Part 1.
TEXAS DEPARTMENT OF INSURANCE
Chapter 9.
TITLE INSURANCE
Subchapter A. BASIC MANUAL OF RULES, RATES AND FORMS FOR THE WRITING OF TITLE INSURANCE IN THE STATE OF TEXAS
28 TAC §9.30
The Texas Department of Insurance has received a petition
proposing the adoption by reference of amendments to endorsements and procedural
rules in the Basic Manual of Rules, Rates and Forms for the Writing of Title
Insurance in the State of Texas (Basic Manual) relating to home equity. The
amendments to §9.30 are proposed to adopt by reference the amended endorsements,
Forms T-42, T-42.1, T-44, T-45, and T-46 and the amended procedural rules,
P-46 and P-47 to the Basic Manual. The 78th Legislature, Regular Session,
adopted Senate Joint Resolution 42 proposing a constitutional amendment authorizing
home equity lines of credit, adding requirements for one day advance disclosure
of all fees, and revising technical procedures regarding home equity loans
on Texas homestead property. By voter approval on September 13, 2003, Section
50, Article XVI of the Texas Constitution was amended to provide for home
equity lines of credit, to require an additional notice to borrowers prior
to the origination of such mortgages, and to permit lenders to take certain
actions to cure origination defects with such mortgages, including offering
borrowers the opportunity to refinance such mortgages under certain circumstances.
Stewart Title Guaranty Company (Stewart) has proposed amendments to the applicable
procedural rules and endorsements in the Basic Manual to facilitate the issuing
of mortgagee title policies insuring home equity liens on homestead property.
The proposed modifications to the existing title insurance forms relating
to home equity refer to the correct and applicable law, provide insurance
for future advances under home equity lines of credit, and insure disclosure
of fees by title insurance companies or title insurance agents who close home
equity loans. The proposed amended endorsements and procedural rules will
enable title insurance companies to write additional title insurance coverages
regarding home equity lending in Texas. The proposed amendments will also
provide both lenders and borrowers more certainty regarding the meaning of
the law and a clear means of resolving origination problems.
The proposed amended endorsement forms are as follows: Proposed amendment
to the Equity Loan Mortgage Endorsement (T-42) conforms this endorsement to
the new amendments to constitutional provisions for home equity loans, including
new provisions for home equity lines of credit. Proposed amendment to the
Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) provides insurance
of advance disclosure of fees as required by the new amendments to constitutional
provisions for home equity loans and also incorporates a definition of business
day for purposes of the endorsement. Proposed amendments to the Texas Residential
Limited Coverage Junior Mortgagee Policy (T-44) and the Texas Residential
Limited Coverage Junior Mortgagee Policy Down Date Endorsement (T-45) conform
these endorsements to the new amendments to constitutional provisions for
home equity loans. Proposed amendment to the Texas Residential Limited Coverage
Junior Mortgagee Policy Variable Rate Endorsement (T-46) conforms this endorsement
to the new amendments to constitutional provisions for home equity loans,
including new provisions for home equity lines of credit and adds to the name
of the endorsement a reference to home equity line of credit.
The proposed amended procedural rules are Procedural Rule P-46, which incorporates
references to applicable constitutional provisions for home equity lines of
credit and to the modified Texas Residential Limited Coverage Junior Mortgagee
Policy Home Equity Line of Credit/Variable Rate Endorsement (T-46), and Procedural
Rule P-47, which establishes requirements for issuance of the proposed additional
coverages to the Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1).
The department has filed a copy of each of the proposed amended forms and
procedural rules with the Secretary of State's Texas Register section. Persons
desiring copies of the proposed items can obtain them from the Office of the
Chief Clerk, Texas Department of Insurance, 333 Guadalupe Street, Austin,
Texas, 78714-9104. To request copies, please contact Sylvia Gutierrez at (512)
463-6327.
Robert R. Carter, Jr., Deputy Commissioner for the Title Division, has
determined that, for each year of the first five years the amendments are
in effect, there will be no fiscal impact on state or local government as
a result of enforcing or administering the amendments. Mr. Carter has also
determined that there will be no effect on local employment or the local economy.
Mr. Carter has also determined that for each year of the first five years
the proposed amendments are in effect, the public benefit anticipated as a
result of administering and enforcing the amendments will be to ensure the
appropriate policy and endorsement language on title insurance policies covering
home equity loans. The department expects the public to benefit from the introduction
of the expanded coverage offered by the proposed amendments, which is likely
to facilitate the continued availability of mortgage loan funds in the State
of Texas. Both Texas homeowners and lenders will benefit from a strong secondary
market for Texas home equity loans. The department expects the current premium
rates for these existing endorsements to fully cover the costs of producing
the amended endorsements. The sale of such endorsements is voluntary and imposes
no additional regulatory costs on companies that decide to participate in
the market. Additionally, the department anticipates that the premium schedules
will fully compensate small, large, and micro-businesses, and therefore, expects
no differential impact between small, large, and micro-businesses that decide
to participate in such sales. The cost per hour of labor should not vary between
small, large, and micro-businesses. Further, it is neither legal nor feasible
to exempt small or micro-businesses or to waive compliance considering the
purpose of the efficient regulation of title insurance for which the amendments
are to be adopted.
To be considered, written comments on the proposal must be submitted no
later than 5:00 p.m. on February 16, 2004, to Gene C. Jarmon, General Counsel
and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box
149104, Austin, Texas 78714-9104. An additional copy of the comments must
be submitted simultaneously to Robert R. Carter, Jr., Deputy Commissioner,
Title Division, Mail Code 106-2T, Texas Department of Insurance, P.O. Box
149104, Austin, Texas 78714-9104. Request for a public hearing should be submitted
separately to the Chief Clerk's office.
The amended section is proposed pursuant to the Insurance Code,
Articles 9.07, 9.21, and §36.001, and Section 50, Article XVI of the
Texas Constitution. Article 9.07 authorizes and requires the commissioner
to promulgate or approve rules and policy forms of title insurance and otherwise
to provide for the regulation of the business of title insurance. Article
9.21 authorizes the commissioner to promulgate and enforce rules prescribing
underwriting standards and practices, and to promulgate and enforce all other
rules necessary to accomplish the purposes of Chapter 9, concerning regulation
of title insurance. Section 36.001 of the Insurance Code 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. By voter approval on September
13, 2003, Section 50, Article XVI of the Texas Constitution was amended to
provide for home equity lines of credit, to require an additional notice to
borrowers prior to the origination of such mortgages, and to permit lenders
to take certain actions to cure origination defects with such mortgages, including
offering borrowers the opportunity to refinance such mortgages under certain
circumstances.
The following statutes are affected by this proposal: Insurance Code, Articles
9.07 and 9.21.
§9.30.Procedural Rules, Rates, and Forms Relating to Home Equity [
In addition to material adopted by reference under §9.1 of this
title (relating to Basic Manual of Rules, Rates and Forms for the Writing
of Title Insurance in the State of Texas (the manual)), the Texas Department
of Insurance adopts by reference, as part of the manual,
amendments to
Procedural Rule P-46 and
Procedural Rule P-47 and endorsement
forms, Equity Loan Mortgage Endorsement (T-42),
[
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on January 2, 2004.
TRD-200400002
Gene C. Jarmon
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 15, 2004
For further information, please call: (512) 463-6327
Chapter 42.
MEDICAL BENEFITS
Subchapter B. MEDICAL COST EVALUATION
The Texas Workers' Compensation Commission (the commission) proposes
amendments to §42.105 (Medical Fee Guideline), and the repeal of §42.115
(Pharmaceutical Fee Guideline).
The amendments to §42.105 are proposed to make all fee guidelines
and pharmaceutical benefit provisions under Chapter 134 of the commission's
rules applicable to the reimbursement of medical treatments and services provided
to employees who sustained compensable injuries before January 1, 1991 ("old
law" claims).
Currently, only §134.201 of that chapter provides for the reimbursement
of professional medical treatments and services that relate to "old law" claims.
In addition, there is currently no facility fee guideline applicable to the
reimbursement of facility services that relate to "old law" claims. The proposed
amendments to §42.105 provide that §134.201 will continue to apply
to "old law" claim for professional medical treatments and services rendered
before May 1, 2004; and that all the fee guidelines and pharmaceutical benefit
provisions within Chapter 134 will apply to "old law" claims for professional
medical treatments and services rendered on or after May 1, 2004. The proposed
amendments to §42.105 will also make any facility fee guidelines currently
in effect, and any facility or other health care fee guidelines adopted by
the commission in the future, applicable to "old law" claims.
The proposed amendments to §42.105 do not make all of Chapter 134
applicable to "old law" claims. Only the fee guideline provisions currently
found in Subchapters C and D, and the pharmaceutical benefit provisions currently
found in Subchapter F, and any fee guideline provisions or pharmaceutical
benefit provisions adopted by the commission under Chapter 134 in the future,
would apply. The only exception would be §134.501, relating to Initial
Pharmaceutical Coverage. Section 134.501, which addresses the reimbursement
of pharmaceutical services provided within the first seven days following
the date of injury for new law cases.
The applicable sections of Chapter 134 currently in effect would be as
follows:
134.201 Medical Fee Guideline for Medical Treatments and Services Provided
under the Texas Workers' Compensation Act
134.202 Medical Fee Guideline
134.203 Dental Fee Guideline
134.401 Acute Care Inpatient Hospital Fee Guideline
134.500 Definitions
134.502 Pharmaceutical Services
134.503 Reimbursement Methodology
134.504 Pharmaceutical Expenses Incurred by the Injured Employee
134.506 Outpatient Drug Formulary
The commission proposes to amend §42.105 as follows:
Amend the title to read, "Medical Fee Guidelines and Pharmaceutical Benefits."
Add a new subsection (a), which provides that the fee guidelines and pharmaceutical
benefit provisions under Chapter 134 of this title (regarding Benefits - Guidelines
for Medical Services, Charges, and Payments) are applicable to medical treatments
and services provided on or after May 1, 2004.
Amend subsection (b) to state that, for medical treatments and services
provided before May 1, 2004, the maximum allowable reimbursement is the lesser
of the provider's usual fees and charges or the reimbursement established
by the applicable Medical Fee Guideline adopted by the commission in §134.201.
Delete subsections (c) and (d) because reimbursement of the purchase or
rental of durable medical equipment is addressed in the established guidelines,
and to eliminate unnecessary excess verbiage.
A full explanation of the methodology used in developing the
Texas Workers' Compensation Commission Medical Fee Guideline 1996
,
can be found in the preamble to the adoption 28 TAC §134.201, published
in the March 12, 1996,
Texas Register
(21
TexReg 2361).
A full explanation of the methodology used in developing the
Acute Care Inpatient Hospital Fee Guideline, 1997
can be found in the
preamble to the adoption of 28 TAC §134.401, published in the July 4,
1997,
Texas Register
(22 TexReg 6305).
A full explanation of the methodology used in developing the
Reimbursement Methodology
under Subchapter F, Pharmaceutical Benefits,
of Chapter 134 can be found in the preamble to the adoption of 28 TAC §134.503,
published in August 31, 2001,
Texas Register
(26
TexReg 6584).
A full explanation of the methodology used in developing the
2002 Medical Fee Guideline
, can be found in the preamble to the adoption
of 28 TAC §134.202, published in May 10, 2002,
Texas Register
(28 TexReg 4048). Additionally, a supplemental preamble
further explaining the development of the
2002 Medical
Fee Guideline
, §134.202, can be found in the December 27, 2002,
publication of the
Texas Register
(27 TexReg
12304).
An explanation of the development of proposed §134.402,
Ambulatory Surgical Center Fee Guideline,
to be considered as one of
several rules that will comprise Subchapter E, regarding Health Facility Fees,
under Chapter 134, can be found in the proposal preamble of the October 31,
2003, publication of the
Texas Register
(28
TexReg 9405).
The repeal of §42.115, the Pharmaceutical Fee Guideline, is proposed
because provisions regarding reimbursement for pharmaceutical benefits were
incorporated into §134.201,
The Texas Workers'
Compensation Medical Fee Guideline, 1996
(1996 MFG), which is applicable
for dates of service before May 1, 2004. For dates of services on or after
May 1, 2004, pharmaceutical benefits related to "old law" claims are to be
reimbursed under Chapter 134, Subchapter F, Pharmaceutical Benefits.
A full explanation of the methodology used in developing the
Texas Workers' Compensation Commission Medical Fee Guideline 1996
,
can be found in the preamble to the adoption 28 TAC §134.201, published
in the March 12, 1996,
Texas Register
(21
TexReg 2361).
Judy Bruce, Director of the commission's Medical Review Division, has determined
that for the first five-year period the proposed rules are in effect there
will be no increased costs to state and local governments as a result of enforcing
or administering the rules. State and local governments as regulated entities
may realize a slight savings in costs or resources because administering one
reimbursement system on or after May 1, 2004, may reduce potential confusion
associated with the administration of two separate reimbursement systems for
"old law" and "new law" claims, which may, in turn, reduce the number of disputes
regarding payments for medical treatments and services. For the same reasons,
the Medical Review Division should resolve reimbursement disputes more quickly,
resulting in additional savings in costs to state and local governments as
a result of enforcing or administering the rules.
The State Office of Risk Management and other self-insured governmental
entities should experience a reduction in the payment rates for medical benefits
as a result of the proposed amendments and repeal. The impact of those reductions
will be dependent on the number of "old law" claims that remain active and
the quantity of services provided. Since there is an overall reduction in
reimbursement amounts under Chapter 134, that overall reduction will likely
extend to "old law" claims. This same logic should apply to any other state
or local government "old law" claims.
No impact to revenues of state or local governments is anticipated as a
result of enforcing or administering the proposed rules.
Ms. Bruce has also determined that for each year of the first five years
the proposed amendments and repeal are in effect the public benefit anticipated
as a result of enforcing the rules will be greater efficiency in administering
one reimbursement system for both "old law" and "new law" claims. The public
will also benefit from the additional medical cost containment measures designed
to assure continued quality of medical care, which are included in the more
recently adopted provisions of Chapter 134. Additionally, the public will
benefit from any future revisions or guidelines within Chapter 134, which
will include these same features.
Based on current patterns of utilization, insurance carriers should experience
a decrease in total medical service payments because of the overall reduction
in reimbursement amounts under Chapter 134. It is also anticipated that insurance
carriers will realize a slight savings in costs or resources as the number
of disputes regarding payments for medical treatments and services may be
reduced because administering one reimbursement system on or after May 1,
2004, will result in administrative efficiencies. These savings should favorably
impact premiums thus benefiting employers and benefiting employees because
appropriate cost containment favors workers' compensation coverage for employees.
Injured employees will benefit from these amended rules because the rules
will assure reimbursement equity between services provided to employees who
were injured prior to January 1, 1991, and services provided to employees
injured after that date. There will be no fiscal impact on injured employees
as a result of enforcing these rules.
For health care providers, the benefits of the proposed rule amendments
are anticipated to minimize disputes and encourage prompt payments to health
care providers. Because of some redistribution of total reimbursements, fiscal
impact of revisions to the fee guidelines and pharmaceutical benefits on health
care providers will depend on their area of practice. Some health care providers
will experience an increase in fees for services, while others will experience
a decrease in fees and still others will experience no fiscal impact as a
result of the reimbursement system. Overall, there is expected to be a decrease
in payments to health care providers.
There will be no adverse effect on small or micro businesses. There will
be no difference in the costs of compliance for small or micro businesses
as compared to large businesses.
Comments on the proposed rule or requests for a public hearing must be
received by 5:00 p.m., February 16, 2004. You may comment via the Internet
by accessing the commission's website at
www.twcc.state.tx.us,
clicking on "Laws, Rules and Forms," and then on "Proposed Rules."
This medium for commenting will help you organize your comments. You may also
comment by emailing your comments to
RuleComments@twcc.state.tx.us
or by mailing or delivering your comments to Linda Velasquez, Legal
Services , Mailstop #4-D, Texas Workers' Compensation Commission, 7551 Metro
Center Drive, Suite #100, Austin, Texas 78744-1609.
Commenters are requested to clearly identify by number the specific rule
and paragraph (e.g., 42.105(a), 42.105(b)(1)(A), 42.115, etc.) commented upon.
The commission may not be able to respond to comments that cannot be linked
to a particular proposed rule. Along with your comment, it is suggested that
you include the reasoning for the comment in order for commission staff to
fully evaluate your recommendations.
Based upon various considerations, including comments received and the
Executive Director and staff's review, the rules as adopted may be revised
from the rules as proposed in whole or in part.
Persons in support or opposition of the rule as proposed, in whole or in
part, are encouraged to comment to that effect. The failure to comment accordingly
is not indicative of support or opposition.
The proposed amendments and repeal affect the following statutes: Texas
Revised Civil Statutes, Article 8306, §7(b) (Vernon 1990), which required
the Industrial Accident Board (board) to adopt rules that establish guidelines
for the charges and utilization of medical services and that implement medical
cost containment measures; Texas Revised Civil Statutes, Article 8307, §4(a)
(1990), which authorized the board to make rules to carry out and enforce
the law in effect at that time; Texas Revised Civil Statutes, Article 8308-17.12(b),
which authorizes the commission to delegate appropriate powers and duties
to the Executive Director to administer the workers' compensation law in effect
prior to the effective date of the new Texas Workers' Compensation Act (which
delegation was made by the Commission on April 1, 1990; and Texas Revised
Civil Statutes, Article 8308-17.18(d), which states that the commission shall
process claims for injuries occurring prior to January 1, 1991, in accordance
with the law in effect on the date of injury, and the former law is continued
in effect for that purpose.
Rule, Rate, and Form for Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1) and Rate for Equity Loan Mortgage Endorsement (T-42) ].
form T-42.1 for
] Supplemental Coverage Equity Loan Mortgage Endorsement (T-42.1)
, Texas Residential Limited Coverage Junior Mortgagee Policy (T-44), Texas
Residential Limited Coverage Junior Mortgagee Policy Down Date Endorsement
(T-45), and Texas Residential Limited Coverage Junior Mortgagee Policy Home
Equity Line of Credit/Variable Rate Endorsement (T-46), as amended effective
March 15, 2004
[
and Rate Rule 28 Premium for Equity Loan Mortgage
Endorsement (T-42) and Supplemental Coverage Equity Loan Mortgage Endorsement
(T-42.1)
]. This document is available from and on file at the Texas
Department of Insurance, Title Division, Mail Code 106-2T, William P. Hobby
State Office Building, 333 Guadalupe Street, P.O. Box 149104, Austin, Texas
78714-9104.
Part 2.
TEXAS WORKERS' COMPENSATION COMMISSION