Relating to the administration of the Texas Department of Insurance, including the appointment of the state commission of insurance.

89(R) SB 1642 - Engrossed version - Bill Text

By: Schwertner, Middleton

S.B. No. 1642

A BILL TO BE ENTITLED

AN ACT

relating to the administration of the Texas Department of

Insurance, including the appointment of the state commission of

insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 31.001(1), Insurance Code, is amended to

read as follows:

(1)
"Commission"
[
"Commissioner"
] means the
state

commission
[
commissioner
] of insurance.

SECTION 2. Section 31.007, Insurance Code, is amended to

read as follows:

Sec. 31.007. REFERENCES TO BOARD
OR COMMISSIONER
. A

reference in this code or other law to the
former
State Board of

Insurance, the Board of Insurance Commissioners, [
or
] an individual

commissioner
, or the commissioner of insurance
means the
commission

[
commissioner
] or the department as consistent with the respective

duties of the
commission
[
commissioner
] and the department under

this code and other insurance laws.

SECTION 3. The heading to Subchapter B, Chapter 31,

Insurance Code, is amended to read as follows:

SUBCHAPTER B.
STATE COMMISSION
[
COMMISSIONER
] OF INSURANCE

SECTION 4. Section 31.021, Insurance Code, is amended to

read as follows:

Sec. 31.021.
GOVERNING BODY
[
CHIEF EXECUTIVE
]. (a) The

commission
[
commissioner
] is the department's
governing body

[
chief executive and administrative officer
]. The
commission

[
commissioner
] shall administer and enforce this code, other

insurance laws of this state, and other laws granting jurisdiction

or applicable to the department or the
commission
[
commissioner
].

(b) The
commission
[
commissioner
] has the powers and duties

vested in the department by:

(1) this code and other insurance laws of this state;

and

(2) Title 5, Labor Code, and other workers'

compensation insurance laws of this state.

SECTION 5. Section 31.022, Insurance Code, is amended to

read as follows:

Sec. 31.022. APPOINTMENT; TERM
; PRESIDING OFFICER
.

(a) The governor, with the advice and consent of the senate, shall

appoint
three members to serve on the commission serving staggered

terms of six years
[
the commissioner.

The commissioner serves a

two-year term that expires on February 1 of each odd-numbered

year
].

(b)
In appointing members to serve on the commission, the

governor shall appoint:

(1) one member with expertise in insurance regulation;

(2)

one member with expertise in insurance

administration; and

(3)

one member with expertise in insurance consumer

advocacy.

(c)

The governor shall designate one member of the

commission as the presiding officer.

The presiding officer:

(1) serves at the pleasure of the governor;

(2)

serves for a two-year term that expires February 1

of each odd-numbered year; and

(3)

is ineligible to be designated as presiding

officer more than once during a six-year period.

(d)
The governor shall appoint
a member of the commission

[
the commissioner
] without regard to the race, color, disability,

sex, religion, age, or national origin of the appointee.

SECTION 6. Section 31.023, Insurance Code, is amended to

read as follows:

Sec. 31.023. QUALIFICATIONS.
A member of the commission

[
The commissioner
] must:

(1) be a competent and experienced administrator;

(2) be well informed and qualified in the field of

insurance and insurance regulation; [
and
]

(3)
be well informed and qualified in consumer

advocacy;

(4)
have at least five years of experience in the

administration of business or government or as a practicing

attorney
,
[
or
] certified public accountant
, physician, dentist,

chiropractor, podiatrist, or health care administrator or business

owner; and

(5) be a resident of this state
.

SECTION 7. Section 31.024, Insurance Code, is amended to

read as follows:

Sec. 31.024. INELIGIBILITY FOR PUBLIC OFFICE.
A member of

the commission
[
The commissioner
] is ineligible to be a candidate

for
another
[
a
] public elective office in this state, unless the

member
[
commissioner
] has resigned and the governor has accepted

the resignation.

SECTION 8. Section 31.027, Insurance Code, is amended to

read as follows:

Sec. 31.027. GROUNDS FOR REMOVAL. (a) It is a ground for

removal from office if
a member of the commission
[
the

commissioner
]:

(1) does not have at the time of appointment the

qualifications required by Section 31.023;

(2) does not maintain during service as
member

[
commissioner
] the qualifications required by Section 31.023;

(3) violates a prohibition established by Section

33.001, 33.003, 33.004, or 33.005; or

(4) cannot, because of illness or disability,

discharge the
member's
[
commissioner's
] duties for a substantial

part of the
member's
[
commissioner's
] term.

(b) The validity of an action of the
commission

[
commissioner
] or the department is not affected by the fact that it

is taken when a ground for removal of
a member of
the
commission

[
commissioner
] exists.

SECTION 9. Subchapter C, Chapter 31, Insurance Code, is

amended by adding Section 31.040 to read as follows:

Sec.

31.040.

DEFINITION. In this subchapter, "executive

director" means the department's executive director employed under

Section 31.041.

SECTION 10. Section 31.041, Insurance Code, is amended to

read as follows:

Sec. 31.041.
EXECUTIVE DIRECTOR;
DEPARTMENT PERSONNEL.

(a) Subject to the General Appropriations Act or other law, the

commission
[
commissioner
] shall
employ:

(1) an executive director; and

(2) officers and employees the commission considers

[
appoint deputies, assistants, and other personnel as
] necessary to

carry out the powers and duties of the
commission
[
commissioner
]

and the department under this code, other insurance laws of this

state, and other laws granting jurisdiction or applicable to the

department or the
commission
[
commissioner
].

(b) A person
employed
[
appointed
] under this section must

have the professional, administrative, and insurance experience

necessary to qualify the person for the position to which the person

is
employed
[
appointed
].

[
(c)

A person appointed as an associate or deputy

commissioner or to hold an equivalent position must have at least

five years of the experience required for appointment as

commissioner under Section 31.023.

At least two years of that

experience must be in work related to the position to be held.
]

SECTION 11. Section 31.042, Insurance Code, is amended to

read as follows:

Sec. 31.042.
DUTIES OF EXECUTIVE DIRECTOR;
DIVISION OF

DEPARTMENT PERSONNEL
RESPONSIBILITIES.
(a)

The executive director

is responsible for the daily operations of the department and shall

coordinate the activities of department officers and employees.

(b)
The
executive director
[
commissioner
] shall develop and

implement policies that clearly define the respective

responsibilities of [
the commissioner and the staff of the
]

department
officers and employees
.

SECTION 12. Section 31.043(a), Insurance Code, is amended

to read as follows:

(a) The
executive director
[
commissioner or the

commissioner's designee
] shall prepare and maintain a written

policy statement to ensure implementation of a program of equal

employment opportunity under which all personnel transactions are

made without regard to race, color, disability, sex, religion, age,

or national origin. The policy statement must include:

(1) personnel policies, including policies relating

to recruitment, evaluation, selection, appointment, training, and

promotion of personnel that are in compliance with Chapter 21,

Labor Code;

(2) a comprehensive analysis of the department

workforce that meets federal and state guidelines;

(3) procedures by which a determination can be made of

significant underuse in the department workforce of all persons for

whom federal or state guidelines encourage a more equitable

balance; and

(4) reasonable methods to appropriately address those

areas of significant underuse.

SECTION 13. Section 31.044, Insurance Code, is amended to

read as follows:

Sec. 31.044. QUALIFICATIONS AND STANDARDS OF CONDUCT. The

executive director
[
commissioner
] shall provide to
the commission

and
department
officers and
employees, as often as necessary,

information regarding their:

(1) qualification for office or employment under this

code; and

(2) responsibilities under applicable laws relating

to standards of conduct for state
officers and
employees.

SECTION 14. Section 31.045, Insurance Code, is amended to

read as follows:

Sec. 31.045. CAREER LADDER PROGRAM; PERFORMANCE

EVALUATIONS. (a) The
executive director
[
commissioner or the

commissioner's designee
] shall develop an intra-agency career

ladder program. The program must require intra-agency posting of

all nonentry level positions concurrently with any public posting.

(b) The
executive director
[
commissioner or the

commissioner's designee
] shall develop a system of annual

performance evaluations. All merit pay for department
officers and

employees must be based on the system established under this

subsection.

SECTION 15. Sections 33.002(a) and (b), Insurance Code, are

amended to read as follows:

(a) A person is not eligible for appointment as
a member of

the commission
[
commissioner
] if the person, the person's spouse,

or any other person who resides in the same household as the person:

(1) is registered, certified, or licensed by the

department;

(2) is employed by or participates in the management

of a business entity or other organization regulated by or

receiving funds from the department;

(3) owns or controls, directly or indirectly, more

than a 10 percent interest in a business entity or other

organization regulated by or receiving funds from the department;

or

(4) uses or receives a substantial amount of tangible

goods, services, or funds from the department, other than

compensation or reimbursement authorized by law.

(b) A person is not eligible for appointment as
a member of

the commission
[
commissioner
] if the person:

(1) is a stockholder, director, officer, attorney,

agent, or employee of an insurance company, insurance agent,

insurance broker, or insurance adjuster; or

(2) is directly or indirectly interested in a business

described by Subdivision (1).

SECTION 16. Sections 33.004(a) and (b), Insurance Code, are

amended to read as follows:

(a) A person who is an officer, employee, or paid consultant

of a trade association in the field of insurance may not be:

(1)
a member of
the
commission
[
commissioner
]; or

(2) an employee of the department who is exempt from

the state's position classification plan or is compensated at or

above the amount prescribed by the General Appropriations Act for

step 1, salary group A17, of the position classification salary

schedule.

(b) A person who is the spouse of an officer, manager, or

paid consultant of a trade association in the field of insurance may

not be:

(1)
a member of
the
commission
[
commissioner
]; or

(2) an employee of the department who is exempt from

the state's position classification plan or is compensated at or

above the amount prescribed by the General Appropriations Act for

step 1, salary group A17, of the position classification salary

schedule.

SECTION 17. Not later than December 1, 2025, the governor

shall:

(1) appoint each initial member of the state

commission of insurance to serve staggered terms beginning January

1, 2026, with one of the members serving a two-year term, one of the

members serving a four-year term, and one of the members serving a

six-year term; and

(2) designate a member appointed under Subdivision (1)

of this section as the initial presiding officer of the state

commission of insurance.

SECTION 18. Until each member of the initial state

commission of insurance is appointed and confirmed by the senate in

the manner provided by Section 31.022, Insurance Code, as amended

by this Act, the commissioner of insurance serving on the effective

date of this Act shall, unless otherwise removed as provided by law,

continue in office under the prior law that governed the office, and

that prior law is continued in effect for that purpose. If on

January 1, 2026, there is a vacancy in the office of a member of the

state commission of insurance created under this Act because the

initial appointee has not been confirmed by the senate as provided

by Section 31.022, Insurance Code, as amended by this Act, has died,

or refuses or is permanently unable to serve, the commissioner

serving on that date shall, unless otherwise removed as provided by

law, continue in office under the prior law that governed the office

until the governor fills the vacancy by appointment in the manner

provided by Section 31.022, Insurance Code, as amended by this Act.

The prior law that governed the office of the commissioner of

insurance is continued in effect for that purpose.

SECTION 19. This Act takes effect September 1, 2025.