Bill Text: TX HB1890 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to certain contracts between the Texas Windstorm Insurance Association or the Texas Public Finance Authority and a financial advisor or investment banking services provider.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2013-04-16 - Left pending in committee [HB1890 Detail]
Download: Texas-2013-HB1890-Introduced.html
83R8142 TJS-D | ||
By: Stephenson | H.B. No. 1890 |
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relating to certain contracts between the Texas Windstorm Insurance | ||
Association or the Texas Public Finance Authority and a financial | ||
advisor or investment banking services provider. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter M, Chapter 2210, Insurance Code, is | ||
amended by adding Section 2210.622 to read as follows: | ||
Sec. 2210.622. CONTRACT WITH FINANCIAL ADVISOR OR | ||
INVESTMENT BANKING SERVICES PROVIDER. (a) In this section: | ||
(1) "Financial advisor" means a person or business | ||
entity that acts as a financial advisor, financial consultant, | ||
money or investment manager, or securities broker. The term does | ||
not include a person who acts solely as an underwriter or placement | ||
agent with respect to an offering of securities. | ||
(2) "Investment banking services" includes: | ||
(A) participating as a placement agent, | ||
underwriter, arranger, structurer, manager, or book runner in an | ||
offering of securities or other capital markets transaction; | ||
(B) financing or providing capital markets | ||
capacity with respect to a transaction described by Paragraph (A); | ||
(C) acting as counterparty in a financial | ||
transaction, including any debt financing, guarantee arrangement, | ||
bridge loan, structured or securitized financing, risk transfer, or | ||
reinsurance arrangement; and | ||
(D) providing investment appraisal or valuation | ||
services, fairness opinions, contribution-in-kind reports, or | ||
broker-dealer or other investment banking services. | ||
(b) The association and, with respect to an offering of | ||
public securities under this subchapter, the authority may not | ||
contract with a person to: | ||
(1) provide investment banking services to the | ||
association or authority if, on the date the contract is entered | ||
into or during the 12-month period immediately preceding the date | ||
the contract is entered into, the person serves as a financial | ||
advisor to the association or authority; or | ||
(2) serve as a financial advisor or provide investment | ||
banking services to the association or authority if, on the date the | ||
contract is entered into or during the 12-month period immediately | ||
preceding the date the contract is entered into, the person or an | ||
affiliate of the person serves as a financial advisor or provides | ||
investment banking services to a state or federal government | ||
insurance program, pool, fund, or other residual market provider | ||
that would reasonably be expected to incur substantial losses in | ||
the event of any catastrophe that would also reasonably be expected | ||
to cause substantial losses to the association, unless after notice | ||
and public hearing the commissioner determines that: | ||
(A) the contract would not give rise to a | ||
conflict of interests; and | ||
(B) the services already provided or to be | ||
provided under the contract are immaterial to the association or | ||
authority, as applicable, or to the state or federal government | ||
insurance program, pool, fund, or residual market provider, as | ||
applicable. | ||
(c) A contract between the association or, with respect to | ||
an offering of public securities under this subchapter, the | ||
authority and a financial advisor or investment banking services | ||
provider must include a provision that requires the financial | ||
advisor or investment banking services provider, as a condition | ||
subsequent, to promptly and on an ongoing basis disclose in writing | ||
to the association or authority, as applicable, any change in the | ||
contractual relationship between the financial advisor or | ||
investment banking services provider, or an affiliate of the | ||
financial advisor or investment banking services provider, and a | ||
state or federal government insurance program, pool, fund, or other | ||
residual market provider. | ||
SECTION 2. Section 2210.622, Insurance Code, as added by | ||
this Act, applies only to a contract entered into between the Texas | ||
Windstorm Insurance Association or the Texas Public Finance | ||
Authority and a financial advisor or investment banking services | ||
provider on or after the effective date of this Act. A contract | ||
entered into between the Texas Windstorm Insurance Association or | ||
the Texas Public Finance Authority and a financial advisor or | ||
investment banking services provider before the effective date of | ||
this Act is governed by the law in effect on the date the contract is | ||
entered into, and that law is continued in effect for that purpose. | ||
SECTION 3. This Act takes effect September 1, 2013. |