CHAPTER 40. DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS AND COMMISSIONER IN CERTAIN PROCEEDINGS; RATE SETTING PROCEEDINGS
INSURANCE CODE
TITLE 2. TEXAS DEPARTMENT OF INSURANCE
SUBTITLE A. ADMINISTRATION OF THE TEXAS DEPARTMENT OF INSURANCE
CHAPTER 40. DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS AND
COMMISSIONER IN CERTAIN PROCEEDINGS; RATE SETTING PROCEEDINGS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 40.001. DEFINITION. In this chapter, "office" means the
State Office of Administrative Hearings.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.002. DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS.
The office shall conduct an administrative hearing required to be
held or that may be held under this code or another insurance law
of this state.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.003. APPLICATION OF CHAPTER; EXCEPTIONS. (a) This
chapter applies only to a hearing required to be held before a
decision may be rendered or action taken by the commissioner or
the department.
(b) If a provision of this code or another insurance law of this
state requires that the commissioner take an action at a hearing
subject to this chapter, the commissioner shall take the action
after receipt of a proposal for decision from the office
regarding the hearing conducted by the office.
(c) This chapter does not apply to a proceeding conducted under
Chapter 201 or to a proceeding relating to:
(1) approving or reviewing rates or rating manuals filed by an
individual company, unless the rates or manuals are contested;
(2) adopting a rule;
(3) adopting or approving a policy form or policy form
endorsement;
(4) adopting or approving a plan of operation for an
organization subject to the jurisdiction of the department;
(5) adopting a presumptive rate under Chapter 1153; or
(6) a workers' compensation claim brought under Title 5, Labor
Code.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1318, Sec. 3, eff.
Sept. 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch.
265, Sec. 6.057, eff. September 1, 2005.
Sec. 40.004. MEMORANDUM OF UNDERSTANDING. (a) The commissioner
and the chief administrative law judge of the office by rule
shall adopt a memorandum of understanding governing hearings
conducted by the office under this code or another insurance law
of this state.
(b) The memorandum of understanding must require the chief
administrative law judge and the commissioner to cooperate in
conducting hearings under this chapter and may authorize the
office to perform any procedural act, including giving notice,
that is required to be performed by the commissioner under this
code or another insurance law of this state.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.005. CONFLICT WITH OTHER LAW. This chapter prevails
over another provision of this code or another insurance law of
this state unless the provision or other law states that this
chapter does not apply.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
SUBCHAPTER B. PROCEEDINGS RELATING TO PROMULGATION OF RATES
Sec. 40.051. APPLICATION OF SUBCHAPTER. Subject to Section
40.003, a proceeding to promulgate rates is governed by this
subchapter.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.052. APPLICATION OF ADMINISTRATIVE PROCEDURE ACT. A
proceeding to promulgate rates is a contested case under Chapter
2001, Government Code, and to the extent not inconsistent with
this subchapter, that chapter and the Texas Rules of Civil
Procedure apply.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.053. PRESENTATION OF EVIDENCE. The administrative law
judge shall provide each interested party an opportunity to
respond to and present evidence and argument concerning all
issues in the proceeding.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.054. WITNESSES AND CROSS-EXAMINATION. (a) The
testimony of a witness, other than an expert witness, may be
presented either orally by the witness at the hearing or by
affidavit.
(b) Each party is entitled to cross-examine each witness called
to testify by another party to the proceeding. The attendance of
a witness providing testimony by affidavit is required if a party
files a written request that the witness appear for
cross-examination.
(c) If a witness providing testimony by affidavit fails to
appear for cross-examination after the filing of a written
request that the witness appear, the administrative law judge
shall exclude the affidavit from evidence and may not consider
the affidavit for any purpose.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.055. TESTIMONY OF EXPERT WITNESS; PREFILING REQUIRED.
The direct testimony of each expert witness to be called must be
prefiled in accordance with a schedule established by the
administrative law judge.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.056. DEADLINES. The administrative law judge shall
establish reasonable deadlines for the filing of affidavits, the
designation of witnesses, and other matters as are necessary or
appropriate.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.057. INFLUENCE OF COMMISSIONER PROHIBITED. The
commissioner may not attempt to influence the administrative law
judge's findings of fact, conclusions of law, or application of
the law to the facts.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.058. PROPOSAL FOR DECISION. The administrative law
judge shall:
(1) prepare a proposal for decision that includes proposed
findings of fact and conclusions of law; and
(2) serve the proposal for decision by registered mail on each
party to the proceeding.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.059. CONSIDERATION OF PROPOSAL FOR DECISION. (a) The
commissioner shall provide to each party an opportunity to file
exceptions to the proposal for decision and briefs related to the
issues addressed in the proposal.
(b) After the opportunity to file exceptions and briefs under
Subsection (a), the commissioner shall, in open meeting,
consider:
(1) the proposal for decision; and
(2) the exceptions, briefs, and arguments of the parties.
(c) The commissioner may amend the proposal for decision,
including any finding of fact. The commissioner shall accompany
any amendment with an explanation of the basis of the amendment.
The commissioner shall base any amendment and the order adopting
the rate solely on the record made before the administrative law
judge.
(d) The commissioner may refer the matter back to the
administrative law judge to:
(1) reconsider findings and conclusions in the proposal for
decision;
(2) take additional evidence; or
(3) make additional findings of fact or conclusions of law.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.
Sec. 40.060. COMMISSIONER'S ORDER. The commissioner shall serve
on each party a copy of the commissioner's order, including the
commissioner's findings of fact and conclusions of law.
Added by Acts 1999, 76th Leg., ch. 101, Sec. 1, eff. Sept. 1,
1999.