gle service health maintenance organization or a limited servicehealth maintenance organization, and $1.11 per enrollee if it is a
multi-service health maintenance organization. In 2001, a third
party administrator will pay .237 of 1.0% of its correctly reported
gross amount of administrative or service fees received in 2000.
In 2001, for a corporation issuing prepaid legal service contracts,
the cost will be .02 of 1.0% of correctly reported gross revenues
for 2000. There will be no difference in rates of assessment be-
tween micro, small and large businesses. Based on the depart-
ment's experience, the actual cost of gathering the information
required to fill out the form, calculate the assessment and com-
plete the form will be the same for micro, small and large busi-
nesses. Generally a person familiar with the accounting records
of the company and accounting practices in general will perform
the activities necessary to comply with the section. Such per-
sons are similarly compensated by small and large insurers. The
compensation is generally between $17-$30 an hour. The actual
amount of time necessary to complete the form will vary depend-
ing on the number of lines of insurance written by the company.
For a company that writes only one line of business subject to the
tax, the department estimates it will take two hours to complete
the form. If a company writes all the lines subject to the tax, the
department estimates it will take six hours to complete the form.
The department does not believe it is legal or feasible to waive
or modify the requirements of the proposed section for small and
micro businesses because the assessment is required by statute
and makes no provision for waiving or reducing assessments for
small or micro-businesses.
To be considered, comments on the proposal must be received
in writing no later than 5:00 p.m., on December 4, 2000. All
comments should be submitted to Lynda H. Nesenholtz, Gen-
eral Counsel and Chief Clerk, Mail Code 113-2A, Texas De-
partment of Insurance, P.O. Box 149104, Austin, Texas, 78714-
9104. An additional copy of the comments should be simultane-
ously submitted to Karen A. Phillips, Chief Financial Officer, Mail
Code 108-1A, Texas Department of Insurance, P.O. Box 149104,
Austin, Texas, 78714-9104. A request for public hearing should
be submitted separately to the Office of the Chief Clerk.
The amendment is proposed under the Insurance Code Articles
4.17, 5.12, 5.24, 5.49, 5.68, 9.46, 21.07-6 21, 23.08A, and
20A.33 and 36.001. These articles provide authorization for
the Texas Department of Insurance to assess maintenance taxes
and fees for the lines of insurance and related activities specified
in amended 1.414. Article 4.17 establishes a maintenance tax
based on insurance premiums for life, accident, and health cov-
erage and the gross considerations for annuity and endowment
contracts. Article 5.12 establishes a maintenance tax based on
insurance premiums for motor vehicle coverage. Article 5.24 es-
tablishes a maintenance tax based on insurance premiums for
casualty insurance and fidelity, guaranty and surety bonds cov-
erage. Article 5.49 establishes a maintenance tax based on in-
surance premiums for fire and allied lines coverage, including in-
land marine. Article 5.68 establishes a maintenance tax based
on insurance premiums for workers' compensation coverage. Ar-
ticle 9.46 establishes a maintenance fee based on insurance
premiums for title coverage. Article 21.07-6 21 establishes a
maintenance tax based on the gross amount of administrative
or service fees for third party administrators. Article 23.08A es-
tablishes a maintenance tax based on gross revenue of corpora-
tions issuing prepaid legal service contracts. The Texas Health
Maintenance Organization Act, Section 33 (Article 20A.33), es-
tablishes an annual tax based on the gross amounts of revenues
collected for the issuance of health maintenance certificates or25 TexReg 10870 November 3, 2000 Texas Register
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Texas. Secretary of State. Texas Register, Volume 25, Number 44, Pages 10833-11184, November 3, 2000, periodical, November 3, 2000; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth113968/m1/39/: accessed May 21, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.