Health Insurance 

Regulation of Health Insurance

Regulation of Rates

TDI examines rates for the health insurance and HMO markets, but it does not have the authority to reject rates. It can only determine if a proposed rate increase is actuarially sound.  TDI examines rates using the actuarial standards of practice adopted by the Actuarial Standards Board.  If a company proposes a rate that TDI feels is not actuarially sound, it works with the company to change the rates. 

Because TDI does not have the authority to disapprove rates, there are no administrative remedies if these rates are not actuarially sound.  Actuarially sound means that the rates are sufficient to pay for the losses and related costs which are known or projected by the insurer.  TDI also examines whether the rates are excessive, unfairly discriminatory, and/or adequate to pay all of the plan’s benefit payments, administrative expenses, and other operational expenses.  Companies must notify consumers at least 60 days before the date a premium rate increase takes effect. (TIC § 1201.109(a))


Regulation of Forms

Companies must file health insurance forms with the Texas Department of Insurance ("TDI") at least 60 days before using them (See Texas Insurance Code § 1701.051).  TDI reviews forms using a checklist that includes policy provisions that are required and prohibited by law and rule (the checklists  are based on the type of plan and are available for review on the TDI website at the following link: TDI List of Life, Health, and Accident Forms).  The policy forms must include required policy provisions such as incontestability clauses and grace periods and mandated benefits such as childhood immunizations and colorectal cancer testing.  The checklist also outlines prohibited provisions, such as a restriction of the assignment of benefits. 

Any permissible exclusion or limitation included in the policy must be clear and specific. (TIC § 1201.055 and 28 TAC § 3.3056 and § 3.3057(c))  In addition, forms must be readable (28 TAC §§ 3.3100-.3102) and not include any unfair or unjust language (TIC § 1701.055(b)(2)).  Companies cannot use forms that have been disapproved by TDI.  (TIC § 1701.056)  If a company does use a form disapproved by the TDI and the form results in financial damage to a consumer, the commissioner can order restitution.  (TIC § 1701.101)