1. (a) In this section, "general expenses" means expenses incurred by a group hospital service corporation in the operation of its business other than:

   1. (1) a tax;
   2. (2) a license fee;
   3. (3) a commission; or

   4. (4) an expense incurred in the performance of a contract:

      1. (A) made directly or indirectly with this state or the United States; and
      2. (B) under which the corporation does not assume an insurance risk.
2. (b) Subject to Subsection (c), a group hospital service corporation may not incur during a calendar year general expenses that exceed 20 percent of the premiums earned in that calendar year.
3. (c) For a group hospital service corporation earning $500 million or more in premiums in a calendar year, the maximum percentage of general expenses that may be incurred during a calendar year is reduced by one-half percent for each $50 million of premiums earned to a maximum percentage of 15 percent.

Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.