H.B. No. 4338
AN ACT
relating to title insurance agents and title insurance companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2501.004(b), Insurance Code, is amended
to read as follows:
(b) To provide for the safety and protection of
policyholders, the department shall require that an abstract plant
[be]:
(1) be geographically arranged;
(2) cover a period beginning not later than January 1,
1979, and be kept current; and
(3) be adequate for use in insuring titles, as
determined by the department.
SECTION 2. Section 2602.002(a), Insurance Code, is amended
to read as follows:
(a) This chapter is for:
(1) the purposes and findings stated in Sections
441.001, 441.003, 441.005, and 441.006; [and]
(2) the protection of holders of covered claims; and
(3) the protection of consumers served by impaired
agents.
SECTION 3. Sections 2602.003(5) and (6), Insurance Code,
are amended to read as follows:
(5) "Impaired agent" means a title [an] agent or
direct operation that is[:
[(A) placed in:
[(i) temporary or permanent receivership
under a court order based on a finding of insolvency; or
[(ii) conservatorship after the
commissioner determines that the agent is insolvent; and
[(B)] designated by the commissioner as an
impaired agent and is:
(A) placed by a court in this state or another
state under an order of supervision, conservatorship,
rehabilitation, or liquidation;
(B) placed under an order of supervision or
conservatorship under Chapter 441;
(C) placed under an order of rehabilitation or
liquidation under Chapter 443; or
(D) otherwise found by a court of competent
jurisdiction to be insolvent or otherwise unable to pay obligations
as they come due.
(6) "Impaired title insurance company" means a title
insurance company that is[:
[(A) placed in:
[(i) temporary or permanent receivership
under a court order based on a finding of insolvency; or
[(ii) conservatorship after the
commissioner determines that the company is insolvent; and
[(B)] designated by the commissioner as an
impaired title insurance company and is:
(A) placed by a court in this state or another
state under an order of supervision, conservatorship,
rehabilitation, or liquidation;
(B) placed under an order of supervision or
conservatorship under Chapter 441;
(C) placed under an order of rehabilitation or
liquidation under Chapter 443; or
(D) otherwise found by a court of competent
jurisdiction to be insolvent or otherwise unable to pay obligations
as they come due.
SECTION 4. Section 2602.011(a), Insurance Code, is amended
to read as follows:
(a) The commissioner shall notify the association of the
existence of an impaired title insurance company or impaired agent
not later than the third day after the date on which the
commissioner gives notice of the designation of impairment to the
impaired agent or impaired title insurance company. The
association is entitled to a copy of any complaint seeking an order
of receivership with a finding of insolvency against a title
insurance company at the time the complaint is filed with a court.
SECTION 5. Section 2602.107, Insurance Code, is amended by
adding Subsection (d) to read as follows:
(d) The association shall pay from the guaranty fee account
fees and reasonable and necessary expenses that the department
incurs in an examination or audit of a title agent or direct
operation under this chapter and Chapter 2651.
SECTION 6. Section 2602.110, Insurance Code, is amended to
read as follows:
Sec. 2602.110. EXPENSES OF ADMINISTERING IMPAIRED INSURER
OR IMPAIRED AGENT [RECEIVERSHIP OR CONSERVATORSHIP]. The
association may advance money necessary to pay the expenses of
administering the supervision, rehabilitation, receivership, [or]
conservatorship, or, as determined by a court of competent
jurisdiction, other insolvency [estate] of an impaired title
insurance company or impaired agent, on terms the association
negotiates, if the company's or agent's assets are insufficient to
pay those expenses.
SECTION 7. Section 2602.152, Insurance Code, is amended to
read as follows:
Sec. 2602.152. AMOUNT OF FEE. Annually or more frequently,
the board shall determine the amount of the guaranty fee[, not to
exceed $5], considering the amount of money to be maintained in the
guaranty fee account that is reasonably necessary for efficient
future operation under this chapter.
SECTION 8. Sections 2602.153(b) and (d), Insurance Code,
are amended to read as follows:
(b) The following [covered] claims shall be paid from
guaranty fees only and may not be paid from assessments:
(1) covered claims against trust funds or an escrow
account of an impaired agent under Section 2602.252; [and]
(2) expenses incurred in complying with Subchapter J;
(3) conservator and receiver expenses under Section
2602.254; and
(4) administrative expenses with respect to the estate
of an impaired agent under Section 2602.110.
(d) Guaranty fees may be used only for payment of:
(1) [covered] claims described by Subsection (b) [or
(c)]; and
(2) expenses related to:
(A) an audit or an examination conducted by the
department or the association under this chapter;
(B) the supervision and coordination of such an
audit or examination; and
(C) an action under Section 2602.452 [and review
expenses under Section 2602.103(b)].
SECTION 9. Sections 2602.401(a) and (b), Insurance Code,
are amended to read as follows:
(a) If an assessment has been made under this chapter for an
impaired title insurance company or association funds have been
provided for the company, the company, on release from the
supervision, rehabilitation, conservatorship, [or] receivership,
or other proceeding in which the company was found by a court of
competent jurisdiction to be insolvent or otherwise unable to pay
obligations as they come due, may not issue a new or renewal
insurance policy until the company:
(1) has repaid pro rata in full to each holder of a
participation receipt the assessment amount paid by the receipt
holder or its assignee; and
(2) has repaid in full the amount of guaranty fees paid
by the association.
(b) If an assessment has been made under this chapter for an
impaired agent or guaranty fees have been provided for the impaired
agent, the agent, on release from the supervision, conservatorship,
rehabilitation, [or] receivership, or other proceeding in which the
agent was found by a court of competent jurisdiction to be insolvent
or otherwise unable to pay obligations as they come due, subject to
dischargeability, may not act as an agent [issue a new or renewal
insurance policy] until the agent has repaid in full the amount of
guaranty fees paid by the association.
SECTION 10. Chapter 2602, Insurance Code, is amended by
adding Subchapter J to read as follows:
SUBCHAPTER J. ADDITIONAL DUTIES OF ASSOCIATION
Sec. 2602.451. APPLICABILITY. This subchapter applies, at
the commissioner's discretion and regardless of whether there are
covered claims against an agent, to any agent that is designated by
the commissioner as an impaired agent.
Sec. 2602.452. ACTIONS FOR CERTAIN AGENTS. (a) The
commissioner may direct the association, at the association's
expense and on behalf of an impaired agent, to:
(1) close real estate transactions;
(2) disburse escrow funds;
(3) record documents; and
(4) issue final title insurance policies.
(b) The association may employ or retain a person in
accordance with Section 2602.103(a).
Sec. 2602.453. AUTHORITY OF ASSOCIATION; COOPERATION OF
OFFICERS, OWNERS, AND EMPLOYEES. (a) On the direction of the
commissioner under Section 2602.452, the association may implement
any direction made by the commissioner and may access all books,
records, accounts, networks, and electronic document storage and
management systems as necessary to implement the commissioner's
direction.
(b) Any present or former officer, manager, director,
trustee, owner, employee, or agent of the agent, or any other person
with authority over or in charge of any segment of the agent's
affairs, shall cooperate with the association. For purposes of
this subsection:
(1) "Person" includes a person who exercised or
exercises control directly or indirectly over activities of the
agent through a holding company or other affiliate of the agent.
(2) "Cooperate" means:
(A) replying promptly in writing to any request
for information from the association within the period established
in the request; and
(B) making available to the association any
books, accounts, documents, or other records or information of, or
relating to, the agent within the period set in the request.
(c) A person who fails to cooperate as required under
Subsection (b) is subject to sanctions under Chapter 82, in
addition to all other sanctions available under law.
SECTION 11. Section 2651.002, Insurance Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The completed application must state that:
(1) the proposed agent is:
(A) an individual who is a bona fide resident of
this state;
(B) an association or firm composed only of Texas
residents; or
(C) a Texas corporation or a foreign corporation
authorized to engage in business in this state;
(2) the proposed agent has unencumbered assets in
excess of liabilities, exclusive of the value of abstract plants,
as required by Section 2651.012;
(3) [(2)] the proposed agent, including a
corporation's managerial personnel, if applicable, has reasonable
experience or instruction in the field of title insurance;
(4) [(3)] the title insurance company:
(A) knows that the proposed agent has a good
business reputation and is worthy of the public trust; and
(B) is unaware of any fact or condition that
disqualifies the proposed agent from receiving a license; and
(5) [(4)] the proposed agent qualifies as a title
insurance agent under this chapter.
(d) Except as provided by Section 2651.0021(e), an agent
applying for an initial license under this subchapter must provide
evidence that the agent and its management personnel have
successfully completed a professional training program that
complies with Section 2651.0021. The program must have been
completed within one year preceding the date of application.
SECTION 12. Subchapter A, Chapter 2651, Insurance Code, is
amended by adding Section 2651.0021 to read as follows:
Sec. 2651.0021. PROFESSIONAL TRAINING PROGRAM. (a) The
commissioner shall adopt by rule a professional training program
for a title insurance agent and the management personnel of the
title insurance agent.
(b) The professional training program must be designed to
provide information regarding:
(1) the basic principles and coverages related to
title insurance;
(2) recent and prospective changes in those principles
and coverages;
(3) applicable rules and laws;
(4) proper conduct of the license holder's title
insurance business;
(5) accounting principles and practices and financial
responsibilities and practices relevant to title insurance; and
(6) the duties and responsibilities of a title
insurance agent.
(c) Professional training program hours may be used to
satisfy the continuing education requirements established under
Section 2651.204.
(d) A professional training program course must be offered
by:
(1) a statewide title insurance association,
statewide title agents' association or professional association,
or local chapter of a statewide title insurance or title agents'
association or professional association;
(2) an accredited college or university;
(3) a career school or college as defined by Section
132.001, Education Code;
(4) the State Bar of Texas;
(5) an educational publisher;
(6) a title insurance company authorized to engage in
business in this state;
(7) a company that owns one or more title insurance
companies authorized to engage in business in this state;
(8) a public school system in this state; or
(9) an individual accredited as an instructor by an
entity described by Subdivisions (1)-(8).
(e) An individual is exempt from the professional training
requirement of this section if the individual has held in this state
for at least five years a position as management personnel with a
title insurance agent, or a comparable position, as determined
under rules adopted by the commissioner.
SECTION 13. Section 2651.011, Insurance Code, is amended to
read as follows:
Sec. 2651.011. PRIVILEGED COMMUNICATIONS; FINANCIAL
INFORMATION. (a) Any information, including a document, record,
or statement, and including information provided to or received
from the commissioner under Subsection (b) or (c), or any other
information required or permitted to be made or disclosed to or by
the department under this subchapter, other than Section 2651.001,
is not public information subject to Chapter 552, Government Code,
except to the extent described by Subsection (b), and is a
privileged communication and may not be disclosed to the public
except as evidence in an administrative hearing or proceeding.
This subsection does not apply to a document, record, or statement
required to be made or disclosed to the department under Chapter
36[:
[(1) a privileged communication; and
[(2) not admissible in evidence in a court action or
proceeding except under a subpoena issued by a court of record].
(b) A title insurance company may provide information to the
commissioner about a financial matter that would reasonably call
into question the solvency of a title agent that the title insurance
company appointed. Each title insurance company shall provide
annually to the department a list of officers authorized to provide
to the department the information under this subsection.
Information provided under this subsection is not subject to
Chapter 552, Government Code, except that the commissioner may
release information that the commissioner received under this
subsection to a title insurance company that has appointed, or that
is considering appointing, the title agent. The commissioner may
also release information that the commissioner received under this
subsection to a title agent under Section 2651.206, Insurance Code,
if the information is evidence on which an audit report or
examination report relies. A title insurance company that receives
information under this subsection may not release the information
except under a subpoena issued by a court of competent
jurisdiction.
(c) Each title insurance agent shall provide the
department, on a quarterly basis, with a copy of the agent's
quarterly withholding tax report furnished by the agent to the
United States Internal Revenue Service. The title insurance agent
must also provide to the department proof of the payment of the tax.
An agent that does not have employees shall certify to the
department on a quarterly basis that there has not been a material
change in the agent's financial condition.
(d) The commissioner by rule may prescribe the types of
information under Subsections (b) and (c) that are privileged under
Subsection (a).
SECTION 14. Subchapter A, Chapter 2651, Insurance Code, is
amended by adding Sections 2651.012 and 2651.013 to read as
follows:
Sec. 2651.012. UNENCUMBERED ASSETS. (a) In this section:
(1) "Principal office" means a principal office of the
business organization, unincorporated association, sole
proprietorship, or partnership in this state in which the decision
makers for the organization conduct the daily affairs of the
organization. The presence of an agency or representative does not
establish a principal office.
(2) "Unencumbered assets" means:
(A) cash or cash equivalents;
(B) liquid assets that have a readily
determinable market value and that do not have any lien against
them;
(C) real estate, in excess of any encumbrances;
(D) investments, such as mutual funds,
certificates of deposit, and stocks and bonds;
(E) a surety bond, the form and content of which
shall be prescribed by the commissioner in accordance with this
code;
(F) a deposit made in accordance with Section
2651.102; and
(G) a letter of credit that meets the
requirements of Section 493.104(b)(2)(C).
(b) The unencumbered assets required under this section are
reserves for contingencies. The reserves must be deducted from
premiums for purposes of proceedings conducted under Subchapter D,
Chapter 2703. The reserves may only be spent or released:
(1) as permitted by the commissioner if the agent is
declared impaired;
(2) if the agent merges or consolidates with another
agent who maintains the amount of unencumbered assets that would be
required for the survivor of the merger or consolidation;
(3) if the agent surrenders the agent's license under
Section 2651.201 and the rules adopted under that section; or
(4) if the agent is liquidated.
(c) Except as provided by Subsection (d), an agent must
maintain unencumbered assets with a market value in excess of
liabilities, exclusive of the value of abstract plants, in the
following amounts unless the commissioner establishes lesser
amounts by rule:
(1) if the agent maintains its principal office in a
county with a population of 10,000 or more but less than 50,000:
$25,000;
(2) if the agent maintains its principal office in a
county with a population of 50,000 or more but less than 200,000:
$50,000;
(3) if the agent maintains its principal office in a
county with a population of 200,000 or more but less than one
million: $100,000; and
(4) if the agent maintains its principal office in a
county with a population of one million or more: $150,000.
(d) Except as provided by the commissioner by rule, an agent
that maintains its principal office in a county with a population of
less than 10,000 is exempt from this section.
(e) An agent that maintains a principal office in more than
one county must meet the asset standards for the largest county for
which the agent will hold a license.
(f) An agent may elect to:
(1) maintain unencumbered assets as required by this
section; or
(2) place a deposit with the department as authorized
by Section 2652.102.
(g) An agent that holds a license on September 1, 2009, and
that has held the license for at least three years as of that date is
not required to comply with Subsection (c) on September 1, 2009, but
shall increase the unencumbered assets held by the agent, or make
and increase the required deposit, until the agent is in compliance
with the required capitalization amounts in accordance with the
schedule established under this subsection. The agent must hold
unencumbered assets, or make a deposit in an amount, such that:
(1) if the agent has been licensed at least three years
but less than four years:
(A) the agent has at least 33 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 66 percent of the
required capitalization amount on September 1, 2011; and
(C) the agent has at least 100 percent of the
required capitalization amount on September 1, 2012;
(2) if the agent has been licensed at least four years
but less than five years:
(A) the agent has at least 25 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 50 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 75 percent of the
required capitalization amount on September 1, 2012; and
(D) the agent has at least 100 percent of the
required capitalization amount on September 1, 2013;
(3) if the agent has been licensed at least five years
but less than six years:
(A) the agent has at least 20 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 40 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 60 percent of the
required capitalization amount on September 1, 2012;
(D) the agent has at least 80 percent of the
required capitalization amount on September 1, 2013; and
(E) the agent has at least 100 percent of the
required capitalization amount on September 1, 2014;
(4) if the agent has been licensed at least six years
but less than seven years:
(A) the agent has at least 16.66 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 33.32 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 49.98 percent of the
required capitalization amount on September 1, 2012;
(D) the agent has at least 66.64 percent of the
required capitalization amount on September 1, 2013;
(E) the agent has at least 83.3 percent of the
required capitalization amount on September 1, 2014; and
(F) the agent has at least 100 percent of the
required capitalization amount on September 1, 2015;
(5) if the agent has been licensed at least seven years
but less than eight years:
(A) the agent has at least 14.29 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 28.58 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 42.87 percent of the
required capitalization amount on September 1, 2012;
(D) the agent has at least 57.16 percent of the
required capitalization amount on September 1, 2013;
(E) the agent has at least 71.45 percent of the
required capitalization amount on September 1, 2014;
(F) the agent has at least 85.74 percent of the
required capitalization amount on September 1, 2015; and
(G) the agent has at least 100 percent of the
required capitalization amount on September 1, 2016;
(6) if the agent has been licensed at least eight years
but less than nine years:
(A) the agent has at least 12.5 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 25 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 37.5 percent of the
required capitalization amount on September 1, 2012;
(D) the agent has at least 50 percent of the
required capitalization amount on September 1, 2013;
(E) the agent has at least 62.5 percent of the
required capitalization amount on September 1, 2014;
(F) the agent has at least 75 percent of the
required capitalization amount on September 1, 2015;
(G) the agent has at least 87.5 percent of the
required capitalization amount on September 1, 2016; and
(H) the agent has at least 100 percent of the
required capitalization amount on September 1, 2017; and
(7) if the agent has been licensed at least nine years:
(A) the agent has at least 11.11 percent of the
required capitalization amount on September 1, 2010;
(B) the agent has at least 22.22 percent of the
required capitalization amount on September 1, 2011;
(C) the agent has at least 33.33 percent of the
required capitalization amount on September 1, 2012;
(D) the agent has at least 44.44 percent of the
required capitalization amount on September 1, 2013;
(E) the agent has at least 55.55 percent of the
required capitalization amount on September 1, 2014;
(F) the agent has at least 66.66 percent of the
required capitalization amount on September 1, 2015;
(G) the agent has at least 77.77 percent of the
required capitalization amount on September 1, 2016;
(H) the agent has at least 88.88 percent of the
required capitalization amount on September 1, 2017; and
(I) the agent has at least 100 percent of the
required capitalization amount on September 1, 2018.
(h) If the agent has been licensed less than three years as
of September 1, 2009, the agent must have:
(1) at least 50 percent of the required capitalization
amount required under Subsection (c) on September 1, 2010; and
(2) 100 percent of that required capitalization amount
on September 1, 2011.
(i) This subsection and Subsection (g) expire September 2,
2018.
(j) Notwithstanding any other provision of this section,
this section takes effect only after the commissioner adopts the
form, content, and procedures for use of the surety bond authorized
under Subsection (a). The commissioner by rule shall establish the
procedures for making, filing, using, and paying for the surety
bond. Notwithstanding Subsections (g) and (h), the commissioner by
rule may extend the dates established under those subsections as
necessary to comply with this subsection.
Sec. 2651.013. DIVISION OF PREMIUM HELD IN TRUST; RULES.
(a) The funds held by a title insurance agent that are owed to a
title insurance company, another title insurance agent, or a direct
operation arising from a division of premium, whether as determined
under rules adopted by the commissioner or by agreement among the
parties, are considered to be held in trust for the title insurance
company, other title insurance agent, or direct operation.
(b) This section does not require, and the commissioner may
not require by rule, that funds described by Subsection (a) be held
in a separate account subject to an external audit. This section
does not affect the department's or association's authority to
examine or audit a title agent or direct operation.
SECTION 15. Subchapter D, Chapter 2651, Insurance Code, is
amended by adding Section 2651.158 to read as follows:
Sec. 2651.158. CERTIFICATION OF UNENCUMBERED ASSETS. (a)
Unless the agent has elected to make a deposit with the department
under Section 2651.012(f), the annual audit of escrow accounts must
be accompanied by a certification by a certified public accountant
that the title insurance agent has the appropriate unencumbered
assets in excess of liabilities, exclusive of the value of its
abstract plants, as required by Section 2651.012.
(b) The commissioner by rule shall establish:
(1) a procedure to be used to determine the value of
categories of assets; and
(2) the method by which the certification required by
this section must be made which shall not include an audit of
operating accounts.
SECTION 16. Subchapter E, Chapter 2651, Insurance Code, is
amended by adding Sections 2651.205 and 2651.206 to read as
follows:
Sec. 2651.205. TITLE AGENT RECORDS. (a) A landlord or
storage facility, including electronic storage, that accepts
possession of an agent's guaranty file or other records takes
possession subject to:
(1) the right of access of the title insurance company
involved in the transaction that the file documents, during
customary business hours, for the purpose of copying the guaranty
file; and
(2) the obligation to maintain the confidentiality of
nonpublic information in the title insurance agent's records
according to state and federal laws that govern the title insurance
agent.
(b) If the title insurance agent has been designated
impaired, the Texas Title Insurance Guaranty Association has the
right to access the guaranty files and other records of the title
insurance agent, including electronic records, for 60 days from the
date of impairment, during customary business hours, for purposes
of copying those records.
(c) Except for the right of access granted under Subsections
(a) and (b), a lien created in favor of the landlord by contract or
otherwise is not impaired.
(d) For purposes of this section, "title insurance agent"
includes an agent owned wholly or partly by a title insurance
company and includes a direct operation.
Sec. 2651.206. EXAMINATION REPORTS. (a) An audit, review,
or examination conducted under this chapter or Chapter 2602 must be
conducted in accordance with rules adopted by the commissioner.
The rules must provide:
(1) that before a report from an examination, review,
or audit becomes final, the department will furnish to the title
agent or direct operation a copy of the report and any evidence on
which the report relies;
(2) a reasonable period of not less than 10 days after
the title agent or direct operation receives the report and
evidence from the department for the title agent or direct
operation to respond;
(3) an opportunity for an appeal under a process
similar to the process under Title 28, Part 1, Chapter 7, Subchapter
A, Texas Administrative Code; and
(4) procedures to ensure that the report and any
evidence regarding the report remain confidential and are
transmitted only to designated representatives of the title agent
or direct operation.
(b) The commissioner shall furnish the title agent or direct
operation with a draft of the report and a copy of any evidence not
later than the 10th day before the scheduled date of a meeting
requested by the department regarding a report.
(c) This section does not require the department to turn
over work papers. For purposes of this subsection, work papers are
the records of an auditor or examiner of the procedures followed,
the tests performed, the information obtained, and the conclusions
reached that are pertinent to the audit or examination. Work papers
include work programs, analyses, memoranda, letters of
confirmation and representation, abstracts of company documents
and schedules, and commentaries prepared or obtained by the auditor
or examiner that support the opinions of the auditor or examiner.
SECTION 17. Section 2703.202, Insurance Code, is amended by
adding Subsections (c), (d), (e), and (f) to read as follows:
(c) Except as provided by Subsection (d), a public hearing
held under Subsection (a) or under Section 2703.206 shall be
conducted by the commissioner as a rulemaking hearing under
Subchapter B, Chapter 2001, Government Code.
(d) Notwithstanding Subsection (c), at the request of a
title insurance company or the public insurance counsel, a public
hearing held under Subsection (a) or under Section 2703.206 must be
conducted by the commissioner as a contested case hearing under
Subchapters C through H and Subchapter Z, Chapter 2001, Government
Code.
(e) Information received or requested by the commissioner
as part of an individual audit or examination under Chapters 2602
and 2651 may not be used for rate setting under Subchapter D,
Chapter 2703. Nothing in this section prohibits a party from
conducting discovery in a ratemaking or other proceeding or
producing other information requested by the department, or
verifying the data reported under a statistical plan or report
promulgated by the commissioner.
(f) Subsections (c) through (e) apply only to a public
hearing held on or after January 1, 2009.
SECTION 18. Section 2602.056 and Section 2602.153(c),
Insurance Code, are repealed.
SECTION 19. An abstract plant that exists on September 1,
2009, but that does not, on that date, cover a period beginning not
later than January 1, 1979, as required by Section 2501.004,
Insurance Code, as amended by this Act, is not required to comply
with that section before January 1, 2014.
SECTION 20. Section 2651.158, Insurance Code, as added by
this Act, applies beginning with annual audits conducted under
Subchapter D, Chapter 2651, Insurance Code, for the 2011 calendar
year.
SECTION 21. The commissioner of insurance shall hold a
hearing not later than the 120th day after the effective date of
this Act. Not later than the 90th day after the date of that
hearing, the commissioner shall issue an order prescribing the
rules to be used in connection with Section 2651.206, Insurance
Code, as added by this Act.
SECTION 22. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4338 was passed by the House on May 5,
2009, by the following vote: Yeas 144, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 4338 on May 29, 2009, by the following vote: Yeas 143, Nays 0,
1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4338 was passed by the Senate, with
amendments, on May 25, 2009, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor