PART 1. TEXAS DEPARTMENT OF INSURANCE
CHAPTER 5. PROPERTY AND CASUALTY INSURANCE
SUBCHAPTER A. AUTOMOBILE INSURANCE
DIVISION 3. MISCELLANEOUS INTERPRETATIONS
The commissioner of insurance adopts amendments to 28 TAC §5.205, concerning the Motor Vehicle Crime Prevention Authority (MVCPA) pass-through fee. The amendments are adopted with changes to the proposed text published in the August 16, 2024, issue of the Texas Register (49 TexReg 6146). The section was revised in response to public comment.
REASONED JUSTIFICATION. The amendments to §5.205 are necessary to implement Senate Bill 224, 88th Legislature, 2023, which amended Transportation Code §1006.153 to increase the MVCPA fee amount from $4 to $5 to help fund the detection and prevention of catalytic converter thefts. The amendments replace the $4 fee amount and update the language in the notice that insurers must provide to policyholders when recouping the MVCPA fee.
To provide adequate time for insurers to update the notice as required under subsection (b), the changes made to §5.205 will become effective on April 30, 2025.
Descriptions of the section's adopted amendments follow.
Section 5.205. The amendments to subsection (a) remove the $4 fee amount. Instead of replacing the $4 fee amount with the updated $5 fee, the adopted text states that the insurer must pay the MVCPA fee as set by Transportation Code §1006.153(b). This change removes the need to update the fee amount if it is changed in the statute in the future.
Subsection (b) updates the notice that an insurer must provide to a policyholder when the insurer seeks to recoup the MVCPA fee, adding that the detection and prevention of catalytic converter thefts is an activity that the MVCPA fee helps to fund.
Existing subsections (c) and (d) are removed because they contained instructions for updating and filing the notice that were based on a previous amendment. Insurers should have already made these updates to the notice required under subsection (b), making these subsections unnecessary.
As proposed, a new subsection (c) would have added a requirement that insurers file a new or revised notice with TDI and clarified that insurers did not need to include the actual fee amount in the filed notice. In response to a comment, the commissioner declines to adopt proposed subsection (c). Insurers are not required to file the new or revised notice unless the amended language appears on a policy form, endorsement, or declarations page that must be filed for approval under Insurance Code Chapter 2301.
SUMMARY OF COMMENTS AND AGENCY RESPONSE. TDI provided an opportunity for public comment on the rule proposal for a period that ended on September 16, 2024.
Commenter: TDI received one comment from American Property Casualty Insurance Association opposing the requirement to file another new or revised notice with TDI.
Comment on §5.205
Comment. A commenter says that the addition in subsection (c) requiring insurers to file a new or revised notice with TDI is unnecessary and burdensome and will require substantial costs that will ultimately be shifted to Texas consumers.
Agency Response. Although the updated notice language is important to promote transparency and ensure policyholders are sufficiently informed, TDI agrees to remove subsection (c). Insurers must still update the notice to reflect the requirements in §5.205 but do not need to file the amended notice with TDI. However, if the notice language appears on a declarations page, policy form, or endorsement, the insurer must file the amended form for approval according to Insurance Code Chapter 2301.
STATUTORY AUTHORITY. The commissioner adopts the amendments to 28 TAC §5.205 under Transportation Code §1006.153 and Insurance Code §36.001.
Transportation Code §1006.153 provides that an insurer pay to the MVCPA a fee equal to $5 multiplied by the total number of motor vehicle years of insurance for insurance policies delivered, issued for delivery, or renewed by the insurer.
Insurance Code §36.001 provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state.
§5.205.Motor Vehicle Crime Prevention Authority Pass-Through Fee.
(a) Each insurer must pay a fee per "motor vehicle year of insurance" to the Motor Vehicle Crime Prevention Authority, as set by Transportation Code §1006.153(b), concerning Fee Imposed on Insurer. The insurer is authorized to recoup some or all of this fee from the policyholder.
(b) If an insurer recoups the fee from the policyholder under subsection (a) of this section, the insurer must:
(1) provide the policyholder with a notice using the following or similar language, in at least 10-point type: "Your payment includes a [$_______] fee per vehicle each year. This fee helps fund (1) auto burglary, theft, and fraud prevention; (2) criminal justice efforts; (3) trauma care and emergency medical services for victims of accidents due to traffic offenses; and (4) the detection and prevention of catalytic converter thefts. By law, this fee funds the Motor Vehicle Crime Prevention Authority.";
(2) include the notice on or with each motor vehicle insurance policy, as defined in 43 TAC §57.48 (relating to Motor Vehicle Years of Insurance Calculations), that is delivered, issued for delivery, or renewed in this state, including those policies issued through the Texas Automobile Insurance Plan Association; and
(3) if the notice language required by paragraph (1) of this subsection is provided somewhere other than the declarations page, renewal certificate, or billing, also include the following or similar language on the declarations page of the policy, renewal certificate, or billing: "Motor Vehicle Crime Prevention Authority Fee [$______] (See enclosed explanation)."
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 January 30, 2025.
TRD-202500344
Jessica Barta
General Counsel
Texas Department of Insurance
Effective date: April 30, 2025
Proposal publication date: August 16, 2024
For further information, please call: (512) 676-6555
CHAPTER 131. BENEFITS--LIFETIME INCOME BENEFITS
SUBCHAPTER A. GENERAL PROVISIONS
INTRODUCTION. The Texas Department of Insurance, Division of Workers' Compensation (DWC) adopts new 28 TAC §131.5, concerning verification by the Subsequent Injury Fund (SIF).
New §131.5 is adopted with changes to the proposed text published in the September 27, 2024, issue of the Texas Register (49 TexReg 7837). Section 131.5 will be republished. In response to comments, DWC replaced the terms "lifetime income benefits recipient" and "recipient" with "injured employee" to be consistent with other income benefit rules, and added a sentence to clarify that, if the injured employee is unable to provide the required information, the SIF will hold any pending benefit payments until verification is complete.
REASONED JUSTIFICATION. The new section requires the SIF to verify that the lifetime income benefits (LIBs) recipient (injured employee) is living, receiving LIBs payments, and their contact information has not changed. The new section also requires the injured employee to certify the information with the SIF each month over a telephone call, video call, or other online verification system to receive the LIBs payment from the SIF. It clarifies that the SIF will hold any pending benefit payments until the injured employee verifies the information in subsection (a). New §131.5 is necessary to implement Labor Code §§408.081, 408.161, and 408.162.
Labor Code §§408.081 and 408.161 pertain to when and how injured employees receive LIBs and require that LIBs are payable only while the injured employee is alive. New §131.5 is necessary to implement those sections effectively by ensuring that DWC is notified of the injured employee's death before the SIF issues a LIBs payment to that injured employee.
Labor Code §408.162 applies when an injury combines with a subsequent injury to qualify an injured employee for LIBs. In these situations, the insurance carrier for the subsequent injury pays benefits for the subsequent injury as if the previous injury did not happen, and the SIF pays the difference between the LIBs and the amount the insurance carrier pays for the subsequent injury. New §131.5 is necessary for DWC to verify that the injured employee is still alive, preventing the waste of public funds when the SIF makes these payments to the injured employee.
SUMMARY OF COMMENTS AND AGENCY RESPONSE.
Commenters: DWC received two written comments, and no oral comments. The Office of Injured Employee Counsel (OIEC) requested several clarifications. Texas Mutal Insurance Company (TMIC) commented in support of the proposal with changes.
Comment. OIEC asked DWC to clarify that any income payments withheld because a recipient failed to verify the required information will only be placed on hold and released to the recipient once verification is made.
Agency Response to Comment. DWC appreciates the comment. Under §131.5, the SIF will release the withheld payments when the recipient provides the information required by subsection (a). In addition, DWC has added a sentence to subsection (b) to clarify that any benefits that are on a temporary hold will be released once verification is complete.
Comment. OIEC asked DWC to clarify that DWC will continue to make monthly outreach to injured employees and that the intent of the rule is not to shift the burden to the injured employees.
Agency Response to Comment. DWC appreciates the comment. The SIF will attempt to contact the injured employee before the SIF makes each payment. The injured employee must provide the information required by subsection (a) to the SIF.
Comment. OIEC asked DWC to clarify that an authorized representative is permitted to verify the information.
Agency Response to Comment. DWC appreciates the comment. A representative, as defined by Labor Code §401.011 and 28 TAC §150.3, can verify the information required by this rule. A representative that fails to comply with the Labor Code or a DWC rule may be subject to sanctions as provided by law.
Comment. TMIC expressed concern that the proposed rule does not provide for notice to the insurance carrier that the injured employee has not provided the required verification, because the insurance carrier may also be making payments to an injured employee under §131.3. TMIC recommended that the proposed rule be revised to provide sufficient written notice to the injured employee and the insurance carrier if the SIF suspends or later reinstates LIBs.
Agency Response to Comment. DWC appreciates the comment but declines to make the change. DWC's practice is to communicate with the insurance carrier only if the insurance carrier is paying a portion of the LIBs.
Comment. TMIC recommended that DWC consider providing a clear process in the rule to suspend or reinstate benefits if verification is later completed or the injured employee becomes entitled to LIBs again under the provisions of Labor Code §408.1615.
Agency Response to Comment. DWC appreciates the comment and has added a sentence to the rule to clarify that any LIBs payments that were left pending due to the injured employee not completing the required verification will be issued once the verification is complete.
Comment. TMIC recommended that the proposal be revised to replace the term "lifetime income benefit recipients" with "injured employees."
Agency Response to Comment. DWC appreciates the comment and has replaced the terms "lifetime income benefit recipient" and "recipient" with "injured employee" to be consistent with other income benefit rules.
STATUTORY AUTHORITY. The commissioner of workers' compensation adopts new 28 TAC §131.5 under Labor Code §§402.00111, 402.00116, 402.00128, 402.021, 402.061, 408.081, 408.161, and 408.162.
Labor Code §402.00111 provides that the commissioner of workers' compensation shall exercise all executive authority, including rulemaking authority under Title 5 of the Labor Code.
Labor Code §402.00116 provides that the commissioner of workers' compensation shall administer and enforce this title, other workers' compensation laws of this state, and other laws granting jurisdiction to or applicable to DWC or the commissioner.
Labor Code §402.00128(b)(12) provides that the commissioner may exercise other powers and perform other duties as necessary to implement and enforce the Workers' Compensation Act.
Labor Code §402.021(b)(3) provides that the workers' compensation system must provide appropriate income benefits and medical benefits in a manner that is timely and cost-effective.
Labor Code §402.061 provides that the commissioner of workers' compensation shall adopt rules as necessary to implement and enforce the Texas Workers' Compensation Act.
Labor Code §408.081(d) provides that an employee's entitlement to LIBs ends on the death of the employee.
Labor Code §408.161(a) provides that LIBs are paid until the death of the employee.
Labor Code §408.162(a) provides that, when an injury combines with a subsequent injury to qualify an injured employee for LIBs, the insurance carrier for the subsequent injury pays benefits for the subsequent injury as if the previous injury did not happen. Section 408.162(b) requires the SIF to pay the difference between the amount of LIBs and the amount the insurance carrier pays for the subsequent injury.
§131.5.Verification by the Subsequent Injury Fund.
(a) The Subsequent Injury Fund must confirm the following information before making a payment to the injured employee:
(1) the injured employee is living;
(2) lifetime income benefits are being received; and
(3) the injured employee's contact information is correct.
(b) The injured employee must provide the information required by subsection (a)(1) - (3) to the Subsequent Injury Fund each month over a telephone call, video call, or other online verification system to receive the lifetime income benefit payment from the Subsequent Injury Fund. If the injured employee is unable to provide the information, the Subsequent Injury Fund will hold any pending payments until verification is complete.
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 January 29, 2025.
TRD-202500298
Kara Mace
General Counsel
Texas Department of Insurance, Division of Workers' Compensation
Effective date: February 18, 2025
Proposal publication date: September 27, 2024
For further information, please call: (512) 804-4703