Bill Text: TX SB2272 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to the operation of the Texas Property and Casualty Insurance Guaranty Association.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-22 - Referred to Business & Commerce [SB2272 Detail]

Download: Texas-2023-SB2272-Introduced.html

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88R13696 RDS-F
By: Hughes S.B. No. 2272

A BILL TO BE ENTITLED
AN ACT
relating to the operation of the Texas Property and Casualty
Insurance Guaranty Association.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 462.007(b), Insurance Code, is amended
to read as follows:
(b) Except as provided by Subchapter F, this chapter does
not apply to:
(1) life, annuity, health, or disability insurance;
(2) mortgage guaranty, financial guaranty, or other
kinds of insurance offering protection against investment risks;
(3) a fidelity or surety bond, or any other bonding
obligation;
(4) credit insurance, guaranteed asset protection
insurance protecting a lender's or borrower's interest if the
amount owed on an asset exceeds the asset's value, vendors'
single-interest insurance, collateral protection insurance, or
similar insurance protecting a creditor's interest arising out of a
creditor-debtor transaction;
(5) insurance of warranties or service contracts;
(6) title insurance;
(7) ocean marine insurance;
(8) a transaction or combination of transactions
between a person, including an affiliate of the person, and an
insurer, including an affiliate of the insurer, that involves the
transfer of investment or credit risk unaccompanied by the transfer
of insurance risk, including transactions, except for workers'
compensation insurance, involving captive insurers, policies in
which deductible or self-insured retention is substantially equal
in amount to the limit of the liability under the policy, and
transactions in which the insured retains a substantial portion of
the risk; or
(9) insurance provided by or guaranteed by government.
SECTION 2. Section 462.054, Insurance Code, is amended to
read as follows:
Sec. 462.054. ELIGIBILITY TO SERVE AS INDUSTRY
REPRESENTATIVE. To be eligible to serve as an insurance industry
board member, an individual must be an officer or a full-time
employee of a member insurer.
SECTION 3. Section 462.056, Insurance Code, is amended to
read as follows:
Sec. 462.056. REIMBURSEMENT OF BOARD MEMBERS; COMPENSATION
TO PUBLIC REPRESENTATIVES. (a) A board member may be reimbursed
from the assets of the association for expenses the board member
incurs as a board member.
(b) A board member who is a public representative may
receive compensation in an amount not to exceed $250 for each day
the public representative attends a regular or special meeting of
the board.
SECTION 4. Section 462.059, Insurance Code, is amended to
read as follows:
Sec. 462.059. MEETING BY TELEPHONE CONFERENCE CALL OR
VIDEOCONFERENCE. (a) Notwithstanding Chapter 551, Government
Code, or any other law, the board may hold a [an open] meeting by
telephone conference call, videoconference, or other similar
telecommunication method. The board may use any method authorized
by this subsection to establish a quorum, vote, or conduct any other
meeting purpose in accordance with this section regardless of the
subject matter discussed or considered by the board at the meeting.
[A meeting held by telephone conference call:
[(1) must be audible to the public at the location
specified in the notice described by Subsection (c); and
[(2) must allow two-way audio communication during the
entire meeting between the members of the board attending a meeting
authorized by this section.
[(a-1) If the two-way audio communication required under
Subsection (a) is disrupted during a meeting so that a quorum of the
board is no longer able to participate, the meeting may not continue
until the two-way audio communication is reestablished.]
(b) A [The] meeting authorized by this section is subject to
the notice requirements that apply to other meetings of the board of
directors.
(c) The notice of a [the] meeting authorized by this section
must specify the location of the meeting.
(d) Each [, and each] part of a [the] meeting that is
required to be open to the public must be audible to the public at
the [that] location specified by Subsection (c).
(e) Two-way audio communication must be available during
the entire meeting between all members of the board attending a
meeting authorized by this section. If the two-way audio
communication is disrupted so that a quorum of the board is no
longer participating in the meeting, the meeting may not continue
until the two-way audio communication is reestablished.
(f) The association must make an audio recording of the
meeting, if held by telephone conference call, or a digital
recording of the meeting, if held by videoconference or other
similar telecommunication method. The recording of the open
portion of the meeting must be posted publicly to the association's
Internet website.
SECTION 5. Section 462.105, Insurance Code, is amended to
read as follows:
Sec. 462.105. ACCOUNTS. For purposes of administration and
assessment, the association shall maintain the following accounts
[is divided into]:
(1) the workers' compensation insurance account;
(2) the automobile insurance account; [and]
(3) the account for all other lines of insurance to
which this chapter applies; and
(4) the administrative account.
SECTION 6. Section 462.106, Insurance Code, is amended to
read as follows:
Sec. 462.106. ADMINISTRATION OF ACCOUNTS [ADMINISTRATIVE
EXPENSES]. (a) The association shall [may] use money in the
administrative account to pay administrative costs and other
general overhead expenses of the association.
(b) The association may transfer income from investment of
the association's money to the administrative account.
(c) The association shall use money from the corresponding
line of insurance business account described by Section 462.105 to
pay any covered claims for that line of insurance and related claims
adjustment expenses charged by a third party for that line of
insurance.
(d) The board may authorize borrowing between accounts if:
(1) the indebted account is obligated to pay interest
at a rate that will reasonably compensate the lending account for
any lost earnings; and
(2) the indebted account is reasonably expected to
have sufficient money to repay the lending account, with interest,
before the lending account needs the money to pay obligations for
which the lending account is used. [On notification by the
association of the amount of any additional money needed for the
administrative account, the association shall assess member
insurers in the manner provided by Sections 462.159-462.168 for
that money. The commissioner shall consider the net direct written
premiums collected in this state for all lines of business covered
by this chapter. An assessment for administrative expenses
incurred by a supervisor or conservator appointed by the
commissioner or a court-appointed receiver for a nonmember of the
association or unauthorized insurer operating in this state may not
exceed $1 million each calendar year.]
SECTION 7. Section 462.163, Insurance Code, is amended to
read as follows:
Sec. 462.163. PAYMENT OF ASSESSMENT; INTEREST. An insurer
shall pay the amount of an assessment under Section 462.160 or
462.162(b) to the association not later than the 30th day after the
date the association gives notice of the assessment. Interest
accrues on an unpaid amount at a rate of 10 percent a year beginning
on the date the payment is due.
SECTION 8. Section 462.057, Insurance Code, is repealed.
SECTION 9. Section 462.163, Insurance Code, as amended by
this Act, applies only to an assessment that becomes due on or after
the effective date of this Act. An assessment that becomes due
before the effective date of this Act is governed by the law as it
existed immediately before the effective date of this Act, and that
law is continued in effect for that purpose.
SECTION 10. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2023.