Texas Register, Volume 11, Number 2, Pages 81-106, January 7, 1986 Page: 85
81-106 p. ; 28 cm.View a full description of this periodical.
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Emergency .
Ru les An agency may adopt a new or amended rule, or repeal an existing rule on an emergency basis,
if It determines that such action is necessary for the public health, safety, or welfare of this state.
The rule may become effective immediately upon filing with the Texas Register, or on a stated date less than
20 days after filing, for no more than 120 days. The emergency action is renewable once for no more than 60 days.
Symbology in amended emergency rules. New language added to an existing rule is indicated by the use of
bold text. [Brackets] indicate deletion of existing material within a rule.TITLE 28. INSURANCE
Part I. State Board of
Insurance
Chapter 5. Property and
Casualty Insurance
Subchapter C. Texas Medical
Liability Insurance Underwriting
Association
*28 TAC 5.2003, 5.2004
The State Board of Insurance adopts
emergency amendments to 5.2003 and
5.2004.
The amendments to 5.2003(c)(2) and
5.2004(c)(1)(G) and (2; are to provide the
Insured with a refund of the unearned
part of the stabilization reserve fund
charge if the policy of insurance Is
canceled within the 90th day of coverage
by the association.
The amendment to Section 5.2003(c)(2)
eliminates the provision that the policy-
holder's stabilization reserve fund charges
shall not be refundable if any portion of
the coverage premium is earned or the
association is exposed to any liability
under the policies that are the basis for
the charge and substitutes language
which provides that the policyholder's
stabilization reserve fund charges shall
not be refundable if the policy is can-
celed after the 90th day of the coverage
and that, if the policy is canceled within
the 90th day of coverage, the earned
charge will be based on the same earned
percentage charged for the insurance
premium.
The amendment to 5.2004(c)(1)(G) and (2)
sets out the manner in which the policy-
holder's stabilization reserve fund charges
will be refunded if the policy is canceled
within the 90th day of coverage either by
the association or by the insured.
These amendments to 5.2003(c)(2) and
5.2004(c)(1)(G) and (2) are necessary to
correct the inequity to medical providers
in the instance wien their policy of in-
surance is canceled in the first few
weeks of coverage and they do not re-
ceive a refund of the unearned stabiliza-
tion reserve fund charge which is based
on the annual premium for the policy. In
addition, these amendments are neces-
sary for the fair and efficient conduct of
the operations of the Joint UnderwritingAssociation. The association provides a
residual market for medical professional
liability insurance in this state, and the
insurance companies and policyholders
of the association as well as the general
public require a fiscally sound and well
administered association. The immediate
adoption of amendments to 5.2003(cX2)
and 5.2004(c)(1)(G) and (2) are required
to that end. The danger to the financial
resources of the policyholder partici-
pants in the association without the im-
mediate adoption of these amendments
creates an imminent peril to the public
welfare and requires that the sections be
adopted on an emergency basis.
The emergency amendment to 5.2004
(a)(4) is to increase the net retention at
risk limits of primary coverage; establish
new underwriting standards which cause
the excess policy to terminate in the
event the underlying primary policy of
medical liability insurance is not main-
tained for any reason, except exhaustion
by payment of loss or losses; provide
that policies of excess medical liability
insurance written by the association will
not be accepted for a hospital or other
institutional health care provider if the
applicant does not provide evidence that
all physicians, surgeons, podiatrists, den-
tists, pharmacists, or chiropractors with
staff privileges are insured for their indi-
vidual medical liability with limits of li-
ability of at least $100,000 per occurrence
and $300,000 aggregate per annum; pro-
vide that policies of excess medical li-
ability insurance written by the associa-
tion will not be accepted for physicians,
surgeons, podiatrists, dentists, pharma-
cists, or chiropractors who employ other
such health care providers if the appli-
cant does not provide evidence that all
employed physicians, surgeons, podia.
trists, dentists, pharmacists, or chiro-
practors who are eligible to obtain cover-
age from the association are insured for
their individual medical liability with
limits of liability of at least $100,000 per
occurrence and $300,000 aggregate per
annum; and make ineligible for coverage
in the Joint Underwriting Association any
hospitals or other institutional health
care providers or physicians, surgeons,
podiatrists, dentists, pharmacists, or
chiropractors who employ other such
health care providers without evidence
that all physicians, surgeons, podiatrists,
dentists, pharmacists, or chiropractors
with staff privileges or employed by theapplicant are insured for their individual
medical liability with limits of at least
$100,000 per occurrence and $300,000 ag-
gregate per annum.
The amendment to clause (iii) of 5.2004
(aX4C) raises the limits of primary cover-
age from $25,000 per occurrence and
$75,000 aggregate per annum to $100,000
per occurrence and $300,000 aggregate
per annum and will prevent abuses aris-
ing from the writing of excess policies
over limits lower than $100,000/$300,000.
Additionally, the State Board of Insur-
ance is of the opinion that most of the
excess policies issued by the associa-
tion are now in excess of policies with
underlying limits of at least $100,0001
$300,000 so the amendment will cause
the section to conform with current prac-
tice and market demands. The amend-
ment to clause (v) of 5.2004(a)(4)(C)
causes the excess policy to terminate ia
the event the underlying primary policy
of medical liability insurance is not main-
tained for any reason except exhaustion
by payment of a loss or losses. Previous-
ly, clause (v) provided that excess cover-
age would cease if the primary policy's
limits were exhausted. Under the amend-
ments, if the aggregate underlying pri-
mary medical liability insurance is ex-
hausted by payment of a loss or losses
occurring during the policy period, the in-
surance provided by the excess policy
shall continue to provide excess cover-
age in the some manner as if the underly-
ing primary insurance was in full force
and effect. The addition of clauses (vi)
and (vii) will avoid liability under a policy
of insurance issued to a hospital or phy-
sician's employer for acts of hospital
staff physicians, surgeons, podiatrists,
dentists, pharmacists, or chiropractors or
of physicians, surgeons, podiatrists, den-
tists, pharmacists, or chiropractors em-
ployed by the insured physician who do
not provide coverage for their own indi-
vidual liability. The addition of subpara-
graph (D) to paragraph (4) will avoid liabil-
ity under the hospital or institutional
health care provider's primary policy of
insurance or the employing physicians,
surgeons, podiatrists, dentists, pharma-
cists, or chiropractors' primary policy for
liability created by the individuals listed
above who have staff privileges in a hos-
pital or who are employed by an insured
physician and who are not financially
able to respond to claims due to their
own negligence.4 Emergeucy Rules January 7, 1986 11 TexReg 85
tP Emergency Rules
January 7, 1986 11 TexReg 85
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Texas. Secretary of State. Texas Register, Volume 11, Number 2, Pages 81-106, January 7, 1986, periodical, January 7, 1986; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth243750/m1/7/: accessed May 1, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.