SECTION 5.1713. Evaluation and Inspection of Loss Control Facilities and Services

At least every two years, the State Board of Insurance will conduct an evaluation of the loss control facilities and services of each insurer writing professional liability insurance for hospitals in the State of Texas.

(1) Location of evaluations. Evaluations will be conducted at the insurer's home office, division office, regional office, or office closest to Austin, unless otherwise arranged through mutual consent between the director of loss control regulation for the State Board of Insurance and a representative of the insurer. Companies out of state with no office in Texas will be required to bring necessary files to Austin. The insurer shall bring all account files selected by the director of loss control regulation from all company offices to the selected evaluation location. All affiliated companies of an insurer shall be evaluated at the same time and place.

(2) Notification and preparation. Notification and preparation for evaluations shall occur in accordance with subparagraphs (A)-(F) of this paragraph.

(A) Notice of date of evaluation. The director of loss control regulation will notify each company of a proposed date 60 days in advance of the evaluation for that company.

(B) List of policyholder accounts. At least 45 days prior to the date set for the evaluation, the insurer must provide the director of loss control regulation with a list of policyholder accounts, by premium, based on the individual company's most current data processing records or other comparable records if data processing records are not available. The list must be separated by affiliated insurance companies and include the name, location, and policy number of each insured and must be arranged in order of descending premium. The Insurance Code, Article 5.15-2(h), provides that loss control information provided by an insurer to an insured is not discoverable or admissible in any civil proceeding as evidence. Such information, when provided to this agency under these rules, shall be deemed confidential and proprietary information, and shall be restricted to State Board of Insurance personnel.

(C) Notice of accounts to be evaluated. Upon receipt of this list, the director of loss control regulation or a State Board of Insurance inspector will select those accounts to be evaluated, notify the company, and specify each account for which an evaluation worksheet must be prepared by the company. At that time, the director shall return such list to the company with instructions on completing the required evaluation worksheets. Worksheet forms will be provided to the company at the time the accounts to be evaluated are identified.

(D) Information required. The company will have at least 30 days from the time notification is received to complete the worksheets. Information on the worksheet may include, but is not limited to, the following:

(i) identification of account and location;

(ii) type of hospital (government, proprietary, etc.); number of employees;

(iii) estimated annual premium;

(iv) description of operations and services provided;

(v) date of last visit or direct communications;

(vi) types of patient care services provided;

(vii) number of physicians;

(viii) loss occurrence data;

(ix) loss potential of risk;

(x) loss ratio;

(xi) recommendations submitted for loss control;

(xii) training program information;

(xiii) number of beds; and

(xiv) number of patient visits (inpatient and outpatient).

(E) Availability of information. The insurer must make the completed worksheets available to the inspector at least five working days in advance of the inspection. At the time of the evaluation, the account files and other data deemed necessary shall be available to verify evaluation worksheets prepared by the insurer.

(F) Possible visit by inspector. If considered necessary, the inspector may visit a hospital to make further evaluation of the loss control services provided. If requested by the inspector, the representative of the insurer shall make the necessary notifications and arrangements and shall be afforded the opportunity to accompany the inspector. If the director of loss control regulation for the State Board of Insurance considers it appropriate, the inspector will make the visit without notifying the insurer.

(3) Conduct of the evaluation. The inspector will work with a responsible management member or a designated representative in the evaluation of the adequacy of the loss control services provided to policyholders. The evaluation will be conducted in two parts. Part one will consist of the review and analysis of company records and a determination of how loss control services are made available to policyholders and the adequacy of those services. Part two will consist of an exit briefing on the preliminary results of the evaluation, and provide an opportunity for discussion.

(4) Records and procedures to be reviewed. Records and procedures which the insurer must make available for review and evaluation are listed in subparagraphs (A)-(F) of this paragraph.

(A) Qualifications of field safety representatives. The insurer shall make available, prior to the beginning of the evaluation, a list of company and/or contract personnel performing the duties of a field safety representative. The list must include the name, location, designation as employee or contractor, and certificate number assigned by the State Board of Insurance.

(B) Availability of services. The insurer shall make available examples of procedures by which policyholders are informed of the availability of loss control services. Also to be reviewed are the procedures followed by the company regarding requests for loss control services by insureds.

(C) Loss control facilities. The inspector will review the adequacy of facilities available to render loss control services required pursuant to §5.1711 of this title (relating to Methods of Providing Loss Control Facilities).

(D) Loss control services. The inspector will review the mechanisms and procedures by which the appropriate loss control service is determined under the guidelines outlined in §5.1712 of this title (relating to Loss Control Services). The insurer shall maintain a record of all loss control services rendered to each policyholder.

(E) Worksheets and policyholder files. A detailed review of completed worksheets and information from selected policyholder files will be made to ascertain the adequacy and quality of loss control services.

(F) Other data. The inspector may review other data or information in the evaluation of the adequacy of loss control services. Such information may include, but is not limited to, claims notification procedures, loss investigation and analysis, examples of cost savings for policyholders as a result of loss prevention practices, and follow-up efforts on recommendations made to policyholders.

(5) Loss control reports. Upon completion of the inspection, the inspector will prepare a written report and forward the report to upper level management of the company. The report will reflect the inspector's observations, conclusions, and analyses of the adequacy of the company's loss control services as required by the Insurance Code, Article 5.15-2. When appropriate, recommendations for improvement will be a part of the report.

Source Note: The provisions of this §5.1713 adopted to be effective November 9, 1990, 15 TexReg 6191.