Texas 2013 - 83rd Regular

Texas House Bill HB3451 Compare Versions

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Old	New	Differences
1	1	83R11680 PMO-F
2	2	By: Eiland H.B. No. 3451
3	3	Substitute the following for H.B. No. 3451:
4	4	By: Eiland C.S.H.B. No. 3451
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the formation, operation, and authority to engage in
10	10	business of insurance companies and other entities regulated under
11	11	the Insurance Code; restructuring or changing fees.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	ARTICLE 1. FORMATION, OPERATION, AND AUTHORITY OF ENTITIES
14	14	SECTION 1.01. The heading to Chapter 801, Insurance Code,
15	15	is amended to read as follows:
16	16	CHAPTER 801. INCORPORATION; CERTIFICATE OF AUTHORITY
17	17	SECTION 1.02. Section 801.001(2), Insurance Code, is
18	18	amended to read as follows:
19	19	(2) "Insurer" or "insurance company" means the issuer
20	20	of an insurance policy that is issued to another in consideration of
21	21	a premium and that insures against a loss that may be insured
22	22	against under the law. The term includes [a]:
23	23	(A) a stock company operating under a valid
24	24	charter or certificate of authority [fraternal benefit society];
25	25	(B) a mutual company operating under a valid
26	26	charter or certificate of authority [Lloyd's plan]; and
27	27	(C) any of the following issuers, operating under
28	28	a valid certificate of authority [mutual company of any kind,
29	29	including a]:
30	30	(i) a statewide mutual assessment
31	31	association;
32	32	(ii) a local mutual aid association or
33	33	burial association; [and]
34	34	(iii) a county or farm mutual insurance
35	35	company;
36	36	(iv) a [(D)] reciprocal or interinsurance
37	37	exchange;
38	38	(v) a [(E)] group hospital service
39	39	corporation;
40	40	(vi) a fraternal benefit society;
41	41	(vii) a Lloyd's plan;
42	42	(viii) a stipulated premium company;
43	43	(ix) a [(F)] health maintenance
44	44	organization;
45	45	(x) a [(G)] nonprofit legal services
46	46	corporation; and
47	47	(xi) any foreign [(H) stock] company,
48	48	alien company, port of entry, or branch office.
49	49	SECTION 1.03. Section 822.002, Insurance Code, is
50	50	transferred to Subchapter A, Chapter 801, Insurance Code,
51	51	redesignated as Section 801.0011, Insurance Code, and amended to
52	52	read as follows:
53	53	Sec. 801.0011 [822.002]. APPLICABILITY OF LAW GOVERNING
54	54	CORPORATIONS. An insurance company incorporated in this state is
55	55	subject to the Texas Business Organizations Code [Corporation Act,
56	56	the Texas Miscellaneous Corporation Laws Act (Article 1302-1.01 et
57	57	seq., Vernon's Texas Civil Statutes),] and any other law of this
58	58	state that governs corporations in general to the extent those laws
59	59	are not inconsistent with this code.
60	60	SECTION 1.04. Chapter 801, Insurance Code, is amended by
61	61	adding Subchapter A-1, and a heading is added to that subchapter to
62	62	read as follows:
63	63	SUBCHAPTER A-1. INCORPORATION OF INSURANCE COMPANIES; RELATED
64	64	REGULATORY REQUIREMENTS
65	65	SECTION 1.05. Section 822.051, Insurance Code, is
66	66	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
67	67	added by this Act, redesignated as Section 801.021, Insurance Code,
68	68	and amended to read as follows:
69	69	Sec. 801.021 [822.051]. FORMATION OF COMPANY; AUTHORITY OF
70	70	INSURER GENERALLY. (a) Any number of persons or incorporators may
71	71	form a company for the purpose of engaging in the business of
72	72	insurance.
73	73	(b) To form a company, each incorporator must adopt and sign
74	74	the articles of incorporation of the company as provided by this
75	75	chapter [code].
76	76	(c) Incorporators shall appoint the initial board of
77	77	directors. The board must always have at least three members. The
78	78	initial board members shall appoint the officers or managers of the
79	79	proposed insurer. On approval of the proposed insurer's
80	80	incorporation and certificate of authority, the initial board
81	81	members and the shareholders or members shall meet to formally
82	82	appoint the board of directors and officers of the incorporated
83	83	insurer.
84	84	(d) The insurance company's board of directors, trustees,
85	85	or managers shall adopt and amend bylaws that include provisions
86	86	establishing the qualifications, duties, and terms of office of and
87	87	the manner of electing directors, trustees, or managers and
88	88	officers of the company. The bylaws shall require, at a minimum, an
89	89	annual meeting of the board of directors and shareholders or
90	90	members at which directors and officers are appointed or elected.
91	91	(e) An insurer may sue or be sued.
92	92	(f) An insurer may make or enforce contracts in relation to
93	93	the insurer's business.
94	94	(g) An insurer may in the insurer's own name, or through a
95	95	trustee chosen by the board of directors, acquire, purchase, hold,
96	96	and dispose of real and personal property to further the purposes of
97	97	the insurer.
98	98	SECTION 1.06. Section 822.052, Insurance Code, is
99	99	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
100	100	added by this Act, redesignated as Section 801.022, Insurance Code,
101	101	and amended to read as follows:
102	102	Sec. 801.022 [822.052]. ARTICLES OF INCORPORATION. (a)
103	103	Articles of incorporation of a proposed insurance company must
104	104	state:
105	105	(1) the name of the insurance company;
106	106	(2) the address at which [location of] the insurance
107	107	company's registered agent for service of process in this state is
108	108	located [company's principal business office];
109	109	(3) the type of insurance company, whether a stock or
110	110	mutual company;
111	111	(4) the kind of insurance business in which the
112	112	company proposes to engage;
113	113	(5) if the company is a stock company:
114	114	(A) [(4)] the amount of the company's authorized
115	115	shares, the par value, if any, of the shares, and the amount of the
116	116	initial shares fully issued and subscribed, representing initial
117	117	funding, which should include minimum capital and minimum surplus;
118	118	and
119	119	(B) if any shares do not have par value, a
120	120	statement authenticated by the incorporators stating the number of
121	121	shares without par value that are subscribed and the actual
122	122	consideration received by the company for those shares,
123	123	representing initial funding, which should include minimum capital
124	124	and minimum surplus [stock]; and
125	125	(6) if the company is a mutual company, [(5)] the
126	126	initial amount of the company's unencumbered surplus, which should
127	127	include minimum unencumbered surplus, representing minimum
128	128	requirements and initial funding.
129	129	(b) Articles of incorporation must be submitted as part of
130	130	an application to incorporate and obtain a certificate of authority
131	131	to engage in the business of insurance in this state. The articles
132	132	of incorporation must be submitted in a format prescribed by the
133	133	commissioner.
134	134	SECTION 1.07. Sections 822.054 and 841.054, Insurance Code,
135	135	are transferred to Subchapter A-1, Chapter 801, Insurance Code, as
136	136	added by this Act, redesignated as Section 801.023, Insurance Code,
137	137	and amended to read as follows:
138	138	Sec. 801.023 [822.054]. CAPITAL STOCK AND SURPLUS
139	139	REQUIREMENTS. (a) A stock property and casualty [An] insurance
140	140	company must have capital stock in an amount of at least $2.5
141	141	million and surplus in an amount of at least $2.5 million. A mutual
142	142	property and casualty insurance company must have unencumbered
143	143	surplus of at least $5 million.
144	144	(b) [At the time of incorporation, the required capital and
145	145	surplus must be in cash.
146	146	[Sec. 841.054. CAPITAL STOCK AND SURPLUS REQUIREMENTS.
147	147	(a)] A stock life [domestic] insurance company must have capital
148	148	stock in an amount of at least $700,000 and surplus in an amount of
149	149	at least $700,000. A mutual life insurance company must have
150	150	unencumbered surplus of at least $1.4 million.
151	151	(c) On the date of incorporation, the required capital,
152	152	surplus, and unencumbered surplus must be in cash or a cash
153	153	equivalent.
154	154	(d) After [(b) All of the capital stock required by
155	155	Subsection (a) must be fully subscribed and paid up and delivered to
156	156	the incorporators before the articles of incorporation are filed.
157	157	[(c) At the time of] incorporation and the issuance of a
158	158	certificate of authority to an insurance company, the minimum
159	159	[required] capital stock and surplus of the company may [shall]
160	160	consist only of:
161	161	(1) United States currency;
162	162	(2) bonds of [the United States, this state, or a
163	163	county or municipality of] this state; [or]
164	164	(3) bonds or other evidences of indebtedness of the
165	165	United States the principal and interest of which are guaranteed by
166	166	the United States;
167	167	(4) bonds or other interest-bearing evidences of
168	168	indebtedness of a county or municipality of this state; and
169	169	(5) notes secured by first mortgages:
170	170	(A) on otherwise unencumbered real property in
171	171	this state the title to which is valid; and
172	172	(B) the payment of which is insured wholly or
173	173	partly by the United States.
174	174	(e) Not [government insured mortgage loans that are
175	175	authorized by this chapter or Chapter 425, with not] more than 50
176	176	percent of the minimum [required] capital stock and minimum surplus
177	177	of an insurance company may be invested in notes described by
178	178	Subsection (d)(5) [first mortgage real property loans].
179	179	SECTION 1.08. Section 841.205, Insurance Code, is
180	180	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
181	181	added by this Act, redesignated as Section 801.024, Insurance Code,
182	182	and amended to read as follows:
183	183	Sec. 801.024 [841.205]. COMMISSIONER MAY REQUIRE LARGER
184	184	CAPITAL AND SURPLUS AMOUNTS. (a) The commissioner by rule or
185	185	guideline may require a domestic insurance company [that writes or
186	186	assumes a life insurance or annuity contract or assumes liability
187	187	on or indemnifies one person for any risk under an accident and
188	188	health insurance policy, or a combination of these policies, in an
189	189	amount that exceeds $10,000,] to maintain capital and surplus in
190	190	amounts that exceed the minimum amounts required by this chapter
191	191	because of:
192	192	(1) the nature and kind of risks the company
193	193	underwrites or reinsures;
194	194	(2) the premium volume of risks the company
195	195	underwrites or reinsures;
196	196	(3) the composition, quality, duration, or liquidity
197	197	of the company's investment portfolio;
198	198	(4) fluctuations in the market value of securities the
199	199	company holds; or
200	200	(5) the adequacy of the company's reserves.
201	201	(b) A rule adopted under Subsection (a) must be designed to
202	202	ensure the financial solvency of an insurance company for the
203	203	protection of policyholders.
204	204	(c) A rule adopted under Subsection (a) [but] may not
205	205	require that the total admitted assets of a life, health, or
206	206	accident insurance company exceed 106 percent of its total
207	207	liabilities.
208	208	(d) An [(c) A fraternal benefit society operating under
209	209	Chapter 885 and a mutual life] insurance company that ceases to
210	210	write or assume business continues to be [operating under Chapter
211	211	882 are] subject to [a rule adopted under] this section.
212	212	SECTION 1.09. Section 841.206, Insurance Code, is
213	213	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
214	214	added by this Act, redesignated as Section 801.025, Insurance Code,
215	215	and amended to read as follows:
216	216	Sec. 801.025 [841.206]. IMPAIRMENT OF CAPITAL AND SURPLUS.
217	217	(a) An insurance company incorporated or authorized to engage in
218	218	[do] the lines of business authorized in this chapter may not have:
219	219	(1) the company's required capital impaired;
220	220	(2) more than 90 percent of the company's required
221	221	minimum surplus impaired; or
222	222	(3) the surplus required under Section 801.024
223	223	[841.205] impaired.
224	224	(b) If the commissioner determines that an insurance
225	225	company's capital or surplus is impaired in violation of this
226	226	section, the commissioner shall:
227	227	(1) order the company to immediately reduce the level
228	228	of impairment to an acceptable level of impairment as specified by
229	229	the commissioner or prohibit the company from engaging in the
230	230	business of insurance in this state; and
231	231	(2) begin proceedings as necessary to determine any
232	232	further actions with respect to the impairment.
233	233	SECTION 1.10. Section 841.207, Insurance Code, is
234	234	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
235	235	added by this Act, redesignated as Section 801.026, Insurance Code,
236	236	and amended to read as follows:
237	237	Sec. 801.026 [841.207]. ACTIONS OF COMMISSIONER WHEN
238	238	CAPITAL AND SURPLUS REQUIREMENTS NOT SATISFIED. If an insurance
239	239	company does not comply with the capital and surplus requirements
240	240	of this chapter, the commissioner may order the insurance company
241	241	to cease writing new business and may:
242	242	(1) take action under Chapter 406, 441, or 443 [place
243	243	the insurance company under state supervision or conservatorship];
244	244	(2) declare the insurance company to be in a hazardous
245	245	condition as provided by Subchapter A, Chapter 404;
246	246	(3) declare the insurance company to be impaired as
247	247	provided by Section 801.025 [841.206]; or
248	248	(4) apply to the insurance company any other
249	249	applicable sanction provided by this code.
250	250	SECTION 1.11. Subchapter A-1, Chapter 801, Insurance Code,
251	251	as added by this Act, is amended by adding Section 801.027 to read
252	252	as follows:
253	253	Sec. 801.027. EXAMINATION OF COMPANY. Unless otherwise
254	254	expressly provided by this code, an insurance company organized
255	255	under this chapter is subject to examination under Chapters 86,
256	256	401, 751, and 823.
257	257	SECTION 1.12. Section 822.053, Insurance Code, is
258	258	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
259	259	added by this Act, redesignated as Section 801.028, Insurance Code,
260	260	and amended to read as follows:
261	261	Sec. 801.028 [822.053]. COMPANY [COMPANY'S] NAME. An
262	262	insurance company's name may not be so similar to the name of
263	263	another insurance company as to likely mislead the public. A mutual
264	264	insurance company must have "mutual" in the company's name.
265	265	SECTION 1.13. Section 982.304, Insurance Code, is
266	266	transferred to Subchapter A-1, Chapter 801, Insurance Code, as
267	267	added by this Act, redesignated as Section 801.029, Insurance Code,
268	268	and amended to read as follows:
269	269	Sec. 801.029 [982.304]. SAME OR DECEPTIVELY SIMILAR NAME.
270	270	A foreign or alien insurance company may not be denied permission to
271	271	engage in the business of insurance in this state because the name
272	272	of the company is the same as or deceptively similar to the name of a
273	273	domestic corporation existing under the laws of this state or of
274	274	another foreign or alien insurance company authorized to engage in
275	275	the business of insurance in this state if the company desiring to
276	276	engage in the business of insurance in this state:
277	277	(1) files with the department [and with any county
278	278	clerk as provided by Subchapter B or C, Chapter 71, Business &
279	279	Commerce Code,] an assumed name certificate stating a name
280	280	permitted under the laws of this state; and
281	281	(2) does not engage in any business in this state
282	282	except under the assumed name.
283	283	SECTION 1.14. Chapter 801, Insurance Code, is amended by
284	284	adding Subchapter A-2, and a heading is added to that subchapter to
285	285	read as follows:
286	286	SUBCHAPTER A-2. ISSUANCE AND AMENDMENT OF CHARTER AND
287	287	CERTIFICATE OF AUTHORITY
288	288	SECTION 1.15. Section 822.057, Insurance Code, is
289	289	transferred to Subchapter A-2, Chapter 801, Insurance Code, as
290	290	added by this Act, redesignated as Section 801.031, Insurance Code,
291	291	and amended to read as follows:
292	292	Sec. 801.031 [822.057]. APPLICATION FOR CHARTER AND
293	293	CERTIFICATE OF AUTHORITY. [(a)] To obtain a charter and
294	294	certificate of authority [for an insurance company], the
295	295	incorporators or managers must pay to the department a filing fee
296	296	[the fees] prescribed by Chapter 202 and any applicable rules [law]
297	297	and file with the department:
298	298	(1) an application for a charter and certificate of
299	299	authority on the most current version of the form adopted by the
300	300	National Association of Insurance Commissioners for that purpose
301	301	[and containing the information prescribed by the commissioner];
302	302	(2) the [company's] proposed articles of
303	303	incorporation; and
304	304	(3) [an affidavit made by the incorporators or
305	305	officers of the company that states that:
306	306	[(A) the capital and surplus is the bona fide
307	307	property of the company; and
308	308	[(B) the information in the articles of
309	309	incorporation is true and correct; and
310	310	[(4)] if the application provides for the issuance of
311	311	shares of stock without par value, a certificate authenticated by
312	312	the incorporators or officers stating:
313	313	(A) the number of shares without par value that
314	314	are subscribed; and
315	315	(B) the actual consideration received by the
316	316	insurance company for those shares.
317	317	[(b) If the commissioner is not satisfied with the affidavit
318	318	filed under Subsection (a)(3), the commissioner may require that
319	319	the incorporators provide at their expense additional evidence of a
320	320	matter required in the affidavit before the commissioner:
321	321	[(1) receives the proposed articles of incorporation
322	322	or the application for charter; or
323	323	[(2) issues a certificate of authority to the
324	324	company.]
325	325	SECTION 1.16. Section 822.060, Insurance Code, is
326	326	transferred to Subchapter A-2, Chapter 801, Insurance Code, as
327	327	added by this Act, redesignated as Section 801.032, Insurance Code,
328	328	and amended to read as follows:
329	329	Sec. 801.032 [822.060]. ACTION ON CHARTER AND CERTIFICATE
330	330	APPLICATION OR CHARTER OR CERTIFICATE AMENDMENT APPLICATION. (a)
331	331	In considering an [the] application for a charter and certificate
332	332	of authority or an application to amend a charter or certificate of
333	333	authority, the commissioner shall conduct an examination, limited
334	334	to the filed application and related information, including a
335	335	review to determine whether [if]:
336	336	(1) the proposed capital structure of the company
337	337	meets the requirements of this code;
338	338	(2) the proposed officers, directors, attorney in
339	339	fact, or managing head of the company have sufficient insurance
340	340	experience, ability, standing, and good record to make success of
341	341	the [proposed] company probable;
342	342	(3) the company's funding plan and operational
343	343	history, if any, demonstrate that the operation or expanded
344	344	operation of the company in this state or its operations outside
345	345	this state will not create a condition that might be hazardous to
346	346	the company's policyholders or creditors or to the public;
347	347	(4) for a proposed charter amendment that eliminates
348	348	the company's power to engage in one or more kinds of insurance
349	349	business, all liabilities incidental to the exercise of the
350	350	eliminated charter power have been terminated or wholly reinsured;
351	351	(5) the property involved in an increase of capital or
352	352	surplus, or both, is:
353	353	(A) properly valued; and
354	354	(B) in the form authorized by this code; and
355	355	(6) [(3)] the applicants are acting in good faith.
356	356	(b) If the commissioner determines that the applicant has
357	357	not met the standards set out by Subsection (a), the commissioner
358	358	shall deny the application in writing, giving the reason for the
359	359	denial.
360	360	(c) If the commissioner does not deny the application under
361	361	Subsection (b), the commissioner shall approve the application for
362	362	or amendment of the charter or certificate of authority. [On
363	363	approval of an application, the articles of incorporation of the
364	364	company shall be filed with the department.]
365	365	(d) On the applicant's request, the commissioner shall hold
366	366	a hearing on a denial. Not later than the 30th day after the date
367	367	of the applicant's request for a hearing, the commissioner shall
368	368	request a hearing date.
369	369	SECTION 1.17. Section 801.151, Insurance Code, is
370	370	transferred to Subchapter A-2, Chapter 801, Insurance Code, as
371	371	added by this Act, redesignated as Section 801.033, Insurance Code,
372	372	and amended to read as follows:
373	373	Sec. 801.033 [801.151]. CERTAIN FELONIES; ISSUANCE OF
374	374	CERTIFICATE PROHIBITED. The [Except as provided by Sections
375	375	801.153 and 801.154, the] department may not issue a certificate of
376	376	authority to an applicant if a corporate officer, [or] member of the
377	377	board of directors, or person having control of the applicant has
378	378	been convicted of a felony involving:
379	379	(1) moral turpitude; or
380	380	(2) breach of a fiduciary duty.
381	381	SECTION 1.18. Section 801.152, Insurance Code, is
382	382	transferred to Subchapter A-2, Chapter 801, Insurance Code, as
383	383	added by this Act, redesignated as Section 801.034, Insurance Code,
384	384	and amended to read as follows:
385	385	Sec. 801.034 [801.152]. CERTAIN FELONIES; REVOCATION OF
386	386	CERTIFICATE. The [After notice and hearing, the] department may
387	387	revoke the certificate of authority of an insurer if a corporate
388	388	officer, [or] member of the board of directors, or person having
389	389	control of the insurer is convicted of a felony involving:
390	390	(1) moral turpitude; or
391	391	(2) breach of a fiduciary duty.
392	392	SECTION 1.19. Sections 801.153, 801.154, and 801.155,
393	393	Insurance Code, are transferred to Subchapter A-2, Chapter 801,
394	394	Insurance Code, as added by this Act, redesignated as Section
395	395	801.035, Insurance Code, and amended to read as follows:
396	396	Sec. 801.035 [801.153]. PETITION FOR ISSUANCE OR
397	397	REINSTATEMENT OF CERTIFICATE. (a) An insurance [A] company may
398	398	petition the commissioner for issuance or reinstatement of a
399	399	certificate of authority of the company that is denied or revoked
400	400	under Section 801.033 or 801.034 [this subchapter]:
401	401	(1) not earlier than the later of:
402	402	(A) the fifth anniversary of the date of the
403	403	final conviction; or
404	404	(B) if the officer, [or] director, or person
405	405	having control is sentenced to confinement or imprisonment or
406	406	placed on community supervision, the fifth anniversary of the date
407	407	the person [officer or director] completes the sentence or period
408	408	of community supervision; or
409	409	(2) after the person [officer or director] ceases to
410	410	be an officer or director of the insurer or relinquishes control of
411	411	the insurer, as applicable.
412	412	(b) [Sec. 801.154. GRANT OF PETITION.] The commissioner
413	413	shall grant a petition for issuance or reinstatement of a
414	414	certificate of authority under this section [subchapter] if the
415	415	petitioner demonstrates that granting the petition would be in the
416	416	public interest and that justice would best be served by granting
417	417	the petition.
418	418	(c) [Sec. 801.155. RULES RELATING TO CONTENTS OF
419	419	PETITION.] The department may adopt rules [under this subchapter]
420	420	prescribing the contents of a petition for issuance or
421	421	reinstatement of a certificate of authority under this section.
422	422	SECTION 1.20. Subchapter A-2, Chapter 801, Insurance Code,
423	423	as added by this Act, is amended by adding Section 801.036 to read
424	424	as follows:
425	425	Sec. 801.036. ADOPTION OF NATIONAL ASSOCIATION OF INSURANCE
426	426	COMMISSIONERS LICENSING STANDARDS. (a) A domestic, foreign, or
427	427	alien insurance company applying to become authorized to engage in
428	428	the business of insurance in this state must use the most current
429	429	version of any processes and related forms adopted by the National
430	430	Association of Insurance Commissioners for charter and license
431	431	application.
432	432	(b) A domestic, foreign, or alien insurance company
433	433	authorized to engage in the business of insurance in this state that
434	434	requests an amendment to a charter or certificate of authority must
435	435	use the most current version of applicable processes and forms
436	436	adopted by the National Association of Insurance Commissioners.
437	437	(c) An insurer authorized under this chapter shall provide
438	438	written notice to the department, in the manner prescribed by the
439	439	commissioner by rule, of a change in contact information or a change
440	440	of officers or directors not later than the 30th day after the date
441	441	of the change.
442	442	(d) This section does not relieve an insurer of any
443	443	obligation imposed under Chapter 823.
444	444	(e) The commissioner may exempt any class of insurance
445	445	companies from the requirements of this section if the commissioner
446	446	determines the information required under this section is not
447	447	useful for regulatory purposes with respect to that class of
448	448	companies.
449	449	SECTION 1.21. Section 822.155, Insurance Code, is
450	450	transferred to Subchapter A-2, Chapter 801, Insurance Code, as
451	451	added by this Act, redesignated as Section 801.037, Insurance Code,
452	452	and amended to read as follows:
453	453	Sec. 801.037 [822.155]. APPLICATION FOR AMENDMENT OF
454	454	CHARTER. A domestic insurance company may amend its charter by
455	455	[paying to the commissioner a fee in the amount determined under
456	456	Chapter 202 and by] filing with the department:
457	457	(1) an application for a charter amendment on the form
458	458	and containing the information prescribed by the commissioner; and
459	459	(2) the company's proposed amendment.
460	460	SECTION 1.22. Section 801.052, Insurance Code, is amended
461	461	to read as follows:
462	462	Sec. 801.052. EFFECT AND CONTENTS OF CERTIFICATE. (a) A
463	463	certificate of authority issued to an insurer under this chapter
464	464	authorizes the insurer to engage in the business of insurance. The
465	465	certificate of authority must state the specific lines of business
466	466	or kinds of insurance authorized under the certificate.
467	467	(b) In this section, "line of business" and "kind of
468	468	insurance" include each line of business or kind of insurance
469	469	listed in Subsections (c), (d), and (e) and any line of business or
470	470	kind of insurance promulgated on the annual statement pages for
471	471	which financial data is required to be reported by the insurer or
472	472	health maintenance organization.
473	473	(c) For an insurer required to file a life and accident and
474	474	health annual statement, each of the following is a line of
475	475	business:
476	476	(1) ordinary life;
477	477	(2) group and individual credit life;
478	478	(3) group life;
479	479	(4) industrial life;
480	480	(5) ordinary annuity;
481	481	(6) group annuity;
482	482	(7) ordinary annuity and other fund deposits (variable
483	483	life or variable annuity);
484	484	(8) group annuity and other fund deposits (variable
485	485	life or variable annuity);
486	486	(9) guaranteed investment contracts, funding
487	487	agreements, or similar instruments not based on mortality or
488	488	morbidity contingencies;
489	489	(10) small employer coverage;
490	490	(11) group and individual credit accident and health;
491	491	(12) individual accident and health coverage,
492	492	including collectively renewable accident and health,
493	493	noncancelable accident and health, guaranteed renewable accident
494	494	and health, nonrenewable for stated reasons only accident and
495	495	health, and other accident only;
496	496	(13) group accident and health other than association,
497	497	large employer, or small employer coverage;
498	498	(14) Medicare Plus Choice plan;
499	499	(15) coverage under the state child health plan
500	500	program commonly known as CHIP;
501	501	(16) association coverage;
502	502	(17) large employer coverage; and
503	503	(18) Medicare supplement.
504	504	(d) For an insurer required to file a property and casualty
505	505	annual statement, each of the following is a kind of insurance:
506	506	(1) fire;
507	507	(2) allied lines;
508	508	(3) earthquake;
509	509	(4) flood;
510	510	(5) farm owners multiple peril;
511	511	(6) homeowners multiple peril;
512	512	(7) Texas commercial multiple peril (non-liability
513	513	portion);
514	514	(8) growing crops (all other);
515	515	(9) multiple peril crop;
516	516	(10) inland marine;
517	517	(11) ocean marine;
518	518	(12) small employer coverage;
519	519	(13) group and individual credit accident and health;
520	520	(14) individual accident and health coverage,
521	521	including collectively renewable accident and health,
522	522	noncancelable accident and health, guaranteed renewable accident
523	523	and health, nonrenewable for stated reasons only accident and
524	524	health, and other accident only;
525	525	(15) group accident and health other than association,
526	526	large employer, or small employer coverage;
527	527	(16) Medicare Plus Choice plans;
528	528	(17) coverage under the state child health plan
529	529	program commonly known as CHIP;
530	530	(18) association coverage;
531	531	(19) large employer coverage;
532	532	(20) workers' compensation or employers liability;
533	533	(21) Texas commercial multiple peril (liability
534	534	portion);
535	535	(22) financial guaranty;
536	536	(23) medical malpractice liability for physicians,
537	537	including surgeons and osteopaths;
538	538	(24) medical malpractice liability for health care
539	539	professionals other than physicians;
540	540	(25) medical malpractice liability for hospitals;
541	541	(26) medical malpractice liability for health care
542	542	facilities other than hospitals;
543	543	(27) product liability;
544	544	(28) other general liability, including professional
545	545	liability;
546	546	(29) fidelity and surety;
547	547	(30) bail bonds;
548	548	(31) glass;
549	549	(32) burglary and theft, including forgery;
550	550	(33) boiler and machinery;
551	551	(34) credit;
552	552	(35) type I and type II mortgage guaranty;
553	553	(36) aircraft (all perils);
554	554	(37) private passenger auto no-fault personal injury
555	555	protection;
556	556	(38) other private passenger auto liability;
557	557	(39) commercial auto no-fault personal injury
558	558	protection;
559	559	(40) other commercial auto liability;
560	560	(41) private passenger auto physical damage;
561	561	(42) commercial auto physical damage;
562	562	(43) hail (growing crops only);
563	563	(44) rain;
564	564	(45) title;
565	565	(46) livestock mortality;
566	566	(47) Medicare supplement; and
567	567	(48) warranty, including contractual liability.
568	568	(e) For a health maintenance organization or insurer
569	569	required to file a health annual statement, each of the following is
570	570	a line of business:
571	571	(1) small employer coverage;
572	572	(2) large employer coverage;
573	573	(3) health care services for Medicaid delivered under
574	574	a contract with the Health and Human Services Commission;
575	575	(4) health care services for Medicare or a Medicare
576	576	Plus Choice plan delivered under a contract with the federal
577	577	Centers for Medicare and Medicaid Services;
578	578	(5) coverage under the state child health plan program
579	579	commonly known as CHIP;
580	580	(6) individual coverage;
581	581	(7) association coverage;
582	582	(8) limited service group coverage;
583	583	(9) limited service individual coverage;
584	584	(10) single service group coverage;
585	585	(11) single service individual coverage; and
586	586	(12) Medicare supplement.
587	587	SECTION 1.23. Section 801.055, Insurance Code, is amended
588	588	to read as follows:
589	589	Sec. 801.055. DEPOSIT OF FEES. A fee collected by the
590	590	department under this chapter for a charter or certificate of
591	591	authority shall be deposited to the credit of the Texas Department
592	592	of Insurance operating account.
593	593	SECTION 1.24. Section 801.056(b), Insurance Code, is
594	594	amended to read as follows:
595	595	(b) The department may deny an application for an
596	596	authorization if the applicant or a corporate officer, director, or
597	597	person having control of the applicant fails to provide a complete
598	598	set of fingerprints on request by the department.
599	599	SECTION 1.25. Section 801.057, Insurance Code, is amended
600	600	to read as follows:
601	601	Sec. 801.057. FAILURE TO FILE ANNUAL OR QUARTERLY
602	602	STATEMENT: GROUND FOR REVOCATION OR SUSPENSION. A certificate of
603	603	authority of an insurer that fails to file an annual or quarterly
604	604	statement required by law is subject to being suspended or revoked
605	605	by the department.
606	606	SECTION 1.26. The heading to Chapter 802, Insurance Code,
607	607	is amended to read as follows:
608	608	CHAPTER 802. ANNUAL AND QUARTERLY STATEMENTS; ACCOUNTING AND
609	609	FINANCIAL STANDARDS [STATEMENT]
610	610	SECTION 1.27. Sections 802.001, 802.002, and 802.003,
611	611	Insurance Code, are amended to read as follows:
612	612	Sec. 802.001. APPLICABILITY OF CHAPTER [FORM OF ANNUAL
613	613	STATEMENT]. This chapter applies to all insurers and certain other
614	614	regulated entities authorized to engage in the business of
615	615	insurance in this state, including:
616	616	(1) life insurers;
617	617	(2) accident insurers;
618	618	(3) life and accident insurers;
619	619	(4) life and health insurers;
620	620	(5) accident and health insurers;
621	621	(6) life, accident, and health insurers;
622	622	(7) mutual life insurers;
623	623	(8) stipulated premium insurers;
624	624	(9) limited purpose subsidiary life insurance
625	625	companies under Subchapter I, Chapter 841;
626	626	(10) group hospital service corporations;
627	627	(11) fire insurers;
628	628	(12) fire and marine insurers;
629	629	(13) United States branches of alien insurers;
630	630	(14) Mexican casualty insurers;
631	631	(15) general casualty insurers;
632	632	(16) fire and casualty insurers;
633	633	(17) mutual insurers other than life;
634	634	(18) statewide mutual assessment companies;
635	635	(19) local mutual aid associations;
636	636	(20) mutual burial associations;
637	637	(21) exempt associations;
638	638	(22) county mutual insurers;
639	639	(23) Lloyd's plans;
640	640	(24) reciprocal and interinsurance exchanges;
641	641	(25) domestic risk retention groups;
642	642	(26) domestic joint underwriting associations;
643	643	(27) title insurers;
644	644	(28) fraternal benefit societies;
645	645	(29) farm mutual insurers;
646	646	(30) health maintenance organizations;
647	647	(31) nonprofit health corporations;
648	648	(32) nonprofit legal services corporations;
649	649	(33) the Texas Health Insurance Pool;
650	650	(34) the Texas Mutual Insurance Company;
651	651	(35) the Texas Windstorm Insurance Association; and
652	652	(36) the Texas FAIR Plan Association. [(a) The
653	653	commissioner, as necessary to obtain an accurate indication of the
654	654	company's condition and method of transacting business, may change
655	655	the form of any annual statement required to be filed by any kind of
656	656	insurance company.
657	657	[(b) The form may require only information that relates to
658	658	the business of the insurance company.]
659	659	Sec. 802.002. ANNUAL STATEMENT; QUARTERLY STATEMENT;
660	660	ACTUARIAL OPINION [REQUIRED]. (a) Insurers and other regulated
661	661	entities must properly report each calendar year to the department
662	662	and the National Association of Insurance Commissioners by
663	663	completing, in accordance with applicable instructions, due dates,
664	664	and rules, the appropriate paper copy annual and quarterly
665	665	statement blanks, other reporting forms, and electronic filings
666	666	specified in this section and applicable rules.
667	667	(b) Each insurer and other regulated entity authorized to
668	668	engage in the business of insurance in this state must file its
669	669	annual statement using:
670	670	(1) the annual statement blanks, the quarterly
671	671	statement blanks, the annual and quarterly supplemental reporting
672	672	forms, and the related instruction manuals as adopted and published
673	673	by the National Association of Insurance Commissioners each year;
674	674	and
675	675	(2) any reporting forms unique to this state required
676	676	by the commissioner by rule.
677	677	(c) If an insurer or other regulated entity fails to deliver
678	678	an annual or quarterly statement in a timely manner, the department
679	679	shall notify the insurer or other entity that the insurer or other
680	680	entity may not issue new insurance until the date the statement is
681	681	delivered to the department.
682	682	(d) In this section, "qualified actuary" means:
683	683	(1) a member in good standing of the American Academy
684	684	of Actuaries; or
685	685	(2) a person who has otherwise demonstrated actuarial
686	686	competence to the satisfaction of the commissioner or an insurance
687	687	regulatory official of another state in which the insurance company
688	688	is domiciled.
689	689	(e) [(b)] An insurer's or other regulated entity's
690	690	[insurance company's] annual statement must include a statement of
691	691	a qualified actuary, as prescribed by this section and applicable
692	692	rules, entitled "Statement of Actuarial Opinion," that:
693	693	(1) is located on or is attached to the first page of
694	694	the annual statement; and
695	695	(2) provides the opinion of the actuary relating to
696	696	policy reserves and other actuarial items for life insurance,
697	697	accident and health insurance, and annuities, or loss and loss
698	698	adjustment expense reserves for property and casualty risks, as
699	699	described in the annual statement instructions of the National
700	700	Association of Insurance Commissioners as appropriate for the type
701	701	of risks insured.
702	702	Sec. 802.003. FILING DATE OF ANNUAL OR QUARTERLY STATEMENT
703	703	DELIVERED BY POSTAL SERVICE. Except as otherwise specifically
704	704	provided, for an annual or quarterly statement that is required to
705	705	be filed in the offices of the commissioner and that is delivered by
706	706	the United States Postal Service to the offices of the commissioner
707	707	after the date on which the [annual] statement is required to be
708	708	filed, the date of filing is the date of:
709	709	(1) the postal service postmark stamped on the cover
710	710	in which the document is mailed; or
711	711	(2) any other evidence of mailing authorized by the
712	712	postal service reflected on the cover in which the document is
713	713	mailed.
714	714	SECTION 1.28. Sections 802.052, 802.053, 802.054, 802.055,
715	715	and 802.056, Insurance Code, are redesignated as Sections 802.004,
716	716	802.005, 802.006, 802.007, and 802.008, Insurance Code, and amended
717	717	to read as follows:
718	718	Sec. 802.004 [802.052]. CONCURRENT FILING WITH NATIONAL
719	719	ASSOCIATION OF INSURANCE COMMISSIONERS. (a) Each domestic,
720	720	foreign, or alien insurance company or other regulated entity to
721	721	which this chapter applies authorized to engage in the business of
722	722	insurance in this state shall file a copy of the company's annual
723	723	and quarterly statements [statement] with the National Association
724	724	of Insurance Commissioners at the time the company files the
725	725	statements [statement] with the commissioner.
726	726	(b) The statements [statement] required by Subsection (a)
727	727	must:
728	728	(1) meet requirements adopted by the commissioner,
729	729	including:
730	730	(A) a change in substance or form;
731	731	(B) an additional filing; and
732	732	(C) any requirement that the statement be in a
733	733	computer compatible format; and
734	734	(2) include the signed jurat page and the actuarial
735	735	opinion, as required by the jurisdiction in which the insurance
736	736	company is domiciled.
737	737	(c) The insurance company shall also file with the National
738	738	Association of Insurance Commissioners a copy of any amendment or
739	739	addition to the annual or quarterly statements [statement] that is
740	740	subsequently filed with the commissioner.
741	741	Sec. 802.005 [802.053]. EXEMPTION AUTHORITY. The
742	742	commissioner may exempt any class of insurance companies from the
743	743	requirements of this chapter [subchapter] if the commissioner
744	744	believes the information required under this chapter [subchapter]
745	745	will not be useful for regulatory purposes with respect to that
746	746	class.
747	747	Sec. 802.006 [802.054]. COMPLIANCE. The commissioner may
748	748	consider a foreign insurance company to be in compliance with the
749	749	requirements of Section 802.004 [802.052] if the company is
750	750	domiciled in a state with a law substantially similar to that
751	751	section.
752	752	Sec. 802.007 [802.055]. COSTS PAID BY INSURANCE COMPANY.
753	753	An insurance company shall pay all costs of preparing and
754	754	furnishing to the National Association of Insurance Commissioners
755	755	the information required under Section 802.004 [802.052],
756	756	including any related filing fees.
757	757	Sec. 802.008 [802.056]. STATUS OF REPORTS AND OTHER
758	758	INFORMATION. A report or any other information resulting from the
759	759	collection, review, analysis, and distribution of information
760	760	developed from the filing of annual statement convention blanks and
761	761	provided to the department by the National Association of Insurance
762	762	Commissioners is considered part of the process of examination of
763	763	insurance companies under this code, including Chapters 86, [and]
764	764	401, and 823.
765	765	SECTION 1.29. Chapter 802, Insurance Code, is amended by
766	766	adding Section 802.009 to read as follows:
767	767	Sec. 802.009. ADOPTION OF ACCOUNTING AND FINANCIAL
768	768	STANDARDS. (a) Each domestic, foreign, or alien insurance company
769	769	authorized to engage in the business of insurance in this state
770	770	shall use the applicable Accounting Practices and Procedures
771	771	Manual, Supplements, Amendments, and related guidance as adopted
772	772	and published by the National Association of Insurance
773	773	Commissioners each year, subject to any exceptions and
774	774	modifications prescribed by the commissioner by rule. The
775	775	department shall adopt the Accounting Practices and Procedures
776	776	Manual and related guidance as adopted and published by the
777	777	National Association of Insurance Commissioners each year, subject
778	778	to any exceptions and modifications prescribed by the commissioner
779	779	by rule, as the source of accounting principles for the department
780	780	when analyzing financial reports and for conducting statutory
781	781	examinations and rehabilitations of insurers and health
782	782	maintenance organizations authorized to engage in the business of
783	783	insurance in this state, except as otherwise provided by law.
784	784	(b) Each domestic, foreign, or alien insurance company
785	785	authorized to engage in the business of insurance in this state
786	786	shall use and comply with the Risk-Based Capital Report Including
787	787	Overview and Instructions for Companies, as appropriate based on
788	788	the particular line of business, and the risk-based capital
789	789	formulas contained in the report, as adopted and published by the
790	790	National Association of Insurance Commissioners annually, subject
791	791	to any exceptions and modifications prescribed by the commissioner
792	792	by rule. Each company subject to this subsection must file an
793	793	electronic version of the company's yearly Risk-Based Capital
794	794	Report and any supplemental forms and reports with the National
795	795	Association of Insurance Commissioners in accordance with and by
796	796	the due dates specified in the instructions.
797	797	(c) An insurer providing only casualty insurance as defined
798	798	by Chapter 822 may include in the insurer's assets, if the total
799	799	value of the equipment exceeds $2,000, the value of all electronic
800	800	machines that are part of a data processing system and of all other
801	801	office equipment, furniture, machines, and labor-saving devices
802	802	purchased for and used in connection with the business of the
803	803	insurer to the extent that the total actual cash market value of
804	804	those assets is less than five percent of the other admitted assets
805	805	of the insurer.
806	806	SECTION 1.30. The heading to Chapter 822, Insurance Code,
807	807	is amended to read as follows:
808	808	CHAPTER 822. GENERAL [INCORPORATION AND] REGULATORY
809	809	REQUIREMENTS FOR INSURANCE COMPANIES OTHER THAN LIFE,
810	810	HEALTH, OR ACCIDENT INSURANCE COMPANIES
811	811	SECTION 1.31. Sections 822.001 and 822.201, Insurance Code,
812	812	are amended to read as follows:
813	813	Sec. 822.001. APPLICABILITY OF CHAPTER. Except as
814	814	otherwise provided by this code, this chapter applies to [the
815	815	formation of] each company or organization engaging [that proposes
816	816	to engage] in any kind of insurance business other than a life,
817	817	health, or accident insurance company [organized or] operating
818	818	under Chapter 841, 881, 882, 884, 885, 886, 887, or 888.
819	819	Sec. 822.201. APPLICABILITY OF CAPITAL AND SURPLUS
820	820	REQUIREMENTS. The capital and surplus requirements of this chapter
821	821	and Chapter 801 apply to each insurance company or other entity,
822	822	other than a farm mutual insurance company, authorized to write
823	823	property and casualty insurance in this state including:
824	824	(1) a county mutual insurance company;
825	825	(2) a mutual insurance company, other than a mutual
826	826	life insurance company;
827	827	(3) a Lloyd's plan; and
828	828	(4) a reciprocal or interinsurance exchange.
829	829	SECTION 1.32. Section 822.206(a), Insurance Code, is
830	830	amended to read as follows:
831	831	(a) An insurance company may, on prior approval of the
832	832	department and subject to Chapter 823, purchase outstanding shares
833	833	of the company's capital stock in accordance with the Texas
834	834	Business Corporation Act either by making a tender offer or by
835	835	entering into a negotiated private transaction.
836	836	SECTION 1.33. Section 822.207(a), Insurance Code, is
837	837	amended to read as follows:
838	838	(a) On prior approval of the commissioner and subject to
839	839	Chapter 823, an insurance company, the capital stock of which is
840	840	listed on a national securities exchange, may purchase from time to
841	841	time outstanding shares of the company's capital stock on the open
842	842	market. The shares must be purchased:
843	843	(1) in the name of the company for its own account; and
844	844	(2) in accordance with the Texas Business Corporation
845	845	Act.
846	846	SECTION 1.34. Sections 822.212(a) and (b), Insurance Code,
847	847	are amended to read as follows:
848	848	(a) Notwithstanding Chapter 801 [Section 822.203], to
849	849	engage in the kinds of insurance business for which an insurance
850	850	company organized under this chapter holds a certificate of
851	851	authority in this state, an insurance company organized under this
852	852	chapter that on September 1, 2009, had less than the minimum amount
853	853	of capital and surplus required for a newly incorporated company
854	854	under Chapter 801 [Section 822.054] must:
855	855	(1) not later than December 31, 2010, have increased
856	856	the amount of its capital by at least 10 percent of the difference
857	857	between the amount of minimum capital required for a newly
858	858	incorporated company under former Section 822.054 and the amount of
859	859	the company's capital on December 31, 2009;
860	860	(2) not later than December 31, 2011, have increased
861	861	the amount of its capital by at least 20 percent of the difference
862	862	between the amount of minimum capital required for a newly
863	863	incorporated company under former Section 822.054 and the amount of
864	864	the company's capital on December 31, 2009;
865	865	(3) not later than December 31, 2012, have increased
866	866	the amount of its capital by at least 30 percent of the difference
867	867	between the amount of minimum capital required for a newly
868	868	incorporated company under former Section 822.054 and the amount of
869	869	the company's capital on December 31, 2009;
870	870	(4) not later than December 31, 2013, have increased
871	871	the amount of its capital by at least 40 percent of the difference
872	872	between the amount of minimum capital required for a newly
873	873	incorporated company under Chapter 801 [Section 822.054] and the
874	874	amount of the company's capital on December 31, 2009;
875	875	(5) not later than December 31, 2014, have increased
876	876	the amount of its capital by at least 50 percent of the difference
877	877	between the amount of minimum capital required for a newly
878	878	incorporated company under Chapter 801 [Section 822.054] and the
879	879	amount of the company's capital on December 31, 2009;
880	880	(6) not later than December 31, 2015, have increased
881	881	the amount of its capital by at least 60 percent of the difference
882	882	between the amount of minimum capital required for a newly
883	883	incorporated company under Chapter 801 [Section 822.054] and the
884	884	amount of the company's capital on December 31, 2009;
885	885	(7) not later than December 31, 2016, have increased
886	886	the amount of its capital by at least 70 percent of the difference
887	887	between the amount of minimum capital required for a newly
888	888	incorporated company under Chapter 801 [Section 822.054] and the
889	889	amount of the company's capital on December 31, 2009;
890	890	(8) not later than December 31, 2017, have increased
891	891	the amount of its capital by at least 80 percent of the difference
892	892	between the amount of minimum capital required for a newly
893	893	incorporated company under Chapter 801 [Section 822.054] and the
894	894	amount of the company's capital on December 31, 2009;
895	895	(9) not later than December 31, 2018, have increased
896	896	the amount of its capital by at least 90 percent of the difference
897	897	between the amount of minimum capital required for a newly
898	898	incorporated company under Chapter 801 [Section 822.054] and the
899	899	amount of the company's capital on December 31, 2009; and
900	900	(10) not later than December 31, 2019, have at least
901	901	the minimum amount of capital required under Chapter 801 [Section
902	902	822.054] for a newly incorporated company.
903	903	(b) An insurance company that on September 1, 2009, had less
904	904	than the minimum amount of capital and surplus required for a newly
905	905	incorporated company under former Section 822.054 shall
906	906	immediately increase the amount of its capital and surplus to an
907	907	amount equal to the required amount of capital and surplus under
908	908	Chapter 801 [Section 822.054] if there is:
909	909	(1) a change in the control of at least 50 percent of
910	910	the voting securities of the insurance company;
911	911	(2) a change in the control of at least 50 percent of
912	912	the voting securities of a holding company controlling the
913	913	insurance company; or
914	914	(3) a change in control of at least 50 percent by any
915	915	other method of control if the insurance company or holding company
916	916	is not controlled by voting securities.
917	917	SECTION 1.35. Chapter 822, Insurance Code, is amended by
918	918	adding Subchapter F to read as follows:
919	919	SUBCHAPTER F. PROVISIONS APPLICABLE TO CASUALTY COMPANIES
920	920	Sec. 822.251. DEFINITIONS. (a) In this subchapter,
921	921	"casualty company" means an insurer engaging in the business of
922	922	insurance under Chapter 801 that writes marine insurance, including
923	923	insurance against hazards and perils incident to war, or insures:
924	924	(1) a person against:
925	925	(A) bodily injury, disability, or death that
926	926	results from an accident; or
927	927	(B) disability that results from disease;
928	928	(2) against loss or damage that results from an
929	929	accident or injury sustained by:
930	930	(A) an employee or other person, for which
931	931	accident or injury the insured is liable; or
932	932	(B) a person, for which loss the insured is
933	933	liable, other than employers liability insurance under Paragraph
934	934	(A);
935	935	(3) against loss or damage by:
936	936	(A) burglary, theft, or housebreaking; or
937	937	(B) water to goods or premises that arises from
938	938	the breakage or leakage of a sprinkler or water pipe;
939	939	(4) glass against breakage;
940	940	(5) a steam boiler, elevator, electrical device, or
941	941	engine and any machinery or appliance used or operated in
942	942	connection with a steam boiler, elevator, electrical device, or
943	943	engine;
944	944	(6) against loss or damage from injury to a person or
945	945	property that results accidentally from an item described by
946	946	Subdivision (5);
947	947	(7) against loss that:
948	948	(A) results from accidental damage to an
949	949	automobile; or
950	950	(B) is caused accidentally by an automobile;
951	951	(8) a person, association, or corporation against loss
952	952	or damage that results from giving or extending credit;
953	953	(9) against loss that results from the nonpayment of
954	954	the principal of or interest on a bond, mortgage, or other evidence
955	955	of indebtedness; or
956	956	(10) against any other casualty or insurance risk,
957	957	other than fire or life insurance, specified in the company's
958	958	articles of incorporation that:
959	959	(A) may be lawfully made the subject of
960	960	insurance; and
961	961	(B) is not otherwise provided for by this
962	962	chapter.
963	963	(b) A casualty company may insure one or more risks listed
964	964	in Subsection (a).
965	965	SECTION 1.36. Section 861.154, Insurance Code, is
966	966	transferred to Subchapter F, Chapter 822, Insurance Code, as added
967	967	by this Act, redesignated as Section 822.252, Insurance Code, and
968	968	amended to read as follows:
969	969	Sec. 822.252 [861.154]. DIVIDENDS. Except as authorized by
970	970	Sections 403.001 and 403.051, the directors of a [general] casualty
971	971	company may not issue dividends.
972	972	SECTION 1.37. Section 861.251, Insurance Code, is
973	973	transferred to Subchapter F, Chapter 822, Insurance Code, as added
974	974	by this Act, redesignated as Section 822.253, Insurance Code, and
975	975	amended to read as follows:
976	976	Sec. 822.253 [861.251]. MINIMUM CAPITAL AND SURPLUS. (a)
977	977	[A general casualty company must have at least the minimum capital
978	978	and surplus applicable to casualty, fidelity, guaranty, surety, and
979	979	trust companies under Sections 822.054, 822.210, and 822.211. At
980	980	the time of incorporation, the required capital and surplus must be
981	981	in cash.
982	982	[(b)] After incorporation and issuance of a certificate of
983	983	authority, a [general] casualty company shall invest the minimum
984	984	capital and surplus as provided by Section 801.023 [822.204]. The
985	985	company shall invest all other funds [of the company] in excess of
986	986	the minimum capital and surplus as provided by:
987	987	(1) a provision of Subchapter B, Chapter 424, other
988	988	than Section 424.052, 424.072, or 424.073; and
989	989	(2) Section 862.002.
990	990	(b) [(c)] A [general] casualty company may not loan any part
991	991	of the company's capital or paid in surplus to an officer of the
992	992	company.
993	993	SECTION 1.38. Section 861.255, Insurance Code, is
994	994	transferred to Subchapter F, Chapter 822, Insurance Code, as added
995	995	by this Act, redesignated as Section 822.254, Insurance Code, and
996	996	amended to read as follows:
997	997	Sec. 822.254 [861.255]. RULES REGARDING CERTAIN ASSETS.
998	998	(a) The value of the electronic machines and systems, office
999	999	equipment, furniture, other machines, and labor-saving devices
1000	1000	specified in Chapter 802 [Section 861.254(c)(9), as determined
1001	1001	under this section] and in accordance with rules adopted by the
1002	1002	commissioner[,] is an admitted asset of the company.
1003	1003	(b) The commissioner may adopt rules:
1004	1004	(1) defining electronic machines and systems, office
1005	1005	equipment, furniture, other machines, and labor-saving devices as
1006	1006	specified in Chapter 802; [Section 861.254(c)(9)] and
1007	1007	(2) stating the maximum period for which each class of
1008	1008	equipment may be amortized.
1009	1009	SECTION 1.39. Section 861.258, Insurance Code, is
1010	1010	transferred to Subchapter F, Chapter 822, Insurance Code, as added
1011	1011	by this Act, redesignated as Section 822.255, Insurance Code, and
1012	1012	amended to read as follows:
1013	1013	Sec. 822.255 [861.258]. REAL PROPERTY. (a) A [general]
1014	1014	casualty company is subject to Section 862.002 and may not
1015	1015	purchase, hold, or convey real property except as authorized by
1016	1016	that section.
1017	1017	(b) A [general] casualty company shall sell real property
1018	1018	acquired in compliance with Subsection (a) not later than the 10th
1019	1019	anniversary of the date the real property was acquired.
1020	1020	(c) A [general] casualty company may retain real property
1021	1021	after the date specified by Subsection (b) if the commissioner
1022	1022	issues a certificate stating:
1023	1023	(1) that sale of the real property in compliance with
1024	1024	Subsection (b) would cause the company to incur a material loss; and
1025	1025	(2) a later date by which the real property must be
1026	1026	sold.
1027	1027	(d) Subsection (b) does not apply to:
1028	1028	(1) real property occupied by buildings used in whole
1029	1029	or in part by a [general] casualty company in the transaction of
1030	1030	business;
1031	1031	(2) an interest in minerals or royalty reserved on the
1032	1032	sale of real property acquired under Sections 862.002(c)(1)-(3);
1033	1033	and
1034	1034	(3) investment real property acquired under Section
1035	1035	424.064.
1036	1036	SECTION 1.40. Section 861.701, Insurance Code, is
1037	1037	transferred to Subchapter F, Chapter 822, Insurance Code, as added
1038	1038	by this Act, redesignated as Section 822.256, Insurance Code, and
1039	1039	amended to read as follows:
1040	1040	Sec. 822.256 [861.701]. REVOCATION OF CERTIFICATE. (a)
1041	1041	If, as a result of an examination under Section 801.027 [861.257],
1042	1042	the commissioner determines that a [general] casualty company has
1043	1043	not complied with this chapter, the commissioner shall:
1044	1044	(1) revoke the company's certificate of authority; and
1045	1045	(2) notify the attorney general of the revocation.
1046	1046	(b) On receipt of notification under Subsection (a)(2), the
1047	1047	attorney general shall request court appointment of a receiver for
1048	1048	the [general] casualty company. Under the direction of the court,
1049	1049	the receiver shall wind up the affairs of the company.
1050	1050	SECTION 1.41. Section 861.702, Insurance Code, is
1051	1051	transferred to Subchapter F, Chapter 822, Insurance Code, as added
1052	1052	by this Act, redesignated as Section 822.257, Insurance Code, and
1053	1053	amended to read as follows:
1054	1054	Sec. 822.257 [861.702]. PENALTY. A [general] casualty
1055	1055	company that engages in the business of insurance without a
1056	1056	certificate of authority issued under Chapter 801 [violates Section
1057	1057	861.101] is subject to a penalty of $100 for each day the company
1058	1058	writes new business in this state without the certificate of
1059	1059	authority required by that chapter [section].
1060	1060	SECTION 1.42. Section 861.703, Insurance Code, is
1061	1061	transferred to Subchapter F, Chapter 822, Insurance Code, as added
1062	1062	by this Act, redesignated as Section 822.258, Insurance Code, and
1063	1063	amended to read as follows:
1064	1064	Sec. 822.258 [861.703]. COLLECTION OF PENALTY. (a) The
1065	1065	attorney general or a district or county attorney under the
1066	1066	direction of the attorney general may file an action in the name of
1067	1067	the state to collect a penalty under this subchapter [chapter].
1068	1068	(b) An action filed under this section must be filed in
1069	1069	Travis County or in the county in which the [general] casualty
1070	1070	company's principal office is located.
1071	1071	SECTION 1.43. Section 861.252, Insurance Code, is
1072	1072	transferred to Subchapter F, Chapter 822, Insurance Code, as added
1073	1073	by this Act, redesignated as Section 822.259, Insurance Code, and
1074	1074	amended to read as follows:
1075	1075	Sec. 822.259 [861.252]. SECURITY DEPOSIT. (a) [On
1076	1076	granting of the charter to a general casualty company, the company
1077	1077	shall deposit with the comptroller $50,000 in:
1078	1078	[(1) cash; or
1079	1079	[(2) securities of the kind described by a provision
1080	1080	of Subchapter B, Chapter 424, other than Section 424.052, 424.072,
1081	1081	or 424.073.
1082	1082	[(b)] If, as a prerequisite to engaging in the business of
1083	1083	insurance in another state, country, or province, a [general]
1084	1084	casualty company is required to deposit securities or cash with the
1085	1085	appropriate officer of that state, country, or province, or with
1086	1086	the comptroller, [securities or cash in excess of the deposit made
1087	1087	under Subsection (a),] the company may deposit with the comptroller
1088	1088	any authorized securities or cash sufficient to meet the
1089	1089	requirement. The comptroller shall receive and hold the deposit
1090	1090	exclusively for the protection of policyholders of the company.
1091	1091	(b) [(c)] A [general] casualty company may withdraw a
1092	1092	deposit made under Subsection (a) [(b)] if the company files with
1093	1093	the department satisfactory evidence, as determined by the
1094	1094	commissioner, that the company:
1095	1095	(1) has withdrawn from business in the other state,
1096	1096	country, or province; and
1097	1097	(2) has no unsecured liabilities outstanding in the
1098	1098	other state, country, or province.
1099	1099	(c) [(d)] A [general] casualty company may change the
1100	1100	company's securities on deposit with the comptroller by withdrawing
1101	1101	those securities and substituting an equal amount of other
1102	1102	securities that meet the requirements to engage in the business of
1103	1103	insurance in the relevant state, country, or province [authorized
1104	1104	by Subsection (a)].
1105	1105	SECTION 1.44. Sections 841.002 and 841.003, Insurance Code,
1106	1106	are amended to read as follows:
1107	1107	Sec. 841.002. APPLICABILITY OF CHAPTER AND OTHER LAW.
1108	1108	Except as otherwise expressly provided by this code, each insurance
1109	1109	company incorporated or engaging in business in this state as a life
1110	1110	insurance company, an accident insurance company, a life and
1111	1111	accident insurance company, a health and accident insurance
1112	1112	company, or a life, health, and accident insurance company is
1113	1113	subject to:
1114	1114	(1) this chapter and Chapter 801;
1115	1115	(2) Chapter 3;
1116	1116	(3) Chapters 425 and 492;
1117	1117	(4) Title 7;
1118	1118	(5) Sections 1202.051, 1204.151, 1204.153, and
1119	1119	1204.154;
1120	1120	(6) Subchapter A, Chapter 1202, Subchapters A and F,
1121	1121	Chapter 1204, Subchapter A, Chapter 1273, Subchapters A, B, and D,
1122	1122	Chapter 1355, and Subchapter A, Chapter 1366;
1123	1123	(7) Subchapter A, Chapter 1507;
1124	1124	(8) Chapters 1203, 1210, 1251-1254, 1301, 1351, 1354,
1125	1125	1359, 1364, 1368, 1505, 1506, 1651, 1652, and 1701; and
1126	1126	(9) Chapter 177, Local Government Code.
1127	1127	Sec. 841.003. APPLICABILITY OF LAW GOVERNING CORPORATIONS.
1128	1128	An insurance company operating under this chapter is subject to the
1129	1129	Texas Business Organizations Code [Corporation Act, the Texas
1130	1130	Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
1131	1131	Vernon's Texas Civil Statutes),] and any other law of this state
1132	1132	that governs corporations in general to the extent those laws are
1133	1133	not inconsistent with this chapter or another law described by
1134	1134	Section 841.002.
1135	1135	SECTION 1.45. Section 841.104, Insurance Code, is
1136	1136	transferred to Subchapter A, Chapter 841, Insurance Code, and
1137	1137	redesignated as Section 841.005, Insurance Code, to read as
1138	1138	follows:
1139	1139	Sec. 841.005 [841.104]. TAX PAYMENT REQUIRED FOR ISSUANCE
1140	1140	OF CERTAIN CERTIFICATES OF AUTHORITY. (a) This section applies to
1141	1141	a life insurance company that:
1142	1142	(1) has previously held a certificate of authority to
1143	1143	engage in the business of life insurance in this state;
1144	1144	(2) ceased to write new business in this state under
1145	1145	that certificate of authority; and
1146	1146	(3) after ceasing to write new business, continued to
1147	1147	collect from residents of this state renewal or other premiums on
1148	1148	policies written under that certificate of authority.
1149	1149	(b) A life insurance company to which this section applies
1150	1150	may not obtain a new certificate of authority to engage in the
1151	1151	business of life insurance in this state until the company:
1152	1152	(1) files with the department under oath a report that
1153	1153	discloses the gross amount of renewal or other premiums received
1154	1154	each calendar year from residents of this state after the period
1155	1155	covered by the company's last tax report of gross premium receipts
1156	1156	filed under this code; and
1157	1157	(2) pays to the state occupation taxes on those
1158	1158	premiums.
1159	1159	(c) The life insurance company shall pay the occupation tax
1160	1160	for each year of nonpayment. The company shall pay the tax for each
1161	1161	year at the same rate for that year as a company engaged in the
1162	1162	business of life insurance in this state during that year.
1163	1163	(d) The life insurance company shall remit the penalties for
1164	1164	failure to pay the taxes and file required reports when the company
1165	1165	pays the taxes and receives a certificate of authority.
1166	1166	SECTION 1.46. Section 841.201, Insurance Code, is amended
1167	1167	to read as follows:
1168	1168	Sec. 841.201. FORM OF REQUIRED CAPITAL AND SURPLUS.
1169	1169	Notwithstanding any other provision of this code, [after a charter
1170	1170	is granted under this chapter,] the domestic insurance company:
1171	1171	(1) shall maintain the company's minimum capital at
1172	1172	all times in a form described by Chapter 801 [Section 841.054(c)];
1173	1173	and
1174	1174	(2) may invest the company's surplus as provided by
1175	1175	this code.
1176	1176	SECTION 1.47. Sections 841.256 and 841.257, Insurance Code,
1177	1177	are amended to read as follows:
1178	1178	Sec. 841.256. BUSINESS IN SEPARATE DEPARTMENTS OF DOMESTIC
1179	1179	INSURANCE COMPANY. A domestic insurance company may not transact
1180	1180	more than one of the following kinds of insurance business
1181	1181	[described by Section 841.051(a)] unless the company establishes
1182	1182	separate departments to transact each kind of business:
1183	1183	(1) life insurance;
1184	1184	(2) accident insurance; and
1185	1185	(3) health insurance.
1186	1186	Sec. 841.257. KINDS OF BUSINESS LIMITED. An insurance
1187	1187	company authorized to engage in the business of insurance under
1188	1188	Chapter 801 and operating under this chapter [or in accordance with
1189	1189	Section 982.051] may not accept a risk or write an insurance policy
1190	1190	in this state or any other state or country other than:
1191	1191	(1) a life, accident, or health insurance policy;
1192	1192	(2) reinsurance under Sections 492.051(b) and (c) or
1193	1193	Chapter 493 by a life insurance company authorized to engage in the
1194	1194	business of insurance in this state; or
1195	1195	(3) reinsurance under Chapter 494 by a domestic
1196	1196	insurance company.
1197	1197	SECTION 1.48. Section 882.001, Insurance Code, is amended
1198	1198	to read as follows:
1199	1199	Sec. 882.001. APPLICABILITY OF THIS CHAPTER AND OTHER LAW.
1200	1200	Except to the extent of any conflict with this chapter, a law
1201	1201	governing a company organized under Chapter 801 and operating under
1202	1202	Chapter 841 applies to a mutual life insurance company operating
1203	1203	[organized] under this chapter.
1204	1204	SECTION 1.49. Section 883.001(1), Insurance Code, is
1205	1205	amended to read as follows:
1206	1206	(1) "Domestic mutual insurance company" means a mutual
1207	1207	insurance company organized under Chapter 801 and operating under
1208	1208	this chapter.
1209	1209	SECTION 1.50. Section 883.163, Insurance Code, is amended
1210	1210	to read as follows:
1211	1211	Sec. 883.163. IMMEDIATE NOTIFICATION WHEN ASSETS ARE
1212	1212	INSUFFICIENT; EXAMINATION. The president and the secretary of a
1213	1213	mutual insurance company operating under this chapter [the law
1214	1214	providing for the incorporation of mutual fire, lightning, hail,
1215	1215	and storm insurance companies] shall immediately notify the
1216	1216	commissioner any time the admitted assets of the company are less
1217	1217	than the largest single risk for which the company is liable. The
1218	1218	commissioner may make an examination into the affairs of the
1219	1219	company as the commissioner considers best.
1220	1220	SECTION 1.51. Section 982.253(a), Insurance Code, is
1221	1221	amended to read as follows:
1222	1222	(a) If the commissioner determines from a statement filed
1223	1223	under Chapter 802 [Section 982.252] or any report that an alien
1224	1224	insurance company's trusteed surplus is less than the greater of
1225	1225	the minimum capital required of, or the minimum surplus required to
1226	1226	be maintained by, a domestic insurance company authorized to engage
1227	1227	in the same kinds of insurance, the commissioner shall:
1228	1228	(1) determine the amount of the impairment; and
1229	1229	(2) order the company, through its United States
1230	1230	manager or attorney, to eliminate the impairment within the period
1231	1231	designated by the commissioner.
1232	1232	ARTICLE 2. CONFORMING AMENDMENTS
1233	1233	SECTION 2.01. Section 34.004, Insurance Code, is amended to
1234	1234	read as follows:
1235	1235	Sec. 34.004. IMMUNITY FOR USE OF ANNUAL OR QUARTERLY
1236	1236	STATEMENT INFORMATION. (a) A person is not liable in a civil
1237	1237	action, including an action for libel or slander, for collecting,
1238	1238	reviewing, analyzing, disseminating, or reporting information
1239	1239	collected from annual or quarterly statements filed under Chapter
1240	1240	802 if the person is:
1241	1241	(1) the department, the commissioner, or an employee
1242	1242	of the department;
1243	1243	(2) a member or employee of or delegate to the National
1244	1244	Association of Insurance Commissioners or an authorized committee,
1245	1245	subcommittee, or task force of that association; or
1246	1246	(3) another person who is responsible for collecting,
1247	1247	reviewing, analyzing, and disseminating information from filed
1248	1248	annual statement convention blanks.
1249	1249	(b) Subsection (a) does not apply to a person who acts with
1250	1250	malice.
1251	1251	SECTION 2.02. Section 38.003(b), Insurance Code, is amended
1252	1252	to read as follows:
1253	1253	(b) For purposes of this section, "insurer" means a
1254	1254	reciprocal or interinsurance exchange, mutual insurance company,
1255	1255	capital stock company, county mutual insurance company, Lloyd's
1256	1256	plan, life, accident, or health or casualty insurance company,
1257	1257	health maintenance organization, mutual life insurance company,
1258	1258	mutual insurance company other than life, mutual, or natural
1259	1259	premium life insurance company, [general] casualty company,
1260	1260	fraternal benefit society, group hospital service company, or other
1261	1261	legal entity engaged in the business of insurance in this
1262	1262	state. The term includes an affiliate as described by Section
1263	1263	823.003(a) if that affiliate is authorized to write and is writing
1264	1264	insurance in this state.
1265	1265	SECTION 2.03. Section 222.001(a), Insurance Code, is
1266	1266	amended to read as follows:
1267	1267	(a) This chapter applies to any insurer, including a group
1268	1268	hospital service corporation, any health maintenance organization,
1269	1269	and any managed care organization that receives gross premiums or
1270	1270	revenues subject to taxation under Section 222.002, including
1271	1271	companies operating under Subchapter F, Chapter 822, or Chapter
1272	1272	841, 842, 843, [861,] 881, 882, 883, 884, 941, 942, 982, or 984,
1273	1273	Insurance Code, Chapter 533, Government Code, or Title XIX of the
1274	1274	federal Social Security Act.
1275	1275	SECTION 2.04. Section 401.001(4), Insurance Code, is
1276	1276	amended to read as follows:
1277	1277	(4) "Insurer" means an insurer authorized to engage in
1278	1278	business in this state, including:
1279	1279	(A) a life, health, or accident insurance
1280	1280	company;
1281	1281	(B) a fire and marine insurance company;
1282	1282	(C) a [general] casualty company;
1283	1283	(D) a title insurance company;
1284	1284	(E) a fraternal benefit society;
1285	1285	(F) a mutual life insurance company;
1286	1286	(G) a local mutual aid association;
1287	1287	(H) a statewide mutual assessment company;
1288	1288	(I) a mutual insurance company other than a
1289	1289	mutual life insurance company;
1290	1290	(J) a farm mutual insurance company;
1291	1291	(K) a county mutual insurance company;
1292	1292	(L) a Lloyd's plan;
1293	1293	(M) a reciprocal or interinsurance exchange;
1294	1294	(N) a group hospital service corporation;
1295	1295	(O) a stipulated premium company; and
1296	1296	(P) a nonprofit legal services corporation.
1297	1297	SECTION 2.05. Section 404.004, Insurance Code, is amended
1298	1298	to read as follows:
1299	1299	Sec. 404.004. CONSTRUCTION WITH LAW RELATING TO CAPITAL AND
1300	1300	SURPLUS. The commissioner's authority under Section 404.003 to
1301	1301	require an increase in an insurer's capital and surplus by
1302	1302	contribution, and any capital and surplus requirements imposed by
1303	1303	the commissioner under that section, prevail over:
1304	1304	(1) the capital and surplus requirements of:
1305	1305	(A) Sections 801.023, 801.024, 801.026, 822.201,
1306	1306	822.202 [822.054, 822.201-822.203], 822.205, 822.212
1307	1307	[822.210-822.212, 841.054], 841.201, [841.204, 841.205, 841.207,]
1308	1308	884.206, 884.308, and 884.309; and
1309	1309	(B) Subchapter G, Chapter 841;
1310	1310	(2) any other provision of this code or other law
1311	1311	establishing capital and surplus requirements for insurers; and
1312	1312	(3) any rule adopted under a law described by
1313	1313	Subdivision (1) or (2).
1314	1314	SECTION 2.06. Section 404.053(a), Insurance Code, is
1315	1315	amended to read as follows:
1316	1316	(a) The commissioner shall order an insurer to remedy an
1317	1317	impairment of the insurer's surplus, aggregate surplus, or
1318	1318	aggregate of guaranty fund and surplus, as applicable, by bringing
1319	1319	the surplus to an acceptable level specified by the commissioner,
1320	1320	or to cease engaging in business in this state, if the commissioner
1321	1321	determines that:
1322	1322	(1) the surplus required by Section 801.023 [822.054],
1323	1323	822.202, [822.203,] 822.205, [822.210, 822.211,] or 822.212 of a
1324	1324	stock insurance company engaged in the kind of insurance business
1325	1325	described by the company's certificate of authority:
1326	1326	(A) is impaired by more than 50 percent; or
1327	1327	(B) is less than the minimum level of surplus
1328	1328	required by risk-based capital and surplus rules adopted by the
1329	1329	commissioner; or
1330	1330	(2) the required aggregate of guaranty fund and
1331	1331	surplus of a Lloyd's plan, or the required aggregate surplus of a
1332	1332	reciprocal or interinsurance exchange or of a mutual company, other
1333	1333	than a life insurance company, engaged in the kind of insurance
1334	1334	business described by the insurer's certificate of authority:
1335	1335	(A) is impaired by more than 25 percent; or
1336	1336	(B) is less than the minimum level of surplus
1337	1337	required by risk-based capital and surplus rules adopted by the
1338	1338	commissioner.
1339	1339	SECTION 2.07. Section 424.001(2), Insurance Code, is
1340	1340	amended to read as follows:
1341	1341	(2) "Minimum capital and surplus" means the minimum
1342	1342	amount of capital stock and minimum amount of surplus required of an
1343	1343	insurer under Section 801.023 [822.054 or 822.210].
1344	1344	SECTION 2.08. Section 424.056(a), Insurance Code, is
1345	1345	amended to read as follows:
1346	1346	(a) Each insurer's board of directors, or, if the insurer
1347	1347	does not have a board of directors, the corresponding authority
1348	1348	designated by the insurer's charter, bylaws, or plan of operation,
1349	1349	shall adopt a written investment plan consistent with the
1350	1350	requirements of:
1351	1351	(1) this chapter;
1352	1352	(2) Sections 822.255 [822.204, 822.209, 861.258,] and
1353	1353	862.002; and
1354	1354	(3) other statutes governing investments by the
1355	1355	insurer.
1356	1356	SECTION 2.09. Section 424.058, Insurance Code, is amended
1357	1357	to read as follows:
1358	1358	Sec. 424.058. AUTHORIZED INVESTMENTS: FORM OF MINIMUM
1359	1359	CAPITAL AND SURPLUS. An insurer may invest the insurer's funds in
1360	1360	excess of minimum capital and surplus in any manner authorized by
1361	1361	Subchapter A-1, Chapter 801, [Section 822.204] for investment of
1362	1362	the insurer's minimum capital and surplus.
1363	1363	SECTION 2.10. Section 443.003, Insurance Code, is amended
1364	1364	to read as follows:
1365	1365	Sec. 443.003. COVERED PERSONS. The provisions of this
1366	1366	chapter apply to all:
1367	1367	(1) insurers who are doing or have done an insurance
1368	1368	business in this state and against whom claims arising from that
1369	1369	business may exist now or in the future and to all persons subject
1370	1370	to examination by the commissioner;
1371	1371	(2) insurers who purport to do an insurance business
1372	1372	in this state;
1373	1373	(3) insurers who have insureds resident in this state;
1374	1374	(4) other persons organized or doing insurance
1375	1375	business, or in the process of organizing with the intent to do
1376	1376	insurance business in this state;
1377	1377	(5) nonprofit health corporations and all fraternal
1378	1378	benefit societies subject to Chapters 844 and 885, respectively;
1379	1379	(6) title insurance companies subject to Title 11;
1380	1380	(7) health maintenance organizations subject to
1381	1381	Chapter 843; and
1382	1382	(8) surety and trust companies subject to Chapter 7,
1383	1383	[general] casualty companies subject to Subchapter F, Chapter 822
1384	1384	[861], statewide mutual assessment companies subject to Chapter
1385	1385	881, mutual insurance companies subject to Chapter 882 or 883,
1386	1386	local mutual aid associations subject to Chapter 886, burial
1387	1387	associations subject to Chapter 888, farm mutual insurance
1388	1388	companies subject to Chapter 911, county mutual insurance companies
1389	1389	subject to Chapter 912, Lloyd's plans subject to Chapter 941,
1390	1390	reciprocal or interinsurance exchanges subject to Chapter 942, and
1391	1391	fidelity, guaranty, and surety companies.
1392	1392	SECTION 2.11. Section 443.004(a)(13), Insurance Code, is
1393	1393	amended to read as follows:
1394	1394	(13) "Insolvency" or "insolvent" means an insurer:
1395	1395	(A) is unable to pay its obligations when they
1396	1396	are due;
1397	1397	(B) does not have admitted assets at least equal
1398	1398	to all its liabilities; or
1399	1399	(C) has a total adjusted capital that is less
1400	1400	than that required under:
1401	1401	(i) Chapter 801 [822], 841, or 843, as
1402	1402	applicable; or
1403	1403	(ii) applicable rules or guidelines adopted
1404	1404	by the commissioner under Section 801.024 [822.210, 841.205,] or
1405	1405	843.404.
1406	1406	SECTION 2.12. Section 464.052(b), Insurance Code, is
1407	1407	amended to read as follows:
1408	1408	(b) The commissioner may identify collected penalties to be
1409	1409	deposited into the fund account from:
1410	1410	(1) administrative penalties assessed by the
1411	1411	commissioner for violations of Chapter 101 or penalties under
1412	1412	Section 822.257 [861.702], including amounts collected through
1413	1413	state warrant holds;
1414	1414	(2) civil penalties assessed under Chapter 101 when
1415	1415	the commissioner is the party requesting penalties;
1416	1416	(3) administrative penalties assessed by the
1417	1417	commissioner against a person holding a certificate of authority,
1418	1418	license, registration, or other authorization to engage in the
1419	1419	business of insurance that is issued or recognized by the
1420	1420	commissioner for engaging in conduct outside the scope of the
1421	1421	person's certificate, license, registration, or authorization;
1422	1422	(4) administrative penalties assessed by the
1423	1423	commissioner against a person holding a certificate of authority,
1424	1424	license, registration, or authorization issued or recognized by the
1425	1425	commissioner for using unapproved forms, rates, or advertisements
1426	1426	if the forms, rates, or advertisements are required to be approved
1427	1427	by the commissioner before being used in this state; and
1428	1428	(5) forfeitures of bonds issued under Section 101.353
1429	1429	or 101.354.
1430	1430	SECTION 2.13. Section 541.082(a), Insurance Code, is
1431	1431	amended to read as follows:
1432	1432	(a) In this section, "insurer" includes:
1433	1433	(1) a life insurance company;
1434	1434	(2) a health insurance company;
1435	1435	(3) an accident insurance company;
1436	1436	(4) a [general] casualty company;
1437	1437	(5) a mutual life insurance company or other mutual
1438	1438	insurance company;
1439	1439	(6) a mutual or natural premium life insurance
1440	1440	company;
1441	1441	(7) a Lloyd's plan;
1442	1442	(8) a county mutual insurance company;
1443	1443	(9) a farm mutual insurance company;
1444	1444	(10) a reciprocal or interinsurance exchange;
1445	1445	(11) a fraternal benefit society;
1446	1446	(12) a local mutual aid association;
1447	1447	(13) a health maintenance organization;
1448	1448	(14) a group hospital service corporation; or
1449	1449	(15) a multiple employer welfare arrangement that
1450	1450	holds a certificate of coverage under Chapter 846.
1451	1451	SECTION 2.14. Section 544.101(1), Insurance Code, is
1452	1452	amended to read as follows:
1453	1453	(1) "Health benefit plan issuer" means an insurance
1454	1454	company, association, organization, group hospital service
1455	1455	corporation, or health maintenance organization that delivers or
1456	1456	issues for delivery an individual, group, blanket, or franchise
1457	1457	insurance policy or insurance agreement, a group hospital service
1458	1458	contract, or an evidence of coverage that provides health insurance
1459	1459	or health care benefits. The term includes:
1460	1460	(A) a life, health, and accident insurance
1461	1461	company operating under Chapter 841 or 982;
1462	1462	(B) a [general] casualty insurance company
1463	1463	operating under Subchapter F, Chapter 822 [861];
1464	1464	(C) a fraternal benefit society operating under
1465	1465	Chapter 885;
1466	1466	(D) a mutual life insurance company operating
1467	1467	under Chapter 882;
1468	1468	(E) a local mutual aid association operating
1469	1469	under Chapter 886;
1470	1470	(F) a statewide mutual assessment company
1471	1471	operating under Chapter 881;
1472	1472	(G) a mutual assessment company or mutual
1473	1473	assessment life, health, and accident association operating under
1474	1474	Chapter 887;
1475	1475	(H) a mutual insurance company operating under
1476	1476	Chapter 883 that writes coverage other than life insurance;
1477	1477	(I) a Lloyd's plan operating under Chapter 941;
1478	1478	(J) a reciprocal exchange operating under
1479	1479	Chapter 942; and
1480	1480	(K) a stipulated premium company operating under
1481	1481	Chapter 884.
1482	1482	SECTION 2.15. Section 803.001(1), Insurance Code, is
1483	1483	amended to read as follows:
1484	1484	(1) "Domestic company" means any entity licensed,
1485	1485	chartered, or organized under this code, including:
1486	1486	(A) a county mutual insurance company;
1487	1487	(B) a farm mutual insurance company;
1488	1488	(C) a fire and marine insurance company;
1489	1489	(D) a fraternal benefit society;
1490	1490	(E) a [general] casualty company;
1491	1491	(F) a group hospital service corporation;
1492	1492	(G) a health maintenance organization;
1493	1493	(H) a life, health, and accident insurance
1494	1494	company;
1495	1495	(I) a Lloyd's plan;
1496	1496	(J) a local mutual aid association;
1497	1497	(K) a mutual life insurance company;
1498	1498	(L) a mutual insurance company other than a
1499	1499	mutual life insurance company;
1500	1500	(M) a nonprofit legal services corporation;
1501	1501	(N) a reciprocal exchange;
1502	1502	(O) a statewide mutual assessment company;
1503	1503	(P) a stipulated premium insurance company;
1504	1504	(Q) a surety and trust company; and
1505	1505	(R) a title insurance company.
1506	1506	SECTION 2.16. Section 826.203, Insurance Code, is amended
1507	1507	to read as follows:
1508	1508	Sec. 826.203. APPLICABILITY OF CERTAIN LAWS;
1509	1509	INCORPORATION. A mutual holding company that results from the
1510	1510	reorganization of a domestic mutual insurance company operating
1511	1511	[organized] under Chapter 883 must be organized under Chapter 801
1512	1512	[Sections 883.051, 883.052, 883.054, and 883.056]. The articles of
1513	1513	incorporation, and any amendments to those articles, of the mutual
1514	1514	holding company are subject to approval of the commissioner in the
1515	1515	same manner as those of a mutual insurance company.
1516	1516	SECTION 2.17. Section 829.004(d), Insurance Code, is
1517	1517	amended to read as follows:
1518	1518	(d) A mutual holding company that results from a
1519	1519	reorganization of an exchange must be organized under Chapter 801
1520	1520	[Sections 883.051, 883.052, 883.054, and 883.056]. The articles
1521	1521	of incorporation of the mutual holding company, and any amendments
1522	1522	to those articles, are subject to approval of the commissioner in
1523	1523	the same manner as those of a mutual insurance company.
1524	1524	SECTION 2.18. Sections 841.301(a) and (c), Insurance Code,
1525	1525	are amended to read as follows:
1526	1526	(a) A domestic insurance company may not assume liability on
1527	1527	or indemnify one person for any risk under one or more accident,
1528	1528	health, or hospitalization insurance policies, or a combination of
1529	1529	those policies, in an amount that exceeds $10,000, unless the
1530	1530	amount of the issued, outstanding, and stated capital of the
1531	1531	company is at least equal to the minimum amount of capital required
1532	1532	for a newly incorporated company under Section 801.023 [841.054].
1533	1533	(c) A domestic insurance company that is exempt under
1534	1534	Subsection (b) shall maintain its issued, outstanding, and stated
1535	1535	capital in an amount that is at least $100,000 and is at least:
1536	1536	(1) the amount of capital held by the company on
1537	1537	December 31, 1991, plus 10 percent of the difference between that
1538	1538	amount and an amount equal to the minimum amount of capital required
1539	1539	for a newly incorporated company under former Section 841.054, if
1540	1540	the last date that the company writes a policy described by
1541	1541	Subsection (a) is during 1993;
1542	1542	(2) the amount of capital held by the company on
1543	1543	December 31, 1991, plus 20 percent of the difference between that
1544	1544	amount and an amount equal to the minimum amount of capital required
1545	1545	for a newly incorporated company under former Section 841.054, if
1546	1546	the last date that the company writes a policy described by
1547	1547	Subsection (a) is during 1994;
1548	1548	(3) the amount of capital held by the company on
1549	1549	December 31, 1991, plus 30 percent of the difference between that
1550	1550	amount and an amount equal to the minimum amount of capital required
1551	1551	for a newly incorporated company under former Section 841.054, if
1552	1552	the last date that the company writes a policy described by
1553	1553	Subsection (a) is during 1995;
1554	1554	(4) the amount of capital held by the company on
1555	1555	December 31, 1991, plus 40 percent of the difference between that
1556	1556	amount and an amount equal to the minimum amount of capital required
1557	1557	for a newly incorporated company under former Section 841.054, if
1558	1558	the last date that the company writes a policy described by
1559	1559	Subsection (a) is during 1996;
1560	1560	(5) the amount of capital held by the company on
1561	1561	December 31, 1991, plus 50 percent of the difference between that
1562	1562	amount and an amount equal to the minimum amount of capital required
1563	1563	for a newly incorporated company under former Section 841.054, if
1564	1564	the last date that the company writes a policy described by
1565	1565	Subsection (a) is during 1997;
1566	1566	(6) the amount of capital held by the company on
1567	1567	December 31, 1991, plus 60 percent of the difference between that
1568	1568	amount and an amount equal to the minimum amount of capital required
1569	1569	for a newly incorporated company under former Section 841.054, if
1570	1570	the last date that the company writes a policy described by
1571	1571	Subsection (a) is during 1998;
1572	1572	(7) the amount of capital held by the company on
1573	1573	December 31, 1991, plus 70 percent of the difference between that
1574	1574	amount and an amount equal to the minimum amount of capital required
1575	1575	for a newly incorporated company under former Section 841.054, if
1576	1576	the last date that the company writes a policy described by
1577	1577	Subsection (a) is during 1999;
1578	1578	(8) the amount of capital held by the company on
1579	1579	December 31, 1991, plus 80 percent of the difference between that
1580	1580	amount and an amount equal to the minimum amount of capital required
1581	1581	for a newly incorporated company under former Section 841.054, if
1582	1582	the last date that the company writes a policy described by
1583	1583	Subsection (a) is during 2000; and
1584	1584	(9) the amount of capital held by the company on
1585	1585	December 31, 1991, plus 90 percent of the difference between that
1586	1586	amount and an amount equal to the minimum amount of capital required
1587	1587	for a newly incorporated company under former Section 841.054, if
1588	1588	the last date that the company writes a policy described by
1589	1589	Subsection (a) is during 2001.
1590	1590	SECTION 2.19. Sections 843.155(c) and (d), Insurance Code,
1591	1591	are amended to read as follows:
1592	1592	(c) Sections 36.108 and 201.055 and Chapter 802 apply to the
1593	1593	annual and quarterly reports [report] of a health maintenance
1594	1594	organization.
1595	1595	(d) The annual and quarterly reports [report] filed by the
1596	1596	health maintenance organization shall be made publicly available on
1597	1597	the department's Internet website in a user-friendly format that
1598	1598	allows consumers to make direct comparisons of the financial and
1599	1599	other data reported by health maintenance organizations under this
1600	1600	section.
1601	1601	SECTION 2.20. Section 862.002(e), Insurance Code, is
1602	1602	amended to read as follows:
1603	1603	(e) Section 822.255 [861.258] applies to real property
1604	1604	acquired under Subsection (c)(1), (2), or (3).
1605	1605	SECTION 2.21. Section 862.151, Insurance Code, is amended
1606	1606	to read as follows:
1607	1607	Sec. 862.151. REDUCTION OF CAPITAL STOCK AND PAR VALUE OF
1608	1608	SHARES. (a) If the minimum surplus of a fire, marine, or inland
1609	1609	marine insurance company is impaired in excess of the amount
1610	1610	permitted under Subchapter B, Chapter 404, the commissioner may
1611	1611	allow the company to amend its charter [as provided by Sections
1612	1612	822.157 and 822.158] to reduce the amount of the company's capital
1613	1613	stock and the par value of its shares in proportion to the extent of
1614	1614	the permitted amount of impairment.
1615	1615	(b) A company acting under Subsection (a):
1616	1616	(1) [may not reduce the par value of its shares below
1617	1617	the sum computed under Section 822.055;
1618	1618	[(2)] may not deduct from the assets and property on
1619	1619	hand more than $125,000;
1620	1620	(2) [(3)] shall retain the remainder of the assets and
1621	1621	property on hand as surplus assets;
1622	1622	(3) [(4)] may not distribute any of the assets or
1623	1623	property to the shareholders; and
1624	1624	(4) [(5)] may not reduce the capital stock or surplus
1625	1625	of the company to an amount less than the minimum capital and the
1626	1626	minimum surplus required by Section [Sections] 822.202, [822.210,
1627	1627	and 822.211,] subject to Subchapter B, Chapter 404.
1628	1628	SECTION 2.22. Section 862.152(b), Insurance Code, is
1629	1629	amended to read as follows:
1630	1630	(b) The company shall promptly call on its shareholders for
1631	1631	an amount necessary to make the company's capital and surplus equal
1632	1632	to the amount required by Section 801.023 [Sections 822.054 and
1633	1633	822.210], subject to Subchapter B, Chapter 404.
1634	1634	SECTION 2.23. Section 862.153(a), Insurance Code, is
1635	1635	amended to read as follows:
1636	1636	(a) If a shareholder of the insurance company who is given
1637	1637	notice under Section 862.152 does not pay the amount called for by
1638	1638	the company under that section, the company may:
1639	1639	(1) require the return of the original certificate of
1640	1640	stock held by the shareholder; and
1641	1641	(2) issue a new certificate for a number of shares that
1642	1642	the shareholder may be entitled to in the proportion that the value
1643	1643	of the funds of the company, computed without inclusion of any money
1644	1644	or other property paid by shareholders in response to the notice
1645	1645	under Section 862.152, bears to the total amount of the original
1646	1646	capital and the minimum surplus of the company required by Section
1647	1647	801.023 [822.054 or 822.210], subject to Subchapter B, Chapter 404.
1648	1648	SECTION 2.24. Section 862.154, Insurance Code, is amended
1649	1649	to read as follows:
1650	1650	Sec. 862.154. CREATION AND DISPOSAL OF NEW STOCK. (a) A
1651	1651	fire, marine, or inland marine insurance company that complies with
1652	1652	Section 801.037 [Sections 822.155, 822.157, and 822.158] may:
1653	1653	(1) create new stock;
1654	1654	(2) dispose of the new stock according to applicable
1655	1655	law; and
1656	1656	(3) issue new certificates for the new stock.
1657	1657	(b) The insurance company shall sell any new stock created
1658	1658	under Subsection (a) for an amount sufficient to make up any
1659	1659	impairment of the company's required minimum capital and to make up
1660	1660	the surplus of the company as required by Section 801.023 [822.054
1661	1661	or 822.210], subject to Subchapter B, Chapter 404, but may not
1662	1662	impair the capital of the company.
1663	1663	SECTION 2.25. Section 882.201, Insurance Code, is amended
1664	1664	to read as follows:
1665	1665	Sec. 882.201. APPLICABILITY OF SUBCHAPTER. This subchapter
1666	1666	does not apply to a mutual life insurance company organized under
1667	1667	this chapter that has a surplus of at least the minimum amount of
1668	1668	capital and surplus required of a capital stock company under
1669	1669	Sections 801.023, 801.024 [841.054, 841.204, 841.205], 841.301,
1670	1670	and 841.302.
1671	1671	SECTION 2.26. Section 882.301(a), Insurance Code, is
1672	1672	amended to read as follows:
1673	1673	(a) A mutual life insurance company that engages in the
1674	1674	business of insurance in this state shall maintain an unencumbered
1675	1675	surplus of at least $100,000 that consists of cash or classes of
1676	1676	investment authorized by Section 801.023 [as provided by Section
1677	1677	882.055].
1678	1678	SECTION 2.27. Section 882.451, Insurance Code, is amended
1679	1679	to read as follows:
1680	1680	Sec. 882.451. APPLICABILITY OF CERTAIN PROVISIONS.
1681	1681	Sections 882.452, 882.453, and 882.454 do not apply to a mutual life
1682	1682	insurance company organized under this chapter that has a surplus
1683	1683	of at least the minimum amount of capital and surplus required of a
1684	1684	capital stock company under Sections 801.023, 801.024 [841.054,
1685	1685	841.204, 841.205], 841.301, and 841.302.
1686	1686	SECTION 2.28. Section 882.556(c), Insurance Code, is
1687	1687	amended to read as follows:
1688	1688	(c) At a meeting under Subsection (a), each policyholder[:
1689	1689	[(1) is entitled to the number of votes as provided by
1690	1690	Section 882.155; and
1691	1691	[(2)] may vote:
1692	1692	(1) [(A)] in person;
1693	1693	(2) [(B)] by written proxy; or
1694	1694	(3) [(C)] by mailed ballot.
1695	1695	SECTION 2.29. Section 882.701, Insurance Code, is amended
1696	1696	to read as follows:
1697	1697	Sec. 882.701. APPLICABILITY OF SUBCHAPTER. This subchapter
1698	1698	does not apply to a mutual life insurance company organized under
1699	1699	this chapter that has a surplus of at least the minimum amount of
1700	1700	capital and surplus required of a capital stock company under
1701	1701	Sections 801.023, 801.024 [841.054, 841.204, 841.205], 841.301,
1702	1702	and 841.302.
1703	1703	SECTION 2.30. Section 884.002(c), Insurance Code, is
1704	1704	amended to read as follows:
1705	1705	(c) The following provisions of this code apply to a
1706	1706	stipulated premium company:
1707	1707	(1) Article 21.47;
1708	1708	(2) Section 38.001;
1709	1709	(3) Chapter 86;
1710	1710	(4) Subchapter A, Chapter 401;
1711	1711	(5) Sections 401.051, 401.052, 401.054-401.062,
1712	1712	401.151, 401.152, 401.155, and 401.156;
1713	1713	(6) Sections 403.001, 403.052, and 403.102;
1714	1714	(7) Subchapter A, Chapter 404;
1715	1715	(8) Section 421.001;
1716	1716	(9) Subchapter D, Chapter 425;
1717	1717	(10) Chapter 443;
1718	1718	(11) Chapter 492, other than Sections 492.051(b) and
1719	1719	(c);
1720	1720	(12) Chapter 541;
1721	1721	(13) Sections 801.001 and 801.002 [801.001-801.002];
1722	1722	(14) Sections 801.052-801.055 [801.051-801.055];
1723	1723	(15) Section 801.057;
1724	1724	(16) Sections 801.101-801.102;
1725	1725	(17) Subchapter A, Chapter 821;
1726	1726	(18) Chapter 824;
1727	1727	(19) Chapter 828;
1728	1728	(20) Section 841.251;
1729	1729	(21) Section 841.259;
1730	1730	(22) Section 841.261;
1731	1731	(23) Section 841.703; and
1732	1732	(24) Chapter 4152.
1733	1733	SECTION 2.31. Section 884.402, Insurance Code, is amended
1734	1734	to read as follows:
1735	1735	Sec. 884.402. ADDITIONAL COVERAGE. A stipulated premium
1736	1736	company that, at the time it begins to issue coverages under this
1737	1737	subchapter, possesses the amounts of capital and unencumbered
1738	1738	surplus equal to or greater than the corresponding amounts required
1739	1739	for organization of a life and health company under Sections
1740	1740	801.023, 801.024 [841.052, 841.054, 841.204, 841.205], 841.301,
1741	1741	and 841.302 may, subject to Section 884.403:
1742	1742	(1) issue any kind of life insurance coverage
1743	1743	authorized by Chapter 3, 841, or 1701 or Title 7;
1744	1744	(2) issue any kind of health or accident insurance
1745	1745	coverage authorized by:
1746	1746	(A) Title 7;
1747	1747	(B) Chapter 3, 704, 841, 846, 982, 1201, 1202,
1748	1748	1203, 1210, 1251, 1252, 1253, 1254, 1301, 1351, 1354, 1359, 1364,
1749	1749	1368, 1501, 1504, 1505, 1506, 1552, 1575, 1576, 1579, 1581, 1625,
1750	1750	1651, 1652, or 1701;
1751	1751	(C) Chapter 492, other than Sections 492.051(b)
1752	1752	and (c);
1753	1753	(D) Subchapter B, Chapter 38, Subchapter D,
1754	1754	Chapter 425, Subchapter A or F, Chapter 1204, Subchapter A, Chapter
1755	1755	1273, Subchapter A, B, or D, Chapter 1355, Subchapter A, Chapter
1756	1756	1366, Subchapter A, Chapter 1507;
1757	1757	(E) Section 1204.151, 1204.153, 1204.154, or
1758	1758	1451.051; or
1759	1759	(F) Chapter 177, Local Government Code; or
1760	1760	(3) issue life insurance coverage through policies
1761	1761	without cash surrender values or nonforfeiture values and that
1762	1762	exceed $10,000 on one life.
1763	1763	SECTION 2.32. Sections 885.453(c) and (d), Insurance Code,
1764	1764	are amended to read as follows:
1765	1765	(c) If the fraternal benefit society is converting to a
1766	1766	mutual life insurance company:
1767	1767	(1) the resolution authorizing the conversion must
1768	1768	also state the amount of the unencumbered surplus;
1769	1769	(2) the amount and form of the unencumbered surplus
1770	1770	must comply with Sections [882.055,] 882.301(a), 882.302, 882.304,
1771	1771	and 882.404; and
1772	1772	(3) the conversion must comply with Chapter 801
1773	1773	[Sections 882.056(a) and (b), 882.057, 882.058, 882.059, and
1774	1774	882.101].
1775	1775	(d) If the fraternal benefit society is converting to an
1776	1776	incorporated stock company:
1777	1777	(1) the resolution authorizing the conversion must
1778	1778	also state:
1779	1779	(A) the amount of the surplus, the amount of
1780	1780	capital stock authorized, and the number of shares into which the
1781	1781	capital stock is divided; and
1782	1782	(B) the amount of capital stock to be immediately
1783	1783	paid in;
1784	1784	(2) the amounts and form of the surplus and capital
1785	1785	must comply with Sections 801.023, 801.024 [841.054, 841.055,
1786	1786	841.056, 841.057, 841.204, 841.205], 841.301, and 841.302; and
1787	1787	(3) the conversion must comply with Chapter 801
1788	1788	[Sections 841.058, 841.059(a)(1), 841.060, 841.061, 841.062, and
1789	1789	841.063].
1790	1790	SECTION 2.33. Section 887.003(b), Insurance Code, is
1791	1791	amended to read as follows:
1792	1792	(b) Except as provided by Section 887.004, this chapter
1793	1793	applies to insurance companies and associations, whether
1794	1794	incorporated or not:
1795	1795	(1) that issue policies or certificates of insurance
1796	1796	on the lives of individuals on a mutual assessment plan or that
1797	1797	provide health and accident benefits on a mutual assessment plan or
1798	1798	whose funds are derived from assessments on certificate holders or
1799	1799	members; and
1800	1800	(2) that are not governed by:
1801	1801	(A) Subchapter F, Chapter 882;
1802	1802	(B) Chapter 841, [861,] 882, 883, 885, 941, or
1803	1803	942; or
1804	1804	(C) [(B)] Chapter 5, Title 78, Revised Statutes,
1805	1805	as provided by Section 18, Chapter 40, Acts of the 41st Legislature,
1806	1806	1st Called Session, 1929, as amended by Section 1, Chapter 60,
1807	1807	General Laws, Acts of the 41st Legislature, 2nd Called Session,
1808	1808	1929.
1809	1809	SECTION 2.34. Section 887.504, Insurance Code, is amended
1810	1810	to read as follows:
1811	1811	Sec. 887.504. AMENDMENT OF CHARTER OR ARTICLES OF
1812	1812	ASSOCIATION REQUIRED. On authorization under Section 887.503, the
1813	1813	board of directors and officers of the association shall amend the
1814	1814	association's charter or articles of association to comply with
1815	1815	Chapter 801 as applicable to a stock legal reserve life insurance
1816	1816	company [Sections 841.051, 841.052, and 841.053].
1817	1817	SECTION 2.35. Section 911.001(c), Insurance Code, is
1818	1818	amended to read as follows:
1819	1819	(c) Except to the extent of any conflict with this chapter,
1820	1820	the following provisions apply to a farm mutual insurance company:
1821	1821	(1) Subchapter A, Chapter 32;
1822	1822	(2) Subchapter D, Chapter 36;
1823	1823	(3) Sections 31.002(2), 32.021(c), 32.023, 32.041,
1824	1824	33.002, 38.001, 81.001-81.004, 201.005, 201.055, 401.051, 401.052,
1825	1825	401.054-401.062, 401.103-401.106, 401.151, 401.152, 401.155,
1826	1826	401.156, 421.001, 801.052-801.055 [801.051-801.055], 801.057,
1827	1827	801.101, 801.102, [822.204,] 841.004, 841.251, 841.252, 862.101,
1828	1828	1806.001, 1806.101, 1806.103(b), and 1806.104-1806.107;
1829	1829	(4) Chapter 86;
1830	1830	(5) Subchapter A, Chapter 401;
1831	1831	(6) Subchapter B, Chapter 404;
1832	1832	(7) Chapter 422;
1833	1833	(8) Subchapter B, Chapter 424, other than Section
1834	1834	424.052, 424.072, or 424.073;
1835	1835	(9) Chapter 441;
1836	1836	(10) Chapter 443;
1837	1837	(11) Chapter 462;
1838	1838	(12) Chapter 481;
1839	1839	(13) Chapter 541;
1840	1840	(14) Chapter 802;
1841	1841	(15) Subchapter A, Chapter 805;
1842	1842	(16) Chapter 824; and
1843	1843	(17) Article 1.09-1.
1844	1844	SECTION 2.36. Section 911.101, Insurance Code, is amended
1845	1845	to read as follows:
1846	1846	Sec. 911.101. AUTHORITY TO ENGAGE IN BUSINESS. Except to
1847	1847	the extent of any conflict with this chapter, a farm mutual
1848	1848	insurance company must hold a certificate of authority under
1849	1849	Chapter 801 [Section 801.051] to engage in the business of
1850	1850	insurance in this state under this chapter.
1851	1851	SECTION 2.37. Section 911.308(c), Insurance Code, is
1852	1852	amended to read as follows:
1853	1853	(c) A company described by Subsection (b) shall invest the
1854	1854	minimum unencumbered surplus as provided by Subchapter A-1, Chapter
1855	1855	801 [Section 822.204]. The company may invest funds in excess of
1856	1856	the minimum unencumbered surplus as provided by the provisions of
1857	1857	Subchapter B, Chapter 424, other than Sections 424.052, 424.072,
1858	1858	and 424.073.
1859	1859	SECTION 2.38. Section 912.002(b), Insurance Code, is
1860	1860	amended to read as follows:
1861	1861	(b) A county mutual insurance company is subject to:
1862	1862	(1) Sections 38.001, 401.051, 401.052,
1863	1863	401.054-401.062, 401.151, 401.152, 401.155, 401.156, 501.159,
1864	1864	501.202, 501.203, [822.204,] 1806.001, 1806.101, 1806.103(b),
1865	1865	1806.104-1806.107, 2002.002, and 2002.005;
1866	1866	(2) Subchapter A, Chapter 86;
1867	1867	(3) Subchapter A, Chapter 401;
1868	1868	(4) the provisions of Subchapter B, Chapter 424, other
1869	1869	than Sections 424.052, 424.072, and 424.073;
1870	1870	(5) Chapters 221, 251, 252, 254, 541, and 2210; and
1871	1871	(6) Articles 5.39 and 5.40.
1872	1872	SECTION 2.39. Section 912.308, Insurance Code, is amended
1873	1873	to read as follows:
1874	1874	Sec. 912.308. AMOUNT AND INVESTMENT OF SURPLUS. (a) A
1875	1875	county mutual insurance company shall maintain an unencumbered
1876	1876	surplus which may be invested only as provided by Subchapter A-1,
1877	1877	Chapter 801 [in items listed in Section 822.204]. The unencumbered
1878	1878	surplus must be at least:
1879	1879	(1) $25,000, if the company is organized to write
1880	1880	insurance coverage locally in only the county of its domicile;
1881	1881	(2) $50,000, if the company is organized to write
1882	1882	insurance coverage in only the county of its domicile and any
1883	1883	adjacent county; or
1884	1884	(3) an amount equal to the aggregate of the minimum
1885	1885	capital and minimum surplus required under Sections 801.023 and
1886	1886	[822.054,] 822.202[, 822.210, and 822.211,] for a fire insurance
1887	1887	company if the county mutual insurance company is organized to
1888	1888	write insurance coverage statewide.
1889	1889	(b) Except as provided by Section 912.056, a county mutual
1890	1890	insurance company is subject to Subchapter B, Chapter 404, and
1891	1891	Section [Sections 822.203, 822.210, and] 822.212.
1892	1892	SECTION 2.40. Sections 941.003(b) and (d), Insurance Code,
1893	1893	are amended to read as follows:
1894	1894	(b) A Lloyd's plan is subject to:
1895	1895	(1) Subchapter A, Chapter 5, Chapter 254, Subchapters
1896	1896	A and B, Chapter 1806, and Subtitle C, Title 10;
1897	1897	(2) Articles 5.35, 5.39, and 5.40;
1898	1898	(3) Article 5.13-2, as provided by that article,
1899	1899	Chapter 2251, as provided by that chapter, and Chapter 2301, as
1900	1900	provided by that chapter;
1901	1901	(4) Chapters 251, 252, 402, 541, and 2253;
1902	1902	(5) Subchapter A, Chapter 401;
1903	1903	(6) Subchapter B, Chapter 404;
1904	1904	(7) Subchapter C, Chapter 1806; and
1905	1905	(8) Sections 38.001, 501.159, [822.203,] 822.205,
1906	1906	[822.210,] 822.212, 2002.005, 2002.051, and 2002.052.
1907	1907	(d) Underwriters and their attorney in fact are subject to
1908	1908	Sections 801.021, 801.031, 801.032 [822.051, 822.057, 822.058,
1909	1909	822.059, 822.060], and 822.201, except that:
1910	1910	(1) the articles of agreement executed by the
1911	1911	underwriters are instead of the articles of incorporation; and
1912	1912	(2) the aggregate of the guaranty fund and
1913	1913	unencumbered surplus of the Lloyd's plan constitutes capital
1914	1914	structure for purposes of Section 801.032 [822.060].
1915	1915	SECTION 2.41. Section 941.103, Insurance Code, is amended
1916	1916	to read as follows:
1917	1917	Sec. 941.103. ISSUANCE OF CERTIFICATE OF AUTHORITY. On
1918	1918	determination by the department that the underwriters and attorney
1919	1919	in fact have complied with the law, the department shall, in
1920	1920	accordance with Sections 801.001, 801.002, 801.052-801.055
1921	1921	[801.051-801.055], 801.057, and 801.101, issue a certificate of
1922	1922	authority to the attorney in fact.
1923	1923	SECTION 2.42. Section 941.204(a), Insurance Code, is
1924	1924	amended to read as follows:
1925	1925	(a) The minimum guaranty fund and surplus required of a
1926	1926	Lloyd's plan under Sections 801.023 [822.054], 822.202, [822.210,
1927	1927	822.211,] and 941.201 must be:
1928	1928	(1) in cash; or
1929	1929	(2) invested as provided by the[:
1930	1930	[(A) Section 822.204; or
1931	1931	[(B) any other] law governing the investment of
1932	1932	the capital stock and minimum surplus of a capital stock insurance
1933	1933	company engaged in the same kind of business.
1934	1934	SECTION 2.43. Section 941.353, Insurance Code, is amended
1935	1935	to read as follows:
1936	1936	Sec. 941.353. REQUIREMENTS OF CONVERSION PLAN. The
1937	1937	conversion plan must provide that a capital stock insurance company
1938	1938	will be formed in accordance with Chapter 822, except that:
1939	1939	(1) the company's required minimum capital and surplus
1940	1940	must equal the required minimum guaranty fund and surplus of the
1941	1941	Lloyd's plan;
1942	1942	(2) the company's assets may be in cash or in the form
1943	1943	of an investment lawfully held by the Lloyd's plan; and
1944	1944	(3) an original examination [under Section
1945	1945	822.058(b)] is not required unless directed by the commissioner.
1946	1946	SECTION 2.44. Sections 942.003(b) and (e), Insurance Code,
1947	1947	are amended to read as follows:
1948	1948	(b) An exchange is subject to:
1949	1949	(1) Subchapter A, Chapter 5, Chapter 254, Subchapters
1950	1950	A and B, Chapter 1806, and Subtitle C, Title 10;
1951	1951	(2) Articles 5.35, 5.39, and 5.40;
1952	1952	(3) Article 5.13-2, as provided by that article,
1953	1953	Chapter 2251, as provided by that chapter, and Chapter 2301, as
1954	1954	provided by that chapter;
1955	1955	(4) Chapters 402, 541, and 2253;
1956	1956	(5) Subchapter A, Chapter 401, and Sections 401.051,
1957	1957	401.052, 401.054-401.062 [401.054, 401.055, 401.056, 401.057,
1958	1958	401.058, 401.059, 401.060, 401.061, 401.062], 401.151, 401.152,
1959	1959	401.155, and 401.156;
1960	1960	(6) Subchapter B, Chapter 404;
1961	1961	(7) Subchapter C, Chapter 1806; and
1962	1962	(8) Sections 38.001, 501.159, [822.203,] 822.205,
1963	1963	[822.210,] 822.212, 822.254 [861.254(a)-(f), 861.255], 862.001(b),
1964	1964	862.003, 2002.002, 2002.005, 2002.051, and 2002.052.
1965	1965	(e) Subscribers and their attorney in fact are subject to
1966	1966	Sections 801.021, 801.031, 801.032 [822.051, 822.057-822.060], and
1967	1967	822.201, except that:
1968	1968	(1) the declaration of the subscribers prescribed by
1969	1969	Section 942.053 replaces the articles of incorporation; and
1970	1970	(2) the unencumbered surplus of the exchange
1971	1971	constitutes capital structure for purposes of Section 801.032
1972	1972	[822.060].
1973	1973	SECTION 2.45. Section 942.052(d), Insurance Code, is
1974	1974	amended to read as follows:
1975	1975	(d) Instead of a bond, an attorney in fact may deposit with
1976	1976	the appropriate official of the exchange's state of domicile cash
1977	1977	or securities of the kind in which a [general] casualty company is
1978	1978	authorized to invest its funds. The deposit must be made in the
1979	1979	same amount, and must be conditioned, approved, and payable in the
1980	1980	same manner, as a bond required under this section.
1981	1981	SECTION 2.46. Section 942.053(b), Insurance Code, is
1982	1982	amended to read as follows:
1983	1983	(b) The declaration must include:
1984	1984	(1) the name of the proposed exchange;
1985	1985	(2) the kinds of insurance to be provided under the
1986	1986	reciprocal or interinsurance contract;
1987	1987	(3) a copy of the form of the power of attorney or
1988	1988	other authorization of the attorney in fact under which the
1989	1989	insurance is to be provided;
1990	1990	(4) the location of each office from which the
1991	1991	reciprocal or interinsurance contracts are to be issued; and
1992	1992	(5) any other information prescribed by the
1993	1993	department[, including an affidavit comparable to the affidavit
1994	1994	prescribed by Section 822.057(a)(3)].
1995	1995	SECTION 2.47. Section 942.101(a), Insurance Code, is
1996	1996	amended to read as follows:
1997	1997	(a) An attorney in fact must hold a certificate of authority
1998	1998	issued by the department under Sections 801.001, 801.002,
1999	1999	801.052-801.055 [801.051-801.055], 801.057, 801.101, and 801.102.
2000	2000	A certificate of authority obtained in accordance with this section
2001	2001	authorizes the attorney in fact named in the certificate to
2002	2002	exercise all powers and perform all duties of an attorney in fact.
2003	2003	SECTION 2.48. Section 942.155(c), Insurance Code, is
2004	2004	amended to read as follows:
2005	2005	(c) An exchange shall maintain the required assets as to:
2006	2006	(1) minimum surplus requirements[, as provided by
2007	2007	Section 822.204]; and
2008	2008	(2) other funds, as provided by the provisions of
2009	2009	Subchapter B, Chapter 424, other than Sections 424.052, 424.072,
2010	2010	and 424.073.
2011	2011	SECTION 2.49. Section 961.002(b), Insurance Code, is
2012	2012	amended to read as follows:
2013	2013	(b) The following provisions of this code apply to a
2014	2014	nonprofit legal services corporation in the same manner that they
2015	2015	apply to an insurer or a person engaged in the business of
2016	2016	insurance, to the extent the provisions do not conflict with this
2017	2017	chapter:
2018	2018	(1) Articles 1.09-1 and 21.47;
2019	2019	(2) Sections 31.002, 31.004, 31.007, 31.021, 31.022,
2020	2020	31.023, 31.026, 31.027, 32.021, 32.022(a), 32.023, 33.002, 33.006,
2021	2021	36.108, 38.001, 81.004, 201.005, 201.055, 401.051, 401.052,
2022	2022	401.054-401.062, 401.103-401.106, 401.151, 401.152, 401.155,
2023	2023	401.156, 801.001, 801.002, 801.052-801.055 [801.051-801.055],
2024	2024	801.057, 801.101, 801.102, 841.251, and 841.252;
2025	2025	(3) Subchapter B, Chapter 31;
2026	2026	(4) Subchapters A and C, Chapter 32;
2027	2027	(5) Subchapter D, Chapter 36;
2028	2028	(6) Subchapter A, Chapter 401;
2029	2029	(7) Subchapter A, Chapter 542;
2030	2030	(8) Subchapter A, Chapter 805; and
2031	2031	(9) Chapters 86, 402, 441, 443, 481, 541, 802, and 824.
2032	2032	SECTION 2.50. Section 962.004, Insurance Code, is amended
2033	2033	to read as follows:
2034	2034	Sec. 962.004. APPLICABILITY OF OTHER LAW. An insurer
2035	2035	operating under this chapter is subject to the following
2036	2036	provisions, if not in conflict with this chapter:
2037	2037	(1) the other chapters of this code, including:
2038	2038	(A) Chapter 221;
2039	2039	(B) Chapter 281, other than any minimum capital
2040	2040	and surplus requirements specified in that chapter;
2041	2041	(C) Chapter 822, including Sections [822.203,]
2042	2042	822.205[, 822.210,] and 822.212; and
2043	2043	(D) [Chapter 861; and
2044	2044	[(E)] Chapter 402; and
2045	2045	(2) Section 171.0525, Tax Code.
2046	2046	SECTION 2.51. Section 962.054, Insurance Code, is amended
2047	2047	to read as follows:
2048	2048	Sec. 962.054. INSURERS NOT MEETING CERTAIN REQUIREMENTS.
2049	2049	To write the insurance coverages authorized by Section 962.101, a
2050	2050	domestic or foreign insurer that does not meet the requirements of
2051	2051	Sections 962.051 and 962.052 must comply with Chapter [Chapters]
2052	2052	822 [and 861].
2053	2053	SECTION 2.52. Section 962.055, Insurance Code, is amended
2054	2054	to read as follows:
2055	2055	Sec. 962.055. CAPITAL AND SURPLUS REQUIREMENTS. A domestic
2056	2056	or foreign insurer operating under this chapter shall maintain the
2057	2057	minimum capital and surplus required by Section [Sections] 801.023
2058	2058	[822.054, 822.210, and 822.211].
2059	2059	SECTION 2.53. Section 982.251, Insurance Code, is amended
2060	2060	to read as follows:
2061	2061	Sec. 982.251. TRUSTEED SURPLUS OF ALIEN INSURANCE COMPANY.
2062	2062	The total value of an alien insurance company's general state
2063	2063	deposits and trusteed assets less the total net amount of all the
2064	2064	company's liabilities and reserves in the United States[, as
2065	2065	determined in accordance with Section 982.252,] is the company's
2066	2066	trusteed surplus in the United States.
2067	2067	SECTION 2.54. Section 1102.001(2), Insurance Code, is
2068	2068	amended to read as follows:
2069	2069	(2) "Insurer" means any insurer, including a:
2070	2070	(A) life, accident, health, or casualty
2071	2071	insurance company;
2072	2072	(B) mutual life insurance company;
2073	2073	(C) mutual insurance company other than a life
2074	2074	insurance company;
2075	2075	(D) mutual or natural premium life insurance
2076	2076	company;
2077	2077	(E) [general] casualty company;
2078	2078	(F) Lloyd's plan or a reciprocal or
2079	2079	interinsurance exchange;
2080	2080	(G) fraternal benefit society; or
2081	2081	(H) group hospital service corporation.
2082	2082	SECTION 2.55. Section 1132.001(a), Insurance Code, is
2083	2083	amended to read as follows:
2084	2084	(a) In this section, "insurer" means:
2085	2085	(1) a life insurance company;
2086	2086	(2) an accident insurance company;
2087	2087	(3) a [general] casualty [insurance] company;
2088	2088	(4) a mutual life insurance company;
2089	2089	(5) a mutual or natural premium life insurance
2090	2090	company;
2091	2091	(6) a fraternal benefit society; or
2092	2092	(7) a local mutual aid association.
2093	2093	SECTION 2.56. Section 1152.107(b), Insurance Code, is
2094	2094	amended to read as follows:
2095	2095	(b) The company shall file the statement:
2096	2096	(1) on a form prescribed or approved by the
2097	2097	department; and
2098	2098	(2) simultaneously with the annual statement required
2099	2099	by Chapter 802 [Sections 841.255 and 882.003].
2100	2100	SECTION 2.57. Section 1201.003(b), Insurance Code, is
2101	2101	amended to read as follows:
2102	2102	(b) Except as otherwise provided by this chapter, this
2103	2103	chapter applies only to an individual accident and health insurance
2104	2104	policy delivered or issued for delivery by:
2105	2105	(1) a life, health, and accident insurance company;
2106	2106	(2) a mutual insurance company, including:
2107	2107	(A) a mutual life insurance company; and
2108	2108	(B) a mutual assessment life insurance company;
2109	2109	(3) a local mutual aid association;
2110	2110	(4) a mutual or natural premium life or casualty
2111	2111	insurance company;
2112	2112	(5) a [general] casualty company;
2113	2113	(6) a Lloyd's plan;
2114	2114	(7) a reciprocal or interinsurance exchange;
2115	2115	(8) a nonprofit hospital, medical, or dental service
2116	2116	corporation, including a corporation operating under Chapter 842;
2117	2117	or
2118	2118	(9) another insurer required by law to be authorized
2119	2119	by the department.
2120	2120	SECTION 2.58. Section 1204.051(6), Insurance Code, is
2121	2121	amended to read as follows:
2122	2122	(6) "Insurer" means an insurance company,
2123	2123	association, or organization authorized to engage in business in
2124	2124	this state under Subchapter F, Chapter 822, or Chapter 841, [861,]
2125	2125	881, 882, 883, 884, 885, 886, 887, 888, 941, 942, or 982.
2126	2126	SECTION 2.59. Section 1254.001(a), Insurance Code, is
2127	2127	amended to read as follows:
2128	2128	(a) In this section, "insurer" means:
2129	2129	(1) a life insurance company;
2130	2130	(2) a health insurance company;
2131	2131	(3) an accident insurance company;
2132	2132	(4) a [general] casualty company;
2133	2133	(5) a mutual life insurance company or other mutual
2134	2134	insurance company;
2135	2135	(6) a mutual or natural premium life insurance
2136	2136	company;
2137	2137	(7) a Lloyd's plan;
2138	2138	(8) a reciprocal or interinsurance exchange;
2139	2139	(9) a fraternal benefit society;
2140	2140	(10) a local mutual aid association; or
2141	2141	(11) a group hospital service corporation.
2142	2142	SECTION 2.60. Section 1273.001(3), Insurance Code, is
2143	2143	amended to read as follows:
2144	2144	(3) "Insurer" means an insurance company,
2145	2145	association, or organization authorized to engage in business in
2146	2146	this state under Subchapter F, Chapter 822, or Chapter 841, 842,
2147	2147	[861,] 881, 882, 883, 884, 885, 886, 887, 888, 941, 942, or 982.
2148	2148	SECTION 2.61. Section 1451.102, Insurance Code, is amended
2149	2149	to read as follows:
2150	2150	Sec. 1451.102. APPLICABILITY OF SUBCHAPTER. Except as
2151	2151	provided by this subchapter, this subchapter applies only to an
2152	2152	individual, group, blanket, or franchise insurance policy,
2153	2153	insurance agreement, or group hospital service contract that
2154	2154	provides health benefits, accident benefits, or health and accident
2155	2155	benefits for medical or surgical expenses incurred as a result of an
2156	2156	accident or sickness and that is delivered, issued for delivery, or
2157	2157	renewed in this state by any incorporated or unincorporated
2158	2158	insurance company, association, or organization, including:
2159	2159	(1) a fraternal benefit society operating under
2160	2160	Chapter 885;
2161	2161	(2) a [general] casualty company operating under
2162	2162	Subchapter F, Chapter 822 [861];
2163	2163	(3) a life, health, and accident insurance company
2164	2164	operating under Chapter 841 or 982;
2165	2165	(4) a Lloyd's plan operating under Chapter 941;
2166	2166	(5) a local mutual aid association operating under
2167	2167	Chapter 886;
2168	2168	(6) a mutual insurance company writing insurance other
2169	2169	than life insurance operating under Chapter 883;
2170	2170	(7) a mutual life insurance company operating under
2171	2171	Chapter 882;
2172	2172	(8) a reciprocal exchange operating under Chapter 942;
2173	2173	(9) a statewide mutual assessment company, mutual
2174	2174	assessment company, or mutual assessment life, health, and accident
2175	2175	association operating under Chapter 881 or 887; and
2176	2176	(10) a stipulated premium company operating under
2177	2177	Chapter 884.
2178	2178	SECTION 2.62. Section 1651.001(b), Insurance Code, is
2179	2179	amended to read as follows:
2180	2180	(b) This chapter applies only to a policy, certificate, or
2181	2181	evidence of coverage that is issued by:
2182	2182	(1) a capital stock insurance company, including a
2183	2183	life, health and accident, or [general] casualty [insurance]
2184	2184	company;
2185	2185	(2) a mutual life insurance company;
2186	2186	(3) a mutual assessment life insurance company,
2187	2187	including a statewide mutual assessment corporation, local mutual
2188	2188	aid association, and burial association;
2189	2189	(4) a mutual or mutual assessment association,
2190	2190	including an association subject to Section 887.101;
2191	2191	(5) a mutual insurance company other than a life
2192	2192	insurance company;
2193	2193	(6) a mutual or natural premium life or casualty
2194	2194	insurance company;
2195	2195	(7) a fraternal benefit society;
2196	2196	(8) a Lloyd's plan insurer;
2197	2197	(9) a reciprocal or interinsurance exchange;
2198	2198	(10) a nonprofit medical, hospital, or dental service
2199	2199	corporation, including a company subject to Chapter 842;
2200	2200	(11) a stipulated premium company;
2201	2201	(12) a health maintenance organization under Chapter
2202	2202	843; or
2203	2203	(13) another insurer required to be licensed by the
2204	2204	department.
2205	2205	SECTION 2.63. Section 1652.003, Insurance Code, is amended
2206	2206	to read as follows:
2207	2207	Sec. 1652.003. APPLICABILITY OF CHAPTER. This chapter
2208	2208	applies to an individual or group Medicare supplement benefit plan
2209	2209	delivered or issued for delivery in this state and, regardless of
2210	2210	the place where the plan was delivered or issued for delivery, a
2211	2211	certificate that was issued under a group Medicare supplement
2212	2212	benefit plan and delivered or issued for delivery in this state, if
2213	2213	the plan or certificate is issued by:
2214	2214	(1) a capital stock insurance company, including a
2215	2215	life, health and accident, and [general] casualty [insurance]
2216	2216	company;
2217	2217	(2) a mutual life insurance company;
2218	2218	(3) a mutual assessment life insurance company,
2219	2219	including a statewide mutual assessment company, local mutual aid
2220	2220	association, and burial association;
2221	2221	(4) a mutual or mutual assessment association of any
2222	2222	kind, including an association subject to Section 887.102;
2223	2223	(5) a mutual insurance company other than a life
2224	2224	insurance company;
2225	2225	(6) a mutual or natural premium life or casualty
2226	2226	insurance company;
2227	2227	(7) a fraternal benefit society;
2228	2228	(8) a Lloyd's plan;
2229	2229	(9) a reciprocal or interinsurance exchange;
2230	2230	(10) a nonprofit hospital, medical, or dental service
2231	2231	corporation, including a corporation operating under Chapter 842;
2232	2232	(11) a stipulated premium company;
2233	2233	(12) another insurer that by law is required to be
2234	2234	authorized by the department; or
2235	2235	(13) a health maintenance organization operating
2236	2236	under Chapter 843, to the extent required by federal law.
2237	2237	SECTION 2.64. Section 1701.003(a), Insurance Code, is
2238	2238	amended to read as follows:
2239	2239	(a) Except as provided by Subsection (b), this chapter
2240	2240	applies to any insurer that uses a document described by Section
2241	2241	1701.002 in this state, including:
2242	2242	(1) a life, accident, health, or casualty insurance
2243	2243	company;
2244	2244	(2) a mutual life insurance company;
2245	2245	(3) a mutual insurance company other than a mutual
2246	2246	life insurance company;
2247	2247	(4) a mutual or natural premium life insurance
2248	2248	company;
2249	2249	(5) a [general] casualty company;
2250	2250	(6) a Lloyd's plan;
2251	2251	(7) a reciprocal or interinsurance exchange;
2252	2252	(8) a fraternal benefit society; and
2253	2253	(9) a group hospital service corporation.
2254	2254	SECTION 2.65. Section 1701.057(c), Insurance Code, is
2255	2255	amended to read as follows:
2256	2256	(c) To enable the department to determine compliance with
2257	2257	Subsection (b), the commissioner:
2258	2258	(1) shall require an insurer to file the rates charged
2259	2259	by that insurer for individual accident and health insurance
2260	2260	policies; and
2261	2261	(2) may adopt and require an insurer to file in
2262	2262	conjunction with the annual statement required under Chapter 802
2263	2263	[Section 841.255, 982.101, or 982.103] a form for reporting the
2264	2264	insurer's experience on individual accident and health insurance
2265	2265	policy forms issued by the insurer.
2266	2266	SECTION 2.66. Section 2201.101, Insurance Code, is amended
2267	2267	to read as follows:
2268	2268	Sec. 2201.101. ELIGIBILITY REQUIREMENTS. Except as
2269	2269	otherwise provided by this chapter, a risk retention group that
2270	2270	applies to be chartered in this state must:
2271	2271	(1) be chartered and authorized to engage in the
2272	2272	business of insurance under Chapter 822, [861,] 883, or 942; and
2273	2273	(2) comply with all the laws, rules, and requirements,
2274	2274	including Chapter 804, applicable to insurers authorized to engage
2275	2275	in business under those chapters and with Subchapter D to the extent
2276	2276	those requirements do not limit the laws, rules, or requirements of
2277	2277	this state.
2278	2278	SECTION 2.67. Section 2201.104(a), Insurance Code, is
2279	2279	amended to read as follows:
2280	2280	(a) In addition to all other fees imposed on an insurer
2281	2281	chartered and authorized to engage in business under Chapter 822,
2282	2282	[861,] 883, or 942, a risk retention group chartered in this state
2283	2283	shall pay a filing fee in an amount not to exceed $1,000 as set by
2284	2284	rules adopted by the commissioner.
2285	2285	SECTION 2.68. Section 2201.209(a), Insurance Code, is
2286	2286	amended to read as follows:
2287	2287	(a) A risk retention group that is authorized to engage in
2288	2288	business in this state under Subchapter C or D and that violates
2289	2289	this chapter is subject to all sanctions and penalties applicable
2290	2290	to an insurer that holds a certificate of authority under Chapter
2291	2291	[Chapters] 822 [and 861], including revocation of the authority to
2292	2292	engage in business in this state.
2293	2293	SECTION 2.69. Sections 2551.001(a) and (c), Insurance Code,
2294	2294	are amended to read as follows:
2295	2295	(a) Except as provided by Subsection (c) and unless the
2296	2296	business of title insurance or title insurance companies are
2297	2297	expressly mentioned, the provisions of this code other than this
2298	2298	title do not apply to:
2299	2299	(1) a corporation incorporated or engaging in business
2300	2300	exclusively under this title; or
2301	2301	(2) any title insurance business engaged in by a
2302	2302	corporation created under[:
2303	2303	[(A)] Subdivision 57, Article 1302, Revised
2304	2304	Statutes, before repeal of that statute,[;
2305	2305	[(B) Chapter 861;] or
2306	2306	[(C)] any other law.
2307	2307	(c) To the extent applicable, the following provisions of
2308	2308	this code apply to a title insurance company:
2309	2309	(1) Articles 1.09-1 and 21.47;
2310	2310	(2) Subsection (b), Article 1.04D;
2311	2311	(3) Chapters 33, 82, 83, 84, 86, 102, 261, 281, 401,
2312	2312	402, 493, 494, 541, 547, 555, 701, 801, 802, 824, 828, 1805, and
2313	2313	2204;
2314	2314	(4) Chapter 31, other than Section 31.005;
2315	2315	(5) Chapter 32, other than Section 32.022(b);
2316	2316	(6) Chapter 36, other than Sections 36.003, 36.004,
2317	2317	and 36.101-36.105 [36.101-36.106];
2318	2318	(7) Subchapter A, Chapter 38;
2319	2319	(8) Subchapters A-G, Chapter 101;
2320	2320	(9) Chapter 982, other than Sections 982.003 and [,
2321	2321	982.051, 982.101, 982.105, 982.106(b),] 982.109[, and 982.113];
2322	2322	and
2323	2323	(10) Sections 37.052, 39.001, 39.002, 81.001, 81.002,
2324	2324	81.004, 201.004, 201.005, 201.051, 201.055, 403.001, 403.051,
2325	2325	403.101, 521.002-521.004, 801.021, 801.022(a)(1), (2), and (4),
2326	2326	801.031 except Subdivision (3), 801.032, 801.037, 801.053,
2327	2327	805.021, 822.001, [822.051, 822.052(1), (2), and (3), 822.053,
2328	2328	822.057, except Subsection (a)(4), 822.058, 822.059, 822.060,
2329	2329	822.155, 822.157, 822.158, except Subsection (a)(5),] 841.004,
2330	2330	841.251, 841.252(a)-(c), and 4001.103.
2331	2331	SECTION 2.70. Section 2703.001(a), Insurance Code, is
2332	2332	amended to read as follows:
2333	2333	(a) This section applies to a corporation organized under
2334	2334	this title, a foreign corporation, and, to the extent that the
2335	2335	corporation is engaged in the business of title insurance, a
2336	2336	corporation organized under another law, including[:
2337	2337	[(1)] Subdivision 57, Article 1302, Revised Statutes,
2338	2338	before repeal of that statute[; and
2339	2339	[(2) Chapter 861].
2340	2340	SECTION 2.71. Section 3502.152, Insurance Code, is amended
2341	2341	to read as follows:
2342	2342	Sec. 3502.152. CAPITAL AND SURPLUS REQUIREMENTS. An
2343	2343	insurer may not write mortgage guaranty insurance unless the
2344	2344	insurer has the minimum capital and surplus required [by Chapter
2345	2345	861] for a [general] casualty company under Subchapter F, Chapter
2346	2346	822.
2347	2347	SECTION 2.72. Section 3503.201, Insurance Code, is amended
2348	2348	to read as follows:
2349	2349	Sec. 3503.201. MERGER OR CONSOLIDATION OF CERTAIN
2350	2350	COMPANIES. When two or more companies authorized to write
2351	2351	fidelity, guaranty, and surety insurance in this state merge or
2352	2352	consolidate and, incident to the merger or consolidation, enter
2353	2353	into a total reinsurance contract under which the merged or ceding
2354	2354	company is dissolved and that company's assets are acquired and
2355	2355	liabilities are assumed by the new or surviving company, the
2356	2356	commissioner, on finding that the contracting companies have on
2357	2357	deposit with the comptroller two or more deposits made for the same
2358	2358	or similar purposes under former Article 7.03, repealed by Chapter
2359	2359	388, Acts of the 55th Legislature, Regular Session, 1957, [or]
2360	2360	under former Section 861.252, or under Section 822.259 shall
2361	2361	authorize the comptroller to:
2362	2362	(1) retain for a single purpose only the deposit of the
2363	2363	greatest amount and value; and
2364	2364	(2) permit the new or surviving company, on proper
2365	2365	showing that there is duplication of deposits and that the new or
2366	2366	surviving company is the owner of those deposits, to withdraw a
2367	2367	duplicate or excessive deposit.
2368	2368	SECTION 2.73. Section 4001.009(a), Insurance Code, is
2369	2369	amended to read as follows:
2370	2370	(a) As referenced in Section 4001.003(9), a reference to an
2371	2371	agent in the following laws includes a subagent without regard to
2372	2372	whether a subagent is specifically mentioned:
2373	2373	(1) Chapters 281, 402, 421-423, 441, 444, 461-463,
2374	2374	541-556, 558, 559, 703, 705, 821, 823-825, 827, 828, 844, 963, 1108,
2375	2375	1205-1208, 1211, 1213, 1214, 1352, 1353, 1357, 1358, 1360-1363,
2376	2376	1369, 1453-1455, 1503, 1550, [1801,] 1803, 2151-2154, 2201-2203,
2377	2377	2205-2213, 3501, 3502, 4007, 4102, and 4201-4203;
2378	2378	(2) Chapter 403, excluding Section 403.002;
2379	2379	(3) Subchapter A, Chapter 491;
2380	2380	(4) Subchapter C, Chapter 521;
2381	2381	(5) Subchapter A, Chapter 557;
2382	2382	(6) Subchapter B, Chapter 805;
2383	2383	(7) Subchapters D, E, and F, Chapter 982;
2384	2384	(8) Subchapter D, Chapter 1103;
2385	2385	(9) Subchapters B, C, D, and E, Chapter 1204,
2386	2386	excluding Sections 1204.153 and 1204.154;
2387	2387	(10) Subchapter B, Chapter 1366;
2388	2388	(11) Subchapters B, C, and D, Chapter 1367, excluding
2389	2389	Section 1367.053(c);
2390	2390	(12) Subchapters A, C, D, E, F, H, and I, Chapter 1451;
2391	2391	(13) Subchapter B, Chapter 1452;
2392	2392	(14) Sections 551.004, 841.303, 982.001, 982.002,
2393	2393	[982.004, 982.052, 982.102, 982.103, 982.104, 982.106,] 982.107,
2394	2394	982.108, 982.110, 982.111, 982.112, and 1802.001; and
2395	2395	(15) Chapter 107, Occupations Code.
2396	2396	SECTION 2.74. Section 4007.001, Insurance Code, is amended
2397	2397	to read as follows:
2398	2398	Sec. 4007.001. APPLICABILITY OF CHAPTER. This chapter
2399	2399	applies only to an insurance company authorized to engage in the
2400	2400	business of insurance in this state under:
2401	2401	(1) a provision of:
2402	2402	(A) Subchapter F, Chapter 822;
2403	2403	(B) Chapter 5, 1805, or 2171; or
2404	2404	(C) [(B)] Subtitle B, C, D, E, F, H, or I, Title
2405	2405	10; or
2406	2406	(2) Chapter [861,] 862, 883, 911, 912, 941, 942, 984,
2407	2407	or 3503.
2408	2408	SECTION 2.75. Section 1704.160(h), Occupations Code, is
2409	2409	amended to read as follows:
2410	2410	(h) The certificate of authority to do business in this
2411	2411	state issued [under Section 861.102, Insurance Code,] to an
2412	2412	applicant that is a corporation is conclusive evidence of:
2413	2413	(1) the sufficiency of the applicant's security; and
2414	2414	(2) the applicant's solvency and credits.
2415	2415	ARTICLE 3. REPEALER
2416	2416	SECTION 3.01. The following provisions of the Insurance
2417	2417	Code are repealed:
2418	2418	(1) Section 36.106;
2419	2419	(2) Section 492.053;
2420	2420	(3) Section 801.051;
2421	2421	(4) the heading to Subchapter D, Chapter 801;
2422	2422	(5) the heading to Subchapter A, Chapter 802;
2423	2423	(6) the heading to Subchapter B, Chapter 802;
2424	2424	(7) Section 802.051;
2425	2425	(8) Section 822.003;
2426	2426	(9) the heading to Subchapter B, Chapter 822;
2427	2427	(10) Section 822.055;
2428	2428	(11) Section 822.056;
2429	2429	(12) Section 822.058;
2430	2430	(13) Section 822.061;
2431	2431	(14) Subchapter C, Chapter 822;
2432	2432	(15) the heading to Subchapter D, Chapter 822;
2433	2433	(16) Section 822.151;
2434	2434	(17) Section 822.152;
2435	2435	(18) Section 822.153;
2436	2436	(19) Section 822.154;
2437	2437	(20) Section 822.156;
2438	2438	(21) Section 822.157;
2439	2439	(22) Section 822.158;
2440	2440	(23) Section 822.203;
2441	2441	(24) Section 822.204;
2442	2442	(25) Section 822.210;
2443	2443	(26) Section 822.211;
2444	2444	(27) the heading to Subchapter B, Chapter 841;
2445	2445	(28) Section 841.051;
2446	2446	(29) Section 841.052;
2447	2447	(30) Section 841.053;
2448	2448	(31) Section 841.055;
2449	2449	(32) Section 841.056;
2450	2450	(33) Section 841.057;
2451	2451	(34) Section 841.058;
2452	2452	(35) Section 841.059;
2453	2453	(36) Section 841.061;
2454	2454	(37) Section 841.062;
2455	2455	(38) Section 841.063;
2456	2456	(39) the heading to Subchapter C, Chapter 841;
2457	2457	(40) Section 841.101;
2458	2458	(41) Section 841.102;
2459	2459	(42) Section 841.103;
2460	2460	(43) Subchapter D, Chapter 841;
2461	2461	(44) Section 841.202;
2462	2462	(45) Section 841.203;
2463	2463	(46) Section 841.204;
2464	2464	(47) Section 841.255;
2465	2465	(48) the heading to Chapter 861;
2466	2466	(49) Subchapter A, Chapter 861;
2467	2467	(50) Subchapter B, Chapter 861;
2468	2468	(51) Subchapter C, Chapter 861;
2469	2469	(52) the heading to Subchapter D, Chapter 861;
2470	2470	(53) Section 861.151;
2471	2471	(54) Section 861.152;
2472	2472	(55) Section 861.153;
2473	2473	(56) Section 861.155;
2474	2474	(57) Subchapter E, Chapter 861;
2475	2475	(58) the heading to Subchapter F, Chapter 861;
2476	2476	(59) Section 861.253;
2477	2477	(60) Section 861.254;
2478	2478	(61) Section 861.256;
2479	2479	(62) Section 861.257;
2480	2480	(63) the heading to Subchapter O, Chapter 861;
2481	2481	(64) Section 882.002;
2482	2482	(65) Section 882.003;
2483	2483	(66) Subchapter B, Chapter 882;
2484	2484	(67) Subchapter C, Chapter 882;
2485	2485	(68) Subchapter D, Chapter 882;
2486	2486	(69) Subchapter B, Chapter 883;
2487	2487	(70) Subchapter C, Chapter 883;
2488	2488	(71) Section 883.151;
2489	2489	(72) Section 883.201;
2490	2490	(73) Section 883.202;
2491	2491	(74) Section 883.204;
2492	2492	(75) Subchapter O, Chapter 883;
2493	2493	(76) Section 982.004;
2494	2494	(77) Subchapter B, Chapter 982;
2495	2495	(78) Section 982.101;
2496	2496	(79) Section 982.102;
2497	2497	(80) Section 982.103;
2498	2498	(81) Section 982.104;
2499	2499	(82) Section 982.105;
2500	2500	(83) Section 982.106;
2501	2501	(84) Section 982.113;
2502	2502	(85) Section 982.252; and
2503	2503	(86) Section 982.306.
2504	2504	ARTICLE 4. EFFECTIVE DATE
2505	2505	SECTION 4.01. This Act takes effect immediately if it
2506	2506	receives a vote of two-thirds of all the members elected to each
2507	2507	house, as provided by Section 39, Article III, Texas Constitution.
2508	2508	If this Act does not receive the vote necessary for immediate
2509	2509	effect, this Act takes effect September 1, 2013.