STATUTORY AUTHORITY. The amendments and new sections are adopted pursuant to the Insurance Code §§541.401; 562.001; 562.004; 562.005; 562.051 - 562.052; 562.054; 562.101; 562.104(a) - (c); 562.106; 7002.001; and 36.001. Section 541.401(a) authorizes the Commissioner to adopt and enforce reasonable rules the Commissioner determines necessary to accomplish the purposes of Chapter 541. Section 562.001 provides that the purpose of the Insurance Code, Chapter 562 is to regulate trade practices in the business of discount health care programs by defining or providing for the determination of trade practices in the state that are unfair methods of competition or unfair or deceptive acts or practices in this state, and prohibiting those unfair or deceptive trade practices.

Section 562.004 provides that except as otherwise provided by Chapter 562, a program operator, including the operator of a free-standing discount health care program or a discount health care program marketed by an insurer or a health maintenance organization, shall comply with Chapter 562. Section 562.005 provides that Chapter 562 shall be liberally construed and applied to promote the underlying purposes as provided by the Insurance Code §562.001. Section 562.051 provides that it is an unfair method of competition or an unfair or deceptive act or practice in the business of discount health care programs to: (i) misrepresent the price range of discounts offered by the discount health care programs; (ii) misrepresent the size or location of the program's network of providers; (iii) misrepresent the participation of a provider in the program's network; (iv) suggest that a discount card offered through the program is a federally approved Medicare prescription discount card; (v) use the term "insurance," except as a disclaimer of any relationship between the discount health care program and insurance, or a description of an insurance product connected with a discount health care program; or (vi) use the term "health plan," "coverage," "copay," "copayments," "deductible," "preexisting conditions," "guaranteed issue," "premium," "PPO," or "preferred provider organization," or another similar term, in a manner that could reasonably mislead an individual into believing that the discount health care program is health insurance or provides coverage similar to health insurance. Section 562.052 provides that it is an unfair method of competition or an unfair or deceptive act or practice in the business of discount health care program to make, publish, disseminate, circulate, or place before the public or directly or indirectly cause to be made, published, disseminated, circulated, or placed before the public an advertisement, solicitation, or marketing material, containing an untrue, deceptive, or misleading assertion, representation, or statement regarding the discount health care program. Section 562.054 provides that it is an unfair method of competition or an unfair or deceptive act or practice in the business of discount health care programs to misrepresent a discount health care program by: (i) making an untrue statement of material fact; (ii) failing to state a material fact necessary to make other statements made not misleading, considering the circumstances under which the statements were made; (iii) making a statement in a manner that would mislead a reasonably prudent person to a false conclusion of a material fact; (iv) making a material misstatement of law; or (v) failing to disclose a matter required by law to be disclosed, including failing to make an applicable disclosure required by the Insurance Code.

Section 562.101 provides that a person may not engage in this state in a trade practice that is defined in Chapter 562 as or determined under Chapter 562 to be an unfair method of competition or an unfair or deceptive act or practice in the business of discount health care programs. Section 562.104(a) provides that a discount health care program operator may market directly or contract with marketers for the distribution of the program operator's discount health care program. Section 562.104(b) provides that a discount health care program operator is required to enter into a written contract with a marketer before the marketer begins marketing, promoting, selling, or distributing the program operator's discount health care program. The contract must prohibit the marketer from using an advertisement, solicitation, or other marketing material or a discount card that has not been approved in advance and in writing by the program operator. Section 562.104(c) provides that the discount health care program operator must approve in writing before their use all advertisements, solicitations, or other marketing materials and all discount cards used by marketers to market, promote, sell, or distribute the discount health care program. Section 562.106 provides that if the Commissioner reasonably believes that a program operator or a marketer may not be operating in compliance with this chapter, the Commissioner by order may require the program operator or the marketer to submit to the Commissioner any advertisement, solicitation, or marketing material, disclosure material, discount card, agreement, or other document requested by the Commissioner. Section 7002.001 provides that, for purposes of the Insurance Code Chapters 562 and 7001, "consideration" provided to a discount health care program or a discount health care program operator includes patient information or patient prescription drug history information provided by members, if the entity engages in the transfer or sale of such patient information, patient prescription drug history, or drug manufacture rebates. Section 36.001 provides that the Commissioner of Insurance may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state.