CHAPTER 1903.  LOSS CONTROL INFORMATION AND SERVICES

SUBCHAPTER A.  LOSS CONTROL SERVICES FOR
PROFESSIONAL LIABILITY INSURANCE FOR HOSPITALS

Revised Law

Sec. 1903.001.  DEFINITION.  In this subchapter, "hospital" means a public or private institution licensed under Chapter 241 or 577, Health and Safety Code.  (V.T.I.C. Art. 5.15-2, Sec. (e).)

Source Law

(e)  In this article, "hospital" means a licensed public or private institution as defined in Chapter 241, Health and Safety Code, or in Section 88, Chapter 243, Acts of the 55th Legislature, Regular Session, 1957 (Article 5547-88, Vernon's Texas Civil Statutes).

Revisor's Note

Section (e), V.T.I.C. Article 5.15-2, refers to Section 88, Chapter 243, Acts of the 55th Legislature, Regular Session, 1957 (Article 5547-88, Vernon's Texas Civil Statutes).  Article 5547-88 was codified in 1991 in Chapter 577, Health and Safety Code, which governs the licensing of certain mental health facilities.  The revised law is drafted accordingly.

Revised Law

Sec. 1903.002.  INAPPLICABILITY OF SUBCHAPTER.  This subchapter and Subchapter C do not apply to insurance policies that provide excess coverage issued by the Texas Medical Liability Insurance Underwriting Association under ____ [[[V.T.I.C. Art. 21.49-3]]], or to those policies if the policies are serviced by an insurer acting as a servicing carrier under an agreement entered into between the association and the insurer and approved by the department.  (V.T.I.C. Art. 5.15-2, Sec. (f).)

Source Law

(f)  This article does not apply to insurance policies that provide excess coverage issued by the Texas Medical Liability Insurance Underwriting Association under Article 21.49-3 of this code, and does not apply to those policies if serviced by an insurer acting as a servicing carrier under an agreement entered into between the Texas Medical Liability Insurance Underwriting Association and the insurer and approved by the State Board of Insurance.

Revisor's Note

Section (f), V.T.I.C. Article 5.15-2, refers to the State Board of Insurance.  Chapter 685, Acts of the 73rd Legislature, Regular Session, 1993, abolished the board and transferred its functions to the commissioner of insurance and the Texas Department of Insurance.  Throughout this chapter, references to the board have been changed appropriately.

Revised Law

Sec. 1903.003.  LOSS CONTROL SERVICES REQUIRED.  (a)  Before writing professional liability insurance for a hospital in this state, an insurer must maintain or provide loss control facilities that:

     (1)  provide loss control services reasonably commensurate with the risks, exposures, and experience of the insured's business;

     (2)  are adequate to provide loss control services required by the nature of the policyholder's operations; and

     (3)  include surveys, recommendations, training programs, consultations, and analyses of accident causes.

(b)  To provide the facilities required by this section, the insurer may:

     (1)  employ qualified personnel;

     (2)  retain qualified independent contractors; or

     (3)  contract with the policyholder to provide qualified loss control personnel and services.

(c)  Independent contractors and other personnel described by Subsection (b) must have the qualifications of a field safety representative.  A field safety representative must be an individual who:

     (1)  holds a:

          (A)  bachelor's degree in science or engineering;

          (B)  bachelor of arts degree in nursing;

          (C)  bachelor of science degree in nursing, pharmacy, or physical therapy; or

          (D)  master's degree in hospital administration;

     (2)  is a licensed engineer;

     (3)  is a certified safety professional;

     (4)  is a certified industrial hygienist;

     (5)  has at least 10 years' experience in occupational safety and health; or

     (6)  has completed a course of training in loss control services approved by the department.  (V.T.I.C. Art. 5.15-2, Secs. (a), (b).)

Source Law

Art. 5.15-2.  (a)  Any insurer desiring to write professional liability insurance for hospitals in Texas shall maintain or provide loss control facilities as a prerequisite for writing such insurance.  Such facilities shall be adequate to furnish loss control services required by the nature of its policyholder's operations and shall include surveys, recommendations, training programs, consultations, and analyses of accident causes.  Each field safety representative shall be either a college graduate who shall have a bachelor's degree in science or engineering, a bachelor of arts degree in nursing, a bachelor of science degree in nursing, pharmacy, or physical therapy, or a master's degree in hospital administration, or shall be a registered professional engineer, a certified safety professional, a certified industrial hygienist, an individual with 10 years' experience in occupational safety and health, or an individual who shall have completed a course of training in loss control services approved by the State Board of Insurance.

(b)  The insurer shall render loss control services to its policyholders reasonably commensurate with the risks and exposures and experience of the insured's business.  To provide such facilities, the insurer may employ qualified personnel, retain qualified independent contractors, contract with the policyholder to provide qualified loss control personnel and services, or use a combination of the methods enumerated in this subsection.  Such personnel shall have the qualification required for field safety representatives as provided in Subsection (a) of this article.

Revisor's Note

Section (a), V.T.I.C. Article 5.15-2, refers to a "registered professional engineer."  The revised law substitutes "engineer" for "professional engineer" because "engineer" is the term used by Chapter 1001, Occupations Code, which regulates engineers.  The revised law also substitutes "licensed" for "registered" because that chapter requires that a person hold a license to engage in the practice of engineering.

Revised Law

Sec. 1903.004.  SANCTIONS.  (a)  If there is evidence that reasonable loss control services are not being maintained or provided by an insurer as required by this subchapter or are not being used by the insurer in a reasonable manner to prevent injury to patients of the insurer's policyholders, the commissioner shall order a hearing to determine whether the insurer is not in compliance with this subchapter.

(b)  If it is determined that the insurer is not in compliance, the commissioner may impose any sanction authorized by Chapter 82.  (V.T.I.C. Art. 5.15-2, Sec. (c).)

Source Law

(c)  If the Commissioner of Insurance shall determine that reasonable loss control services are not being maintained or provided by the insurer or are not being used by the insurer in a reasonable manner to prevent injury to patients of its policyholders, the fact shall be reported to the State Board of Insurance, and the board shall order a hearing to determine if the insurer is not in compliance with this article.  If it is determined that the insurer is not in compliance, the board may impose any sanctions authorized by Section 7, Article 1.10, of this code.

Revisor's Note

(1)  Section (c), V.T.I.C. Article 5.15-2, refers to the "Commissioner of Insurance."  The revised law substitutes "commissioner" for "Commissioner of Insurance" because Section 31.001 of this code defines "commissioner" to mean the commissioner of insurance for purposes of this code.

(2)  Section (c), V.T.I.C. Article 5.15-2, requires the commissioner of insurance to report certain facts to the State Board of Insurance.  The revised law omits the requirement as unnecessary because, as explained in the revisor's note to Section 1903.002, the State Board of Insurance was abolished and its functions were transferred to the commissioner and Texas Department of Insurance.  In this context, the function of receiving the report has been transferred to the commissioner, and it is unnecessary to require the commissioner to both make and receive the report.

Revised Law

Sec. 1903.005.  RULES.  The commissioner may adopt reasonable rules for the enforcement of this subchapter after holding a public hearing on the proposed rules.  (V.T.I.C. Art. 5.15-2, Sec. (d).)

Source Law

(d)  The State Board of Insurance may promulgate reasonable rules and regulations for the enforcement of this article after holding a public hearing on the proposed rules and regulations.

Revisor's Note

Section (d), V.T.I.C. Article 5.15-2, refers to "rules and regulations."  The reference to "regulations" is omitted from the revised law because under Section 311.005(5), Government Code (Code Construction Act), a rule is defined to include a regulation.  That definition applies to the revised law.

[Sections 1903.006-1903.050 reserved for expansion]

SUBCHAPTER B.  LOSS CONTROL INFORMATION FOR GENERAL AND CERTAIN PROFESSIONAL LIABILITY INSURANCE

Revised Law

Sec. 1903.051.  LOSS CONTROL INFORMATION REQUIRED.  (a)  Before writing general liability insurance or professional liability insurance, including medical professional liability insurance, for insureds other than hospitals in this state, an insurer must provide to the insurer's policyholders loss control information reasonably commensurate with the risks, exposures, and experience of the insured's business.

(b)  To provide the information described by Subsection (a) or services, the insurer may:

     (1)  employ qualified personnel;

     (2)  retain qualified independent contractors; or

     (3)  contract with the policyholder to provide qualified accident prevention personnel and services.  (V.T.I.C. Art. 5.15-3, Secs. (a), (b).)

Source Law

Art. 5.15-3.  (a)  Any insurer desiring to write professional liability insurance for insureds other than hospitals, general liability insurance, or medical professional liability insurance for insureds other than hospitals in this state must provide loss control information as a prerequisite for writing that insurance.

(b)  The insurer shall provide loss control information to its policyholders reasonably commensurate with the risks and exposures and experience of the insured's business.  To provide this information or services, the insurer may employ qualified personnel, retain qualified independent contractors, contract with the policyholder to provide qualified accident prevention personnel and services, or use a combination of the methods provided by this article.

Revised Law

Sec. 1903.052.  SANCTIONS.  (a)  If there is evidence that reasonable loss control information is not being provided by an insurer as required by this subchapter or is not being used by the insurer in a reasonable manner to reduce losses, the commissioner shall order a hearing to determine whether the insurer is not in compliance with this subchapter.

(b)  If it is determined that the insurer is not in compliance, the commissioner may impose any sanction authorized by Chapter 82.  (V.T.I.C. Art. 5.15-3, Sec. (c).)

Source Law

(c)  If there is evidence that reasonable loss control information is not being provided by the insurer or is not being used by the insurer in a reasonable manner to reduce losses, the State Board of Insurance shall order a hearing to determine if the insurer is not in compliance with this article.  If it is determined that the insurer is not in compliance, the board may impose any of the sanctions authorized by Section 7, Article 1.10, of this code.

Revised Law

Sec. 1903.053.  RULES.  After opportunity for a hearing, the commissioner may adopt reasonable rules for the enforcement of this subchapter.  (V.T.I.C. Art. 5.15-3, Sec. (d).)

Source Law

(d)  After opportunity for a hearing, the State Board of Insurance may promulgate reasonable rules and regulations for the enforcement of this article.

Revisor's Note

Section (d), V.T.I.C. Article 5.15-3, refers to "rules and regulations."  The reference to "regulations" is omitted from the revised law for the reason stated in the revisor's note to Section 1903.005.

[Sections 1903.054-1903.100 reserved for expansion]

SUBCHAPTER C.  CIVIL PROCEEDINGS

Revised Law

Sec. 1903.101.  IMMUNITY FROM LIABILITY.  (a)  An insurer or an agent or employee of the insurer is not liable, and a cause of action does not arise against the insurer, agent, or employee, for an accident based on an allegation that the accident was caused or could have been prevented by a program, information, inspection, or other activity or service undertaken by the insurer to prevent accidents or to control losses, as applicable, in connection with the operations of the insured.

(b)  The immunity from liability provided by this section does not affect the liability of an insurer as otherwise provided in an insurance policy.  (V.T.I.C. Art. 5.15-2, Sec. (g); Art. 5.15-3, Sec. (e).)

Source Law

[Art. 5.15-2]

(g)  An insurer, its agents, servants, or employees are not liable for and no cause of action arises with respect to any accident based on the allegation that the accident was caused or could have been prevented by a program, inspection, or other activity or service undertaken by the insurer for the prevention of accidents in connection with operations of its insured.  However, this immunity does not affect the liability of an insurer as otherwise provided in a policy of insurance.

[Art. 5.15-3]

(e)  An insurer, its agents, servants, or employees are not liable and no cause of action arises with respect to any accident based on the allegation that the accident was caused or could have been prevented by a program, information, inspection, or other activity or service undertaken by the insurer for the prevention of accidents or control of losses in connection with operations of its insured.  However, this immunity does not affect the liability of an insurer otherwise provided by a policy of insurance.

Revisor's Note

Section (g), V.T.I.C. Article 5.15-2, and Section (e), V.T.I.C. Article 5.15-3, refer to an insurer's "agents, servants, or employees."  The revised law omits "servants" because the term is included within the meaning of "agents … or employees."

Revised Law

Sec. 1903.102.  LOSS CONTROL INFORMATION NOT DISCOVERABLE OR ADMISSIBLE.  Loss control information provided by an insurer to an insured is not discoverable or admissible as evidence in a civil proceeding.  (V.T.I.C. Art. 5.15-2, Sec. (h); Art. 5.15-3, Sec. (f).)

Source Law

[Art. 5.15-2]

(h)  Loss control information provided by an insurer to an insured is not discoverable or admissible in any civil proceeding as evidence.

[Art. 5.15-3]

(f)  Any loss control information provided by an insurer to an insured is not subject to discovery or admissible in any civil proceeding as evidence.