TITLE 28. INSURANCE

PART 1. TEXAS DEPARTMENT OF INSURANCE

CHAPTER 1. GENERAL ADMINISTRATION

SUBCHAPTER E. NOTICE OF TOLL-FREE TELEPHONE NUMBERS AND PROCEDURES FOR OBTAINING INFORMATION AND FILING COMPLAINTS

28 TAC §1.601, §1.602

The Commissioner of Insurance adopts amendments to 28 TAC §1.601 and §1.602, relating to notice of toll-free numbers, getting information, complaint procedures, and notice of a website. The amendments to §1.601 implement Insurance Code §§521.005(b), 521.056, and 521.103(b), concerning the appropriate wording and appearance of the notice. The amendments to §1.602 implement Insurance Code §32.104(b), concerning the form and content of the notice. The amendments are adopted with changes to the proposed text as published in the May 10, 2019, issue of the Texas Register (44 TexReg 2346).

The department adopts §1.601 and §1.602 with changes to the proposed text in response to public comments and other minor changes to add clarity and conform with the department's current style. These changes do not materially alter issues raised in the proposal, introduce new subject matter, or affect people other than those previously on notice.

The department revised §1.601(a)(1) to add section symbols before "521.005" and "521.056."

In response to a comment, the department revised Figure: 28 TAC §1.601(a)(2)(B), Figure: 28 TAC §1.601(a)(2)(C), §1.601(b)(2), and Figure: 28 TAC §1.602(b)(1)(C) to allow a company to include its URL address.

In response to a comment, the department revised §§1.601(e), 1.602(b)(1)(C), and 1.602(b)(2) to list May 1, 2020, as the date insurers must begin using the updated notices.

The department revised Figure: 28 TAC §1.601(a)(2)(B), Figure: 28 TAC §1.601(a)(2)(C), and Figure: 28 TAC §1.602(b)(1)(C) by adding "9091" to the ZIP code for consistency with the department's address to process consumer complaints.

The department also revised Figure: 28 TAC §1.601(a)(2)(B) to clarify that consumers may call the department with a question and file a complaint on the department's website.

The department revised Figure: 28 TAC §1.601(a)(2)(C) to change the National Council on Compensation Insurance (NCCI) email address to regulatoryoperations@ncci.com.

The department also made clarifying changes to Figure: 28 TAC §1.601(a)(2)(C). First, the department revised two headings to more clearly present information about when to contact NCCI or the department. The department also added a paragraph to clarify that an insured may call the department to file a complaint if the insured believes an insurance company has violated a law relating to a workers' compensation policy. Finally, the department revised the figure to list "Compliance and Investigations" as the specific area in the Division of Workers' Compensation (DWC) to contact about a problem with a claim.

REASONED JUSTIFICATION. The amendments to §1.601 and §1.602 improve the readability of the rules and make it easier for consumers to know where and how to get help with an insurance or health maintenance organization (HMO) question or complaint. The amendments will also provide better contact information for consumers with workers' compensation problems.

Insurance Code §521.005(a) requires each insurance policy delivered or issued for delivery in Texas to provide a brief written notice with the policy that includes:

1) a suggested procedure to be followed by a policyholder with a dispute concerning a claim or premium;

2) the department's name and address; and

3) the department's toll-free telephone number for information and complaints. Insurance Code §521.005(b) requires the Commissioner to adopt appropriate wording for these notices.

Insurance Code §521.056 requires each insurer that delivers, issues for delivery, or renews an insurance policy in this state to include an information bulletin with the policy that includes the department's toll-free telephone number and a description of the services available through the department's toll-free telephone number.

Under Insurance Code §521.103(a), each HMO or insurer that delivers, issues for delivery, or renews an evidence of coverage or insurance policy in Texas must print the HMO's or insurer's toll-free number on the evidence of coverage or policy. Insurance Code §521.103(b) provides that the Commissioner may adopt rules about how the toll-free telephone number appears on the evidence of coverage or insurance policy.

In addition, under Insurance Code §32.102(a), the department, with the Office of Public Insurance Counsel, must establish and maintain a website that provides information about the purchase of residential property insurance and personal automobile insurance so consumers can make informed decisions. Under Insurance Code §32.104(b), insurers must give notice of the website, and the Commissioner must determine the form and content of the notice.

Section §1.601(a). Amendments to §1.601(a)(2) remove references to "health care plans" and "subscriber contracts" because they are included in the meaning of "all policies." The amendments also delete text from §1.601(f) and add it to §1.601(a)(2). The text relates to the applicability of the section to insurers when they add a certificate holder, annuitant, or enrollee to a group policy or group plan; so §1.601(a)(2) is a more logical place for it.

Amendments to §1.601 add subsection (a)(2)(A) to clarify how prominent the notice form must be in a package of documents.

Amendments to §1.601 add subsection (a)(2)(B) to clarify that insurers and HMOs are not required to file the notice form with TDI. The amendments continue to specify that the notice form must follow the form and content requirements in the rule, now reflected in Figure: 28 TAC §1.601(a)(2)(B) and the amendments to §1.601(b).

Amendments to §1.601 remove the notice form under Figure: 28 TAC §1.601(a)(3) and replace it with an amended notice form under Figure: 28 TAC §1.601(a)(2)(B). The amended notice form more clearly describes where and how to get help with an insurance question or complaint. The form clarifies who a consumer should contact about a complaint on a claim or premium. Figure: 28 TAC §1.601(a)(2)(B) informs the consumer to also file a complaint through the insurer's or HMO's complaint or appeal process, even if the consumer files a complaint with TDI. This language is necessary so that consumers are aware that they should pursue appeal rights in a timely manner.

The amendments to §1.601 provide more accurate contact information to workers' compensation policyholders about where and how to get help with an insurance question or problem in proposed Figure: 28 TAC §1.601(a)(2)(C).

Section §1.601(b). Amendments to §1.601(b) change the content of the notice to make it easier for consumers to read and know who they should contact to file a complaint or request other assistance, and how to contact that person. The amendments to §1.601(b) require a title and telephone number for the insurer and HMO. The title and telephone number can still be the name and telephone number of an agent, third-party administrator, managing general agent, or employee benefits coordinator that provides policyholder services on behalf of the insurer or HMO.

Amendments to §1.601(b)(2) require the notice to include a mailing address and email address for the insurer or HMO. Amendments to §1.601(b)(2) also allow a company to include its URL address, giving consumers another way to contact the company for information or to make a complaint.

Amendments to §1.601(b)(3) clarify that the notice must appear in a font size no smaller than 10 point.

Amendments to §1.601(b) also delete §1.601(b)(3)(D), which provides an exception allowing an insurer or HMO to not provide a toll-free telephone number for group policies it does not administer and for group policies issued to employers and labor unions. The exception is deleted to conform the rule text to Insurance Code §521.102 and §521.103, which require insurers and HMOs to include those numbers on each evidence of coverage or policy issued. Insurance Code §521.101(b) does not provide an exception for those group policies.

Amendments to §1.601(b) also delete §1.601(b)(8), removing a requirement that the notice form must contain language about attaching the notice to the policy because §1.601(a)(2)(B) clarifies that insurers and HMOs are not required to file the notice form with the department.

Section §1.601(c). Amendments to §1.601(c) simplify the process for insurers or HMOs to claim an exception to the toll-free number requirement. Under Insurance Code §521.101(b)(1), insurers or HMOs with gross initial premium receipts collected in Texas of less than $2 million each year are not required to maintain a toll-free number for information and complaints.

The adopted amendments remove the requirement for an insurer or HMO to file a statement with the department providing the statutory basis for the exception. The adopted amendments also simplify the description of what information and documents the insurer or HMO must retain for the exception.

Section §1.601(d). Amendments to §1.601(d) clarify that insurers and HMOs will not need to refile previously approved policies, bonds, annuity contracts, certificates, or evidences of coverage, but they must provide the notice in the required manner. The adopted amendments delete language about providing the notice for renewed policies because the amendments to §1.601(a)(2) describe the way to provide notice for those renewals.

Section §1.601(e). Amendments to §1.601(e) state when insurers and HMOs must begin using the new notice form. The adopted amendments provide that insurers and HMOs may continue using the previous version of the notice form until May 1, 2020, to reduce disruption and facilitate the transition.

The amendments delete the provisions that do not require companies to refile certain policies, bonds, annuity contracts, and certificates. The substance of the deleted provisions is effectively transferred to §1.601(d).

Section §1.601(f). Amendments to §1.601 delete the text of subsection (f), which is about additions to a group policy or group plan. This provision is incorporated into §1.601(a)(2).

Section §1.602(a). Amendments to §1.602(a)(1) insert the heading for Insurance Code §32.104 where that section is cited in the text.

Section §1.602(b). Amendments to §1.602(b) will make the notice easier for consumers to read and know where they can compare prices and coverages on home and auto insurance policies. Amendments to the notice form in §1.602(b)(1) correspond with Figure: 28 TAC §1.601(a)(2)(B) and amendments to notice form requirements in §1.601(b). The amendments in §1.601(b) also reference the renumbered text under the amendments to §1.601(a)(2), providing formatting instructions on certain text in the notice, and making editorial changes to the language in the notice to make it easier for consumers to read.

The amendments add §1.602(b)(1)(C) to specify when insurers must begin using the new notice form. The amendments allow insurers to continue using the previous version of the notice form until May 1, 2020, to reduce disruption and facilitate the transition.

Amendments to §1.602 add Figure: 28 TAC §1.602(b)(1)(C) to replace the notice of internet website form under former Figure: 28 TAC §1.602(b)(1)(B). Amendments to the notice of internet website form will make it easier for consumers to read and know where they can compare prices and coverages on home and auto insurance policies.

Amendments to §1.602(b)(2) and Figure: 28 TAC §1.602(b)(2) will make the notice easier for consumers to read and know where they can compare prices and coverages on home and auto insurance policies. The amendments to §1.602(b)(2) also specify when insurers must begin using the new notice form. The amendments allow insurers to continue using the previous version of the notice form until May 1, 2020, to reduce disruption and facilitate the transition.

In addition, throughout the amendments, nonsubstantive editorial and formatting changes are made to conform to the department's current style, improve the rule's clarity, and re-letter and renumber rule text. The department also revised the notice forms in §1.601 and §1.602 to conform to the department's current style and to generally improve the forms' clarity.

SUMMARY OF COMMENTS AND AGENCY RESPONSE.

Commenters: The department received four written comments on the proposed amendments. Commenters in support of the proposal with changes, were: The American Council of Life Insurers, Croy-Hall Management, Superior Health Plan, and the Texas Association of Health Plans.

Comment on §1.601(a)(2) and (d).

A commenter states that life insurance policies, long-term care policies, and annuities do not "renew." Instead, at the time of the policy anniversary, the policies continue, and a new contract is not issued at the "time of renewal," so an insurer would not send a notice on renewal. The commenter asks the department to clarify its intent on the application of the revised notice requirements for policies that do not renew. The commenter asks if the department intends for an insurer to provide a new notice to all existing policyholders and contract owners. The commenter asks if it would be acceptable to instead provide the updated notice with policies issued following the effective date of the new notice requirements.

Agency Response to Comment on §1.601(a)(2) and (d).

If a policy or contract renews, the rule requires companies to provide the new version of the notice at renewal. The rule does not require companies to provide the new version of the notice for existing policies or contracts that continue without renewal.

Comment on Figure: 28 TAC §1.601(a)(2)(B).

A commenter asks if the department is intending to change the post office box and ZIP code to which consumers can file their complaints. The commenter points out that the mailing address for the department on the proposed notice form is P.O. Box 149091 with just a five-digit ZIP code of 78714. The commenter states that for the past several years, the department has directed written complaints to P.O. Box 149104 using ZIP code 787104-9104.

Agency Response to Comment on Figure: 28 TAC §1.601(a)(2)(B).

The department's address on the form in Figure: 28 TAC §1.601(a)(2)(B) is different from the previous form. The department currently uses P.O. Box 149091 and ZIP code 78714-9091 for mailed complaints. The department has revised the ZIP code in the notice form to include "-9091" for consistency with the current address used to process consumer complaints.

Comment on Figure: 28 TAC §1.601(a)(2)(B).

A commenter asks if the department is intending to discontinue the availability of fax-transmitted complaints. The commenter points out that the proposed notice does not list a fax number, nor does it require insurers and HMOs to list a fax number for complaints. The commenter says that for the past several years, the department has listed a fax number for complaints and required companies to list a fax number.

Agency Response to Comment on Figure: 28 TAC §1.601(a)(2)(B).

The department stopped accepting complaints by fax in January 2019 to expedite and streamline the complaint handling process. Consumers may file complaints by using the complaints portal on the department's website or by mail. The website informs consumers of the process to file a complaint. The transition has been successful with no significant impact on consumers.

The department declines to add a requirement for companies to list a fax number. A company fax number has not been required under §1.601 or §1.602.

Comment on §1.601(b)(2).

A commenter recommends that the department allow HMOs to provide a URL in place of an email address on the notice form. The commenter explains that having a fillable form on a website allows the HMO to use mandatory fields to obtain all the information needed to identify a member and timely respond to complaints.

Agency Response to Comment on §1.601(b)(2).

The department agrees to revise §1.601(b)(2) and Figure: 28 TAC §1.601(a)(2)(B) to allow the optional inclusion of a company's URL address, which would give consumers another way to contact the company for information or to make a complaint. The department does not agree to remove the requirement to include a company's email address. Email is a very common method of electronic communication that should remain available for consumers to contact a company.

Comment on §§1.601(e), 1.602(b)(1)(C), and 1.602(b)(2).

A commenter appreciates and supports that the proposal allows insurers and HMOs to continue using the previous version of the notice form for up to six months after the effective date of the rule. Because the proposal does not specify an effective date, the commenter asks the department to ensure that the updated notice not be required before January 1, 2020, so that insurers and HMOs may continue to use their current policy and notice forms for the remainder of the year.

Agency Response to Comment on §1.602(b)(2).

The department appreciates the support. Six months after the anticipated effective date of the rule will not be before January 1, 2020. To provide more clarity, the department has revised §§1.601(e), 1.602(b)(1)(C), and 1.602(b)(2) to list May 1, 2020, as the specific date by which insurers and HMOs must start using the new notice forms. They may continue using their current notice forms until that date.

STATUTORY AUTHORITY. The Commissioner adopts the amendments to 28 TAC §1.601 and §1.602 under Insurance Code §§32.104(b), 521.005(b), 521.103(b), and 36.001.

Insurance Code §32.104(b) provides that the Commissioner determine the form and content of the notice of the internet website required by Insurance Code Chapter 32, Subchapter C.

Insurance Code §521.005(b) provides that the Commissioner adopt appropriate wording for the notice required by the section.

Insurance Code §521.103(b) provides that the Commissioner may adopt rules governing the way an insurer or health maintenance organization's toll-free telephone number appears on an evidence of coverage or insurance policy.

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

§1.601.Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures.

(a) Purpose and applicability.

(1) The purpose of this section is to provide the means for insurers and health maintenance organizations (HMOs) to comply with the notice requirements of Insurance Code §521.103, concerning Information Included in Evidence of Coverage or Policy; §521.005, concerning Notice to Accompany Policy; and §521.056, concerning Information Bulletin to Accompany Policy. Compliance with this section is deemed compliance with these notice requirements.

(2) The notice must be provided at the time of delivery with all policies, bonds, annuity contracts, certificates, or evidences of coverage that are delivered, issued for delivery, or renewed in Texas by insurers or HMOs. When insurers add a certificate holder, annuitant, or enrollee to a group policy or group plan, insurers must also provide the notice when the certificate, annuity contract, or evidence of coverage is delivered.

(A) The notice must appear on a full, separate page with no text other than that provided in this section. The notice must be prominently placed in any package of documents it is delivered with, and it must be the first, second, or third page of the set of documents.

(B) The form of the notice must be consistent with Figure: 28 TAC §1.601(a)(2)(B) and the requirements of subsection (b) of this section. The form of notice is not required to be filed with the department.

Figure: 28 TAC §1.601(a)(2)(B) (.pdf)

(C) The form of the notice for workers' compensation must be consistent with Figure: 28 TAC §1.601(a)(2)(C) and the requirements of subsection (b) of this section. The form of notice is not required to be filed with the department.

Figure: 28 TAC §1.601(a)(2)(C) (.pdf)

(b) Notice requirements. The text may be single spaced, but it must include at least one blank line between each paragraph. The Spanish portion of the notice is required for personal automobile, homeowners, life, accident, and health policies, certificates, and evidences of coverage. The notice may include the letterhead of the insurer or HMO and any automated form identification numbers.

(1) The notice must include a title and telephone number for the insurer or HMO. At its option, the insurer or HMO may provide the name and telephone number of an agent, third-party administrator, managing general agent, or employee benefits coordinator. The telephone number must be in bold type and be preceded and followed by one blank line. The insurer or HMO must provide a toll-free telephone number unless one of the exemptions in subparagraphs (A) - (C) of this paragraph applies. For purposes of this section, a toll-free telephone number is one that any covered person can use to get information or make a complaint without incurring long-distance calling expenses. An insurer or HMO is exempt from providing a toll-free number:

(A) when the insurer's or HMO's gross initial premium receipts collected in Texas are less than $2 million a year;

(B) with respect to fidelity, surety, or guaranty bonds; or

(C) if it is a surplus lines insurer.

(2) The notice must include a mailing address and email address for the insurer or HMO. The notice may include a company's URL address.

(3) The notice must be in a font size no smaller than 10 point.

(c) Exceptions to maintenance of toll-free number. Any exception claimed under subsection (b)(1)(A) of this section must be based on gross initial premium receipts collected in Texas during the previous calendar year. This information and any other data that the company relied on to determine if it was entitled to an exception is subject to examination by the department. Failure by any insurer or HMO to maintain the information required in this paragraph, or failure to provide information to the department on request, constitutes grounds for enforcement action that may result in the cancellation, revocation, or suspension of the insurer's or HMO's certificate of authority. Any insurer or HMO claiming an exception must retain and provide to the department on request the following information:

(1) the statutory basis for the exception; and

(2) the amount of gross initial premium receipts collected in Texas for the calendar year immediately preceding the year for which an exception is claimed. The gross initial premium receipts collected may be documented either by:

(A) the annual statement submitted by the insurer or HMO; or

(B) records maintained for each new policy written during a calendar year that include the policy number, the effective date of the policy, and the amount of initial premium received, including any membership fees, assessments, dues, and any other considerations for that insurance.

(d) Providing notice. Insurers and HMOs will not need to refile previously approved policies, bonds, annuity contracts, certificates, or evidences of coverage, but they must provide the notice in the manner required by this section.

(e) Implementation date. Insurers and HMOs must begin using the notice form described in subsection (a)(2) of this section no later than May 1, 2020. Insurers and HMOs may continue using the previous notice form until that time.

§1.602.Notice of Internet Website.

(a) Purpose and applicability.

(1) The purpose of this section is to establish the form and content of the notice required under Insurance Code §32.104(b), concerning Duties of Insurer.

(2) This section applies to insurers who comprise the top 25 insurance groups in the national market and who issue residential property insurance or personal automobile insurance policies in this state, including a Lloyd's plan, a reciprocal or interinsurance exchange, a county mutual insurance company, a farm mutual insurance company, the Texas Windstorm Insurance Association, the FAIR Plan Association, and the Texas Automobile Insurance Plan Association.

(3) This section applies to all residential property insurance and personal automobile insurance policies that are delivered, issued for delivery, or renewed in this state on or after January 1, 2008.

(b) Notice requirements. Insurers must comply with either subsection (b)(1) or (b)(2) of this section, or may opt to comply with both:

(1) Notwithstanding the requirements in §1.601(a)(2) of this title (relating to Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures), the insurer must include the following text in the notice required under §1.601(a)(2) of this title with each policy specified. The text must be in a font size no smaller than 10 point. The heading "To compare policies and prices" must be in bold type. The website address "Helpinsure.com" must be in bold type and must be preceded by one blank line.

(A) "To compare policies and prices: Visit HelpInsure.com to compare prices and coverages on home and auto insurance policies. The website is a service of the Texas Department of Insurance and the Office of Public Insurance Counsel" in the English portion; and

(B) "Para comparar pólizas y precios: Visite HelpInsure.com para comparar precios y coberturas en pólizas de seguro para el hogar y automóvil. El sitio web es un servicio del Departamento de Seguros de Texas y de la Oficina del Asesor Público de Seguros (Office of Public Insurance Counsel, por su nombre en inglés)" in the Spanish portion.

(C) Insurers must begin using the notice form described in paragraph (b) of this section no later than May 1, 2020. Insurers may continue using the previous notice form until that time.

Figure: 28 TAC §1.602(b)(1)(C) (.pdf)

(2) The insurer must provide the following notice in a conspicuous manner with each policy. The notice must be printed in font size that is at least as large as the font used for the main body of the policy, and it must be preceded and followed by at least one blank line. "Insurance Website Notice" and "Aviso del Sitio Web de Seguros" must be in all capital letters and bold type and "Helpinsure.com" must be in bold type. Insurers must begin using the notice no later than May 1, 2020. Insurers may continue using the previous notice until that time.

Figure: 28 TAC §1.602(b)(2) (.pdf)

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on October 15, 2019.

TRD-201903753

James Person

General Counsel

Texas Department of Insurance

Effective date: November 4, 2019

Proposal publication date: May 10, 2019

For further information, please call: (512) 676-6584