1. (a) Purpose and applicability.

   1. (1) The purpose of this section is to provide the means by which insurers and health maintenance organizations (HMOs) may comply with the notice requirements of the Insurance Code §521.103, and the means by which insurers may comply with the notice requirements of the Insurance Code §521.005 and §521.056. Compliance with this section is deemed compliance with these notice requirements.
   2. (2) Except as provided by subsection (b)(3), this section applies to any new or renewal insurance policy, bond, annuity contract, subscriber contract, health care plan, certificate, and evidence of coverage issued for delivery in this state on or after May 1, 1992.
   3. (3) All policies, certificates, or evidences of coverage which are delivered, issued for delivery, or renewed in the State of Texas on or after May 1, 1992, by insurers or HMOs shall have the notice included as the first, second, or third page of the policy, certificate, evidence of coverage, or first written communication indicating renewal of coverage, pursuant to the provisions of subsection (b) of this section. The notice must appear on a full, separate page with no text other than that provided in this section. The form of the notice shall be as provided by subsection (b) of this section. The item numbers 1 - 8 in the left-hand column of this form correspond to the respective paragraphs of subsection (b) of this section, and the item numbers may be omitted from the notice.
      Attached Graphic
      

2. (b) Notice requirements. Each respectively numbered item in the notice provided in subsection (a)(3) of this section must be set out as provided in this subsection. There must be at least one blank line between each item, but the text within each item may be single-spaced. The Spanish portion of each item included in a company's notice is required only for personal automobile, homeowners, and life, accident and health policies, certificates, and evidences of coverage. Text shall be in at least 10-point type. The letterhead of the insurer or HMO and any automated form identification numbers may be included on the notice.

   1. (1) Item 1 must be included in all notices. "Important Notice" and "Aviso Importante" must be in all capital letters and in at least 10-point boldface type. There must be at least one blank line below "Important Notice" and "Aviso Importante."
   2. (2) Item 2 is optional. The title for the English portion may be either "agent," "third party administrator," "managing general agent," or "employee benefits coordinator." The title for the Spanish portion may be either "agente," "administrador tercero," "agente general," or "administrador de beneficios para empleados." In lieu of a specific telephone number, the insurer or HMO may refer to the applicable telephone number and where it can be found.

   3. (3) Item 3 is required unless one of the exemptions provided in this subsection applies. For purposes of this section a toll-free telephone number is one which can be used by any covered person to obtain information or make a complaint without incurring long-distance calling expenses. The insurer's or HMO's toll-free number must appear in at least 10-point boldface type and must be preceded and followed by one blank line. Item 3 is not required for an insurer or HMO:

      1. (A) whose gross initial premium receipts collected in this state are less than $2 million a year;
      2. (B) with respect to fidelity, surety, or guaranty bonds;
      3. (C) that is a surplus lines insurer; or

      4. (D) with respect to certificates of insurance issued under a group policy:

         1. (i) if the insurer does not administer the group policy or determine questions of coverage; or
         2. (ii) if the policyholder to whom the policy is issued is an employer or a labor union.
   4. (4) Item 4 is optional. If used, the insurer's or HMO's name and address must be inserted.
   5. (5) Item 5 is required on all notices. The toll-free number must be in at least 10-point boldface type and must be preceded and followed by one blank line.
   6. (6) Item 6 is required on all notices.
   7. (7) Item 7 is required on all notices except those notices provided by HMOs with evidences of coverage. "Premium or claim disputes" and "Disputas sobre primas o reclamos" must be in all capital letters and 10-point boldface type. The insurer may insert either "agent," "company," or "agent or company" and may insert either "el agente," "la compania," or "el agente o la compania."
   8. (8) Item 8 is required on all notices. "Attach this notice to your policy" and "Una este aviso a su poliza" must be in all capital letters and 10-point boldface type.

3. (c) Exceptions to notice requirements for insurer's toll-free number.

   1. (1) Requirements. Any exception claimed pursuant to subsection (b)(3)(A) of this section for a policy, certificate, or evidence of coverage delivered, issued for delivery, or renewed in a given year must be based on gross initial premium receipts collected in Texas during the previous calendar year. Any insurer or health maintenance organization claiming an exception must provide to the Texas Department of Insurance, at a minimum, the following information:

      1. (A) a statement reciting the statutory basis for the exception;
      2. (B) a statement detailing the amount of gross initial premium receipts collected in this state for the calendar year immediately preceding the calendar year for which an exception is claimed; and
      3. (C) an affirmation by the chief executive officer or chief financial officer of the insurer or health maintenance organization certifying that he or she has reviewed the information and that such filed information is true, accurate, and complete, based upon that person's best knowledge, information, and belief.

   2. (2) Procedure. This statement must be filed separately from all other forms and exception statements filed with respect to other matters pending before the department. Claims for exception must be addressed to the appropriate regulatory division within the department.

      1. (A) Mail codes for the respective divisions are as follows:

         1. (i) Life, Accident, and Health 106-1A;
         2. (ii) Property and Casualty (including Workers' Compensation) 104-3B;
         3. (iii) Title 106-2T;
         4. (iv) Risk Retention Groups 305-2C;
         5. (v) HMO 106-1E.
      2. (B) Exception statements should be filed with the Texas Department of Insurance, (Name of Division), (Mail Code #), P.O. Box 149104, Austin, Texas 78714-9104.
   3. (3) Duration of exception. Exceptions remain in effect for one year. The information required by paragraph (1) of this subsection must be provided to the department no later than May 1, 1992, for calendar year 1992, and no later than March 15 of any subsequent year for which an exception is claimed.
   4. (4) Policy and form filings. When an insurer or health maintenance organization files a policy form or evidence of coverage with the department for information or review, any exception to the requirements of this section pertaining to the insurer's toll-free telephone number must be noted in the filing. If a prior exception has not been granted, the documentation required by paragraph (1) of this subsection must be filed.

   5. (5) Records maintenance. Except as specifically provided in subparagraphs (A) and (B) of this paragraph, beginning with calendar year 1993, any insurer or health maintenance organization claiming an exception must maintain a system by which information pertaining to receipt of initial premiums is tracked on a calendar year basis. This information shall include for each new policy written during a calendar year the following: 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 such insurance. Such information and any other data upon which the company relied in making the determination that it was entitled to the exception shall be made available to the department upon request and is subject to examination by the department. Failure by any insurer or HMO to maintain the information required in this paragraph or to provide such information to the department upon request constitutes grounds for disciplinary action which may result in the cancellation, revocation, or suspension of such insurer's or HMO's certificate of authority.

      1. (A) Any insurer or HMO which is authorized to write business in Texas and which claims an exception to the maintenance of a toll-free telephone number for a calendar year is not required to maintain information pertaining to initial premium receipts as set out in this paragraph in order to claim the exception if the exception is based on the criteria set out in any of clauses (i) - (iv) of this subparagraph, as follows:

         1. (i) such insurer or HMO claims the exception based on receipt of gross premiums of less than $2 million for the prior calendar year for business written in this state, as reported on its annual statement;
         2. (ii) such insurer or HMO claims the exception based on receipt of gross first-year premiums of less than $2 million for the prior calendar year for all business, as reported on its annual statement;
         3. (iii) such insurer or HMO writes business only in Texas and claims the exception based on receipt of gross first-year premiums of less than $2 million for the prior calendar year, as reported on its annual statement; or
         4. (iv) such insurer or HMO claims the exception based on receipt of gross initial first-year premiums of less than $2 million for business written in Texas, as reported on its annual statement.
      2. (B) Any insurer or HMO which is authorized to write business in Texas, but which does not meet the criteria of subparagraph (A) of this paragraph and which claims an exception based on receipt of gross first-year premiums of less than $2 million for business written in this state must maintain a system by which information pertaining to receipt of first-year premiums for Texas business is tracked on a calendar year basis. This information shall include for each new policy written during a calendar year the following: the policy number; effective date of the policy; and amount of the first-year premium received, including any membership fees, assessments, dues, and any other considerations for such insurance.

4. (d) Policies in force prior to May 1, 1992, and renewed on or after May 1, 1992. The notice required to be provided by this section shall be provided with the first premium notice, or other communication indicating renewal of the coverage mailed or delivered after May 1, 1992.

   1. (1) For all policies, certificates or evidences of coverage in force prior to May 1, 1992, and renewed by any insurer or health maintenance organization on or after May 1, 1992, the notice required to be provided by this section shall either be mailed or be personally delivered to the policyholder, certificate holder, or enrollee, except as provided by paragraph (2) of this subsection.
   2. (2) For all group policies in force prior to May 1, 1992, and renewed by any insurer or health maintenance organization on or after May 1, 1992, the notice required to be provided by this section may be provided to the group policyholder for delivery to each certificate holder or enrollee under the group policy, or it may be mailed directly to each certificate holder or enrollee by the insurer or health maintenance organization.
5. (e) Policies, bonds, annuity contracts, and certificates. Policies, bonds, annuity contracts, and certificates subject to the provisions of this section which required prior approval and were approved or filed prior to May 1, 1992, may be delivered or issued for delivery with the notice required by this section without refiling for approval.
6. (f) Additions to group coverage. When an individual is added as a certificate holder, annuitant, or enrollee to a policy or plan issued, delivered, or renewed on or after May 1, 1992, the notice required by this section must be included as the first, second, or third page of the certificate, annuity contract, or evidence of coverage.
7. (g) These amendments are effective July 1, 2007.

Source Note:The provisions of this §1.601 adopted to be effective August 24, 1984, 9 TexReg 4340; amended to be effective June 12, 1990, 15 TexReg 3015; amended to be effective May 1, 1992, 17 TexReg 2776; amended to be effective October 28, 1992, 17 TexReg 7230; amended to be effective January 22, 2007, 32 TexReg 241.