The Texas Department of Insurance (TDI) proposes to amend 28 TAC §3.3307, concerning loss ratio standards and refund or credit of premiums.

EXPLANATION. The current Medicare Supplement Data Call rule in 28 TAC §3.3307(f) requires Medicare supplement individual or group policy issuers to annually submit to TDI their refund or credit calculations on Medicare supplement insurance policies, to document the calculations they must make each year in determining any need to refund premiums to policyholders. TDI's Actuarial Data Team currently collects this calculation data; however, there is no further requirement on the team to subsequently use it. This results in a depletion of TDI manpower and resources to create a large repository of frequently unused data.

Amendments to §3.3307 would change the requirement to provide the data to TDI, to simply provide that issuers keep the data and make it available to TDI upon request. This change will ease this potentially costly burden on issuers, as they would no longer be required to annually file their calculations with TDI, while maintaining TDI's access to that data when needed. Insurers would keep the calculations on file and make them available should the Commissioner need that information to review trends in loss ratio standards and refund or credit of premiums in the interest of consumer protection and market fairness.

The amendments to §3.3307(f) remove the reporting requirement to submit an issuer's refund or credit calculation to TDI by May 31 each year. The amendments replace this with a requirement that issuers retain documentation supporting their refund or credit calculations for five years and that they provide the information to TDI upon request and in the manner prescribed by the Commissioner. An amendment is also proposed for Figure: 28 TAC §3.3307(f), to remove the final page of the Medicare Supplement Refund Calculation Form. This page is used only for reporting data under the section, and it is no longer necessary because issuers will no longer be required to report that data to TDI.

In addition to the previously described amendments, for consistency with current agency style, TDI proposes to change the word "percent" to the percent symbol in §3.3307(a)(1) and (2); (c)(1) and (2); and (d)(1)(F), (3), and (4)(B) and (C).

FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATEMENT. Barbara Snyder, chief actuary of the Life and Health Division, has determined that during each year of the first five years the proposed amendments are in effect, there will be no measurable fiscal impact on state and local governments as a result of enforcing or administering the sections, other than that imposed by the statute. Ms. Snyder made this determination because the proposed amendments do not add to or decrease state revenues or expenditures, and because local governments are not involved in enforcing or complying with the proposed amendments.

Ms. Snyder does not anticipate any measurable effect on local employment or the local economy as a result of this proposal.

PUBLIC BENEFIT AND COST NOTE. For each year of the first five years the proposed amendments are in effect, Ms. Snyder expects that administering the proposed amendments will have the public benefit of conserving agency resources and alleviating the regulatory burden on companies of aggregating and submitting data to TDI.

Ms. Snyder expects that the proposed amendments will impose a cost on stakeholders to implement the retention responsibility for this data. The cost could involve some small data storage expenses associated with the proposed record retention requirement. However, those costs are expected to be minimal and, overall, they will be offset by companies' savings from no longer being required to annually aggregate and send TDI data.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS. TDI has determined that the proposed amendments will not have an adverse economic effect on small or micro businesses, or on rural communities, because the amendments result in a net savings for stakeholders. As a result, and in accordance with Government Code §2006.002(c), TDI is not required to prepare a regulatory flexibility analysis.

EXAMINATION OF COSTS UNDER GOVERNMENT CODE §2001.0045. TDI has determined that this proposal results in a net savings for regulated persons. No additional rule amendments are required under Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT. TDI has determined that for each year of the first five years that the proposed amendments are in effect, the proposed rule:

- will not create or eliminate a government program;

- will not require the creation of new employee positions or the elimination of existing employee positions;

- will not require an increase or decrease in future legislative appropriations to the agency;

- will not require an increase or decrease in fees paid to the agency;

- will not create a new regulation;

- will expand, limit, or repeal an existing regulation;

- will not increase or decrease the number of individuals subject to the rule's applicability; and

- will not positively or adversely affect the Texas economy.

TAKINGS IMPACT ASSESSMENT. TDI has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action. As a result, this proposal does not constitute a taking or require a takings impact assessment under Government Code §2007.043.

REQUEST FOR PUBLIC COMMENT. TDI will consider any written comments on the proposal that are received by TDI no later than 5:00 p.m., central time, on May 24, 2021. Send your comments to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030.

To request a public hearing on the proposal, submit a request before the end of the comment period to ChiefClerk@tdi.texas.gov or to the Office of the Chief Clerk, MC GC-CCO, Texas Department of Insurance, P.O. Box 12030, Austin, Texas 78711-2030. The request for public hearing must be separate from any comments and received by TDI no later than 5:00 p.m., central time, on May 24, 2021. If TDI holds a public hearing, TDI will consider comments presented at the hearing.

STATUTORY AUTHORITY. TDI proposes §3.3307 under Insurance Code §1652.103 and §36.001.

Insurance Code §1652.103 provides that the Commissioner may adopt rules that provide for a process for reviewing and approving or disapproving a proposed premium increase relating to a Medicaid Supplement Benefit Plan.

Insurance Code §36.001 provides that the Commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.

CROSS-REFERENCE TO STATUTE. Section 3.3307 implements Insurance Code Chapter 1652, which requires the Commissioner to establish minimum loss ratio standards for Medicare supplement benefit plans.