Texas 2009 - 81st Regular

Texas House Bill HB4339 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	H.B. No. 4339
2	2
3	3
4	4	AN ACT
5	5	relating to the establishment and operation of the unauthorized
6	6	insurance guaranty fund.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Subtitle D, Title 4, Insurance Code, is amended
9	9	by adding Chapter 464 to read as follows:
10	10	CHAPTER 464. UNAUTHORIZED INSURANCE GUARANTY FUND ACT
11	11	SUBCHAPTER A. GENERAL PROVISIONS
12	12	Sec. 464.001. SHORT TITLE. This chapter may be cited as the
13	13	Unauthorized Insurance Guaranty Fund Act.
14	14	Sec. 464.002. CONSTRUCTION AND PURPOSE. (a) The purpose of
15	15	this chapter is to alleviate the financial hardship imposed on
16	16	persons who are harmed by the sale of unauthorized insurance in this
17	17	state. Persons who suffer damages as a result of unpaid claims on
18	18	policies issued by unauthorized insurers in this state are not
19	19	covered under guaranty acts, which provide protection to persons
20	20	with claims against authorized insurers. The legislature finds
21	21	that it is appropriate to provide additional remedies to these
22	22	persons.
23	23	(b) The commissioner's powers under this Act shall be
24	24	liberally construed to support the purpose stated in Subsection
25	25	(a).
26	26	(c) This chapter does not limit the powers granted the
27	27	commissioner under other provisions of law. The powers and
28	28	authority of the commissioner under this chapter are cumulative and
29	29	are in addition to all other powers and authority that are available
30	30	to the commissioner.
31	31	Sec. 464.003. DEFINITIONS. In this chapter:
32	32	(1) "Delinquency proceeding" has the meaning assigned
33	33	by Section 443.004.
34	34	(2) "Fund" means the unauthorized insurance guaranty
35	35	fund.
36	36	(3) "Fund account" means the account established for
37	37	the deposit of money held by the fund.
38	38	(4) "Policy claim" means an obligation incurred under
39	39	a contract or policy of insurance issued by an unauthorized insurer
40	40	as described by Chapter 101. The term does not include claims under
41	41	reinsurance contracts or claims of other creditors.
42	42	(5) "Receiver" means the receiver of an unauthorized
43	43	insurer in a delinquency proceeding, including the commissioner
44	44	when acting in that capacity, or a special deputy receiver.
45	45	(6) "Unauthorized insurer" has the meaning assigned by
46	46	Section 443.004.
47	47	Sec. 464.004. APPLICABILITY. This chapter applies to a
48	48	delinquency proceeding under Chapter 443 of an unauthorized
49	49	insurer.
50	50	Sec. 464.005. IMMUNITY. Liability does not exist and a
51	51	cause of action does not arise against the commissioner or an agent,
52	52	employee, or representative of the commissioner for any good faith
53	53	act or omission in performing the commissioner's, or the agent's,
54	54	employee's, or representative's powers and duties under this
55	55	chapter.
56	56	Sec. 464.006. EXEMPTION FROM CERTAIN FEES AND TAXES. The
57	57	fund is exempt from payment of all fees and taxes levied by this
58	58	state or a political subdivision of this state.
59	59	Sec. 464.007. RULES. The commissioner may adopt rules as
60	60	necessary to implement this chapter.
61	61	[Sections 464.008-464.050 reserved for expansion]
62	62	SUBCHAPTER B. FUND
63	63	Sec. 464.051. CREATION OF UNAUTHORIZED INSURANCE GUARANTY
64	64	FUND. The unauthorized insurance guaranty fund is established.
65	65	Sec. 464.052. DEPOSIT OF FUNDS. (a) The fund account shall
66	66	be established with the Texas Treasury Safekeeping Trust Company in
67	67	accordance with procedures adopted by the comptroller. The
68	68	comptroller shall account for the deposited money separately from
69	69	all other money.
70	70	(b) The commissioner may identify collected penalties to be
71	71	deposited into the fund account from:
72	72	(1) administrative penalties assessed by the
73	73	commissioner for violations of Chapter 101 or penalties under
74	74	Section 861.702, including amounts collected through state warrant
75	75	holds;
76	76	(2) civil penalties assessed under Chapter 101 when
77	77	the commissioner is the party requesting penalties;
78	78	(3) administrative penalties assessed by the
79	79	commissioner against a person holding a certificate of authority,
80	80	license, registration, or other authorization to engage in the
81	81	business of insurance that is issued or recognized by the
82	82	commissioner for engaging in conduct outside the scope of the
83	83	person's certificate, license, registration, or authorization;
84	84	(4) administrative penalties assessed by the
85	85	commissioner against a person holding a certificate of authority,
86	86	license, registration, or authorization issued or recognized by the
87	87	commissioner for using unapproved forms, rates, or advertisements
88	88	if the forms, rates, or advertisements are required to be approved
89	89	by the commissioner before being used in this state; and
90	90	(5) forfeitures of bonds issued under Section 101.353
91	91	or 101.354.
92	92	(c) In determining the amounts to be deposited into the fund
93	93	account, the commissioner shall consider:
94	94	(1) the amount existing in the fund account;
95	95	(2) the anticipated penalties described by Subsection
96	96	(b) that have been or may be collected;
97	97	(3) the estimated assets, administrative expenses,
98	98	and claims of any unauthorized insurers subject to a delinquency
99	99	proceeding; and
100	100	(4) any anticipated delinquency proceedings of
101	101	unauthorized insurers.
102	102	(d) If the commissioner determines that the amounts on
103	103	deposit in the fund account exceed the amount required to pay
104	104	administrative expenses and claims of existing and anticipated
105	105	delinquency proceedings of unauthorized insurers, the commissioner
106	106	may transfer the excess amount from the fund to the comptroller for
107	107	deposit into the general revenue fund.
108	108	(e) The commissioner shall notify the comptroller of the
109	109	existence of money under Subsection (c) to be credited to the fund
110	110	account. The commissioner must enter an order to transfer amounts
111	111	from the fund account.
112	112	Sec. 464.053. ADVANCE OF FUNDS. (a) In the event of a
113	113	delinquency proceeding of an unauthorized insurer, the
114	114	commissioner may advance funds from the fund account if the assets
115	115	of the unauthorized insurer are insufficient to pay administrative
116	116	expenses or policy claims. The commissioner shall hold the funds in
117	117	a separate account. Funds advanced under this section are
118	118	available to supplement the assets of the unauthorized insurer, and
119	119	do not become property of the unauthorized insurer or the
120	120	receivership estate.
121	121	(b) In determining an amount to be advanced, the
122	122	commissioner shall consider:
123	123	(1) the amount existing in the fund, and any estimated
124	124	future amounts to be deposited in the fund;
125	125	(2) the assets of the unauthorized insurer that are
126	126	anticipated to be available to pay administrative expenses and
127	127	claims;
128	128	(3) the projected administrative expenses and claims
129	129	in the delinquency proceeding; and
130	130	(4) the projected administrative expenses and claims
131	131	in other existing and anticipated delinquency proceedings of
132	132	unauthorized insurers.
133	133	Sec. 464.054. USE OF FUNDS. (a) An amount advanced under
134	134	Section 464.053 may be used to supplement the assets of an
135	135	unauthorized insurer to pay administrative expenses and policy
136	136	claims that are approved by:
137	137	(1) the commissioner in a proceeding under Section
138	138	443.051; or
139	139	(2) the receiver in a proceeding under Section
140	140	443.052.
141	141	(b) For the purposes of Section 443.301(b), approved policy
142	142	claims under this chapter shall be classified as Class 2 claims.
143	143	(c) The commissioner or receiver, as applicable, is not
144	144	required to make distributions from the assets of the unauthorized
145	145	insurer before using amounts advanced under Section 464.053. Any
146	146	payment of a policy claim made under Subsection (a) shall be treated
147	147	as a distribution under Section 443.302. If approved policy claims
148	148	cannot be paid in full from the funds advanced under Section 464.053
149	149	and the assets of the unauthorized insurer available for
150	150	distribution, the claims shall be paid on a pro rata basis in the
151	151	manner described in Section 443.301.
152	152	(d) Amounts advanced that are not needed to pay
153	153	administrative expenses or policy claims shall be returned to the
154	154	fund account. On a final distribution under Section 443.302 or the
155	155	termination of a delinquency proceeding, any funds of the
156	156	unauthorized insurer remaining after the payment in full of
157	157	administrative expenses and policy claims shall be used to repay
158	158	the advance, up to the amount of the advance.
159	159	(e) A person who has a policy claim may receive funds
160	160	deposited or advanced under this chapter only in accordance with
161	161	this section.
162	162	SECTION 2. This Act takes effect immediately if it receives
163	163	a vote of two-thirds of all the members elected to each house, as
164	164	provided by Section 39, Article III, Texas Constitution. If this
165	165	Act does not receive the vote necessary for immediate effect, this
166	166	Act takes effect September 1, 2009.
167	167	______________________________ ______________________________
168	168	President of the Senate Speaker of the House
169	169	I certify that H.B. No. 4339 was passed by the House on April
170	170	15, 2009, by the following vote: Yeas 147, Nays 0, 1 present, not
171	171	voting.
172	172	______________________________
173	173	Chief Clerk of the House
174	174	I certify that H.B. No. 4339 was passed by the Senate on May
175	175	21, 2009, by the following vote: Yeas 31, Nays 0.
176	176	______________________________
177	177	Secretary of the Senate
178	178	APPROVED: _____________________
179	179	Date
180	180	_____________________
181	181	Governor