Section 1.90 - Joint Memorandum of Understanding (MOU) between Texas Department of Insurance (TDI) and State Office of Administrative Hearings (SOAH) Concerning Procedures for Contested Cases before SOAH and Responsibilities of Each Agency(a) General statement. (1) The Insurance Code, Article 1.33B, added by Chapter 685, §2.01, 73rd Legislature, 1993, mandates the commissioner of TDI and the chief administrative law judge of SOAH to adopt by rule a joint MOU governing hearings held by SOAH under the Insurance Code and other insurance laws of this state. The statute provides that the MOU shall require the chief administrative law judge and the commissioner of insurance to cooperate in conducting hearings subject to its provisions. Article 1.33B requires that an SOAH administrative law judge (ALJ) conduct any contested case hearing required or permitted to be held before a decision may be rendered or action taken by the commissioner or TDI, including, but not limited to, hearings relating to the approval or review of rates or rating manuals filed by individual companies, rate proceedings which include the benchmark rate hearings, and other annual rate hearings. However, no later than September 1, 1994, or as long as the board retains jurisdiction of proceedings involving promulgation and approval of rates; promulgation and approval of policy forms and policy form endorsements; and hearings, proceedings, and rules related to the referenced activities, the proceedings that are held before or pending on January 1, 1994, shall be heard by the board or the board's designee.(2) The MOU is necessary to accomplish the efficient and expeditious hearing of matters under the jurisdiction of TDI by establishing the procedures to be used by each agency and clearly delineating each agency's responsibilities. Additionally, the MOU is necessary to inform the public of each agency's responsibilities and the procedures for the institution, conduct, and determination of proceedings before SOAH on behalf of TDI.(3) The MOU provides procedures for referring the case to SOAH, the notice of hearing, filing requirements, hearings, final orders, motions for rehearing, and custody of the hearing record.(b) Definitions. The following meanings apply to this section unless expressly stated otherwise.(1) Contested case means a proceeding, including but not restricted to ratemaking and licensing, in which the legal rights, duties, or privileges of a party are to be determined by an agency after an opportunity for adjudicative hearing as defined in the Government Code, § 2001.003.(2) Motion for reconsideration means a motion filed with the commissioner by any insurance company or other party at interest, if dissatisfied with any ruling, action, decision, regulation, order, rate, rule, form, act, or administrative ruling by TDI staff adopted by the commissioner.(3) Summary procedures means a set of procedures created by TDI for handling specifically designated routine matters, although such matters would otherwise be subject to the Administrative Procedure Act, the Government Code, Chapter 2001. The procedures are published in §§ 1.701-1.705 of this title (relating to Summary Procedures for Routine Matters).(4) Interim order means an order by an ALJ which decides discovery and prehearing matters, including, but not limited to, matters concerning motions, evidence, or testimony, but which is not a final decision disposing of the whole case.(c) Referral of contested case to SOAH. (1) Referral of a contested case to SOAH may be made only by TDI. The referral is initiated by filing with SOAH either a request for setting of hearing form or a request for assignment of ALJ form as provided in subparagraphs (A) and (B) of this paragraph. In addition to filing the appropriate form, a referral also consists of items listed in subparagraphs (C)-(E) of this paragraph:(A) the request for setting of hearing form shall be filed when TDI seeks to have the case set for hearing and no prehearing matters requiring resolution by an ALJ are anticipated. If prehearing matters arise after the request for setting of hearing form is filed, SOAH shall assign an ALJ to resolve the matter;(B) the request for assignment of ALJ form shall be filed when TDI anticipates the need for one or more prehearing conferences and/or the need for an ALJ's ruling on various matters prior to commencement of the hearing. If no request for setting of a hearing is included in the request for assignment of an ALJ, the date for the hearing shall be determined by the assigned ALJ;(C) all pleadings in the case, including, but not limited to, complaints, petitions, applications, motions, or such other documents describing agency action relating to the contested case;(D) an accurate service list; and(E) notification of any statutory deadlines involving the contested case.(2) Following receipt of the request for assignment of ALJ form, SOAH shall assign the case a docket number, assign an ALJ, and notify all parties in writing of the ALJ assigned to the case. If TDI also requests a hearing date, then SOAH shall provide a date and a confirmation of the setting to TDI. Following receipt of the confirmation of the setting of the hearing, TDI shall send its notice of hearing.(3) TDI should file a request for setting of hearing within 24 hours of receipt of a request by any party for an expedited hearing in TDI referrals requiring expedited action such as supervision and conservation of insurers; emergency cease and desist proceedings; hearings required to be held before the statute of limitations runs; hearings required to be held in order to retain jurisdiction; and hearings involving a request for stay pending the determination of the case. In cases requiring an expedited hearing, SOAH should confirm with TDI a hearing date and docket number within 24 hours of such request.(4) Any insurance company or other party at interest, if dissatisfied with any ruling, action, decision, regulation, order, rate, rule, form, act, or administrative ruling by TDI staff adopted by the commissioner, may file a motion for reconsideration with the TDI docket clerk. The TDI docket clerk shall forward the motion for reconsideration to the commissioner for a determination. If the motion is granted, the motion becomes the initial pleading and TDI shall initiate the contested case by filing either a request for setting of hearing form or a request for assignment of ALJ form. However, if the ruling concerns rulemaking proposals or other matters not subject to a contested case, including rulings relating to a regulation, rule, or form, the motion for reconsideration will not be forwarded to SOAH, but shall be handled by the commissioner in an appropriate manner consistent with the type of case.(d) Notice of hearing.(1) Upon receipt of the docket number, location, and setting date from SOAH, TDI shall issue the notice of hearing as required by the Insurance Code and the Government Code, and will serve the notice of hearing by certified mail, return receipt requested, to all parties to the docketed matter. An administrative law judge may issue notice of date, time, and place for hearings.(2) Notice is governed by the Government Code, § 2001.051 and § 2001.052, unless alternative procedures are permitted by law. The notice shall include the time, place, and nature of the hearing; a statement of the legal authority and jurisdiction under which the hearing is to be held; a reference to the particular sections of the statutes and any corresponding regulations to which the hearing relates; a short, plain statement of the matters asserted; the docket number; and a certificate of service.(e) Filing requirements. Filing of documents shall be made in accordance with the following. (1) Any party filing notices of hearing, staff memoranda, and pleadings (including discovery), motions and such other filings except motions for reconsideration, motions for review of summary procedures, motions for rehearing and appeals of interim orders, shall file the original with SOAH.(2) All motions, except motions for rehearing, motions for reconsideration, motions for review of summary procedures and appeals of interim orders, shall be addressed to SOAH.(3) All motions for rehearing, motions for review of summary procedures, motions for reconsideration, and appeal of interim orders seeking action to be taken by the commissioner of insurance shall be addressed to the commissioner and shall be filed with the TDI docket clerk. A true and correct copy of all motions for rehearing and appeals of interim orders shall be filed with SOAH on the same date and by the same method as filed with TDI.(4) Any ruling or prehearing order concerning a delay, continuance, or future filing shall be forwarded to the TDI docket clerk on the same date and by the same method as forwarded to other parties.(f) Hearings. (1) Hearings, including prehearing proceedings on contested cases, shall be conducted in accordance with the Government Code, Chapter 2001, the Insurance Code, the TDI rules of procedure, and the SOAH rules of procedure; any other applicable law and accompanying regulations.(2) In the event of any conflict between the SOAH rules of procedure and the TDI rules of procedure, the rules of TDI control, unless otherwise specifically stated in the SOAH rules of procedure (see 1 TAC § 155.5). In the event of any conflict between the procedures in the Insurance Code, Article 1.33(B)(c), and either the SOAH rules of procedure or the TDI rules of procedure, the procedures in the Insurance Code, Article 1.33B(c), control in rate promulgation proceedings.(3) Any party may appeal any interim order issued by the ALJ to the commissioner. An order entered by the commissioner on any appeal of an interim order is binding upon the parties and the ALJ subject to the right of an aggrieved person to seek judicial relief.(4) The ALJ shall establish reasonable deadlines and procedures for the filing of affidavits, the designation of witnesses, and such other matters as are necessary or appropriate.(5) The respondent in any non-rate promulgation or non-rate approval proceeding shall file a written response with the ALJ in accordance with § 1.88 of this title (relating to Written Response to Notice of Hearing) and the SOAH rules of procedure.(6) If the commissioner or the commissioner's designee informally disposes of a contested case by stipulation, agreed settlement, consent order, agreed order or default as provided in the Insurance Code, Article 1.10(7)(d), and the Government Code, § 2001.056, the appropriate party or parties shall file a request to withdraw the case from the SOAH docket and include a copy of the order. SOAH shall then issue an order withdrawing the case from the SOAH docket.(7) In non-rate promulgation proceedings where the parties stipulate that there are no issues in dispute, and a hearing is required by statute, the ALJ shall convene the hearing, allow the parties to present evidence and stipulate to the facts, recess the hearing, and allow the parties to present an agreed order to the commissioner.(8) TDI shall provide court reporting services for all hearings held by SOAH.(g) Final orders. (1) The ALJ shall prepare and issue the proposal for decision and a proposed order. Legal citations in the proposed order shall be made in accordance with the Texas Rules of Form. The proposal for decision shall include proposed findings of fact and conclusions of law. The commissioner may not attempt to influence the ALJ's findings of fact, conclusions of law, or the ALJ's application of the law to the facts in any proceedings. Unless otherwise provided by statute, or ordered by the commissioner prior to the referral of the case, the ALJ shall issue a proposal for decision and proposed order no later than the 60th day after the date the record is finally closed.(2) The ALJ shall submit the proposal for decision and the proposed order to the commissioner and shall serve true and correct copies of the proposal for decision and the proposed order by registered mail upon the parties. By transmittal letter, the ALJ shall establish deadlines and give each party the opportunity to file exceptions to the proposal and order, briefs and reply briefs related to the issues addressed in the proposal for decision and proposed order. The deadlines shall be in accordance with TDI's rules of procedures and applicable policies.(3) The ALJ may amend the proposal for decision and proposed order pursuant to exceptions, briefs, and reply briefs without the proposal for decision and proposed order again being served on the parties. The ALJ shall promptly provide a copy of any amended proposals for decision and proposed orders to the commissioner and all parties.(4) The commissioner may consider the proposal for decision and proposed order prepared by the ALJ, the exceptions, briefs, reply briefs, and the arguments of the parties entirely upon written submission or in a public meeting. If considered in a public meeting, then the notice will be published in the Texas Register. At the request of the commissioner, the ALJ shall be available to present the proposal for decision and proposed order either at the open meeting or in such other forum where all parties are provided an opportunity to participate. However, the commissioner shall consider proposals for decisions and rate orders relating to rate promulgation proceedings at an open meeting.(5) The commissioner may amend the proposal for decision or the proposed order, including any finding of fact or conclusion of law. In non-rate promulgation proceedings, the commissioner may amend the proposal for decision or order only for policy reasons stating the reason and legal basis in writing. However, in rate promulgation proceedings, any commissioner amendment to the proposed order shall be accompanied by an explanation of the basis for the amendment. The commissioner's order promulgating the rate, including any amendment thereto, shall be based solely upon the record made before the ALJ.(6) If the commissioner seeks clarification or additional information relating to the proposed order, the commissioner may send written questions, including a request to reopen the hearing if necessary to the ALJ with copies to all parties of record. If the information necessary to respond to the commissioner's questions is not already in evidence, the ALJ shall treat the commissioner's request as a "remand" of the case for further hearing and shall notify all parties of record of the remand.(7) Upon the commissioner's issuance of any order that may become final under the Government Code, § 2001.144, TDI's docket clerk shall send a copy of the order by certified mail, return receipt requested, pursuant to the Insurance Code, Article 1.10B, and by first-class mail, pursuant to the Government Code, § 2001.142, to the parties or their representatives, and to SOAH. TDI's docket clerk shall keep an appropriate record of the mailing.(h) Motions for rehearing. The commissioner may state in a written order or on the record the decision as to a motion for rehearing, or may allow the motion for rehearing to be overruled by operation of law and take no action. When a motion for rehearing is granted and if the commissioner remands for further proceedings, the ALJ, upon notice to all parties of record, shall convene the rehearing under the same docket as the original hearing.(i) Custody of the hearing record.(1) SOAH shall maintain the official record in a contested case from the time TDI refers the case to SOAH until the occurrence of the events in either subparagraph (A) or (B) of this paragraph, as follows:(A) the entry of an order by an ALJ to withdraw or dismiss a case from the SOAH docket either by the granting of a party's motion or on the ALJ's own motion; or(B) the close of the tenth day following the expiration of the deadline for filing replies to exceptions to the ALJ's proposal for decision.(2) Prior to the occurrence of the event in either paragraph (1)(A) or (B) of this subsection, any request for a copy of any portion or all of the record shall be directed to SOAH. Requests for official copies shall be directed to SOAH as the official custodian authorized to certify as to the completeness of the record before the conclusion of the administrative hearing process. No charge will be made for any certifications of the record or for audio copies of the hearing record when the blank tape cassettes are provided by the requester.(3) After the occurrence of the events in either paragraph (1)(A) or (B) of this subsection, the duty of official custodian of the record shall be transferred to TDI. SOAH shall deliver the official record to TDI along with a certified statement that the documents delivered constitute the complete record in the case. Any request for a copy of any portion or all of the record shall then be directed to TDI, as the official custodian authorized to certify as to the completeness of the record. No charge will be made for any certifications of the record or for audio copies of the hearing record when the blank tape cassettes are provided by the requester. In the event a contested case is remanded by the Commissioner to the ALJ, the record shall be transferred back to SOAH with the Commissioner's order remanding the case. The record shall then be maintained and subsequently transferred under the terms of this subsection, as if it were a case of original referral to the SOAH.28 Tex. Admin. Code § 1.90
The provisions of this §1.90 adopted to be effective December 30, 1993, 18 TexReg 9755; amended to be effective January 6, 1995, 19 TexReg 10237; amended to be effective May 23, 1996, 21 TexReg 4226.