Texas 2013 - 83rd Regular

Texas House Bill HB3460 Compare Versions

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

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Eiland (Senate Sponsor - Carona) H.B. No. 3460
2	2	(In the Senate - Received from the House May 6, 2013;
3	3	May 9, 2013, read first time and referred to Committee on Business
4	4	and Commerce; May 16, 2013, reported favorably by the following
5	5	vote: Yeas 8, Nays 0; May 16, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to the requirement that certain information be reported to
11	11	the Texas Department of Insurance and the confidentiality of that
12	12	information.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Section 823.011, Insurance Code, is amended by
15	15	amending Subsections (a) and (d) and adding Subsection (d-1) to
16	16	read as follows:
17	17	(a) This section applies only to information, including
18	18	documents and copies of documents, that is:
19	19	(1) reported or otherwise provided under Subchapter B
20	20	or C or Section 823.201(d) or (e);
21	21	(2) disclosed to the commissioner under Section
22	22	823.010; or
23	23	(3) obtained by or disclosed to the commissioner or
24	24	another person in the course of an examination or investigation
25	25	under Subchapter H.
26	26	(d) Except as provided by Subsection (e), if the recipient
27	27	of documents or other information agrees in writing to maintain the
28	28	confidential and privileged status of the documents or other
29	29	information, and verifies in writing the legal authority to
30	30	maintain the confidential and privileged status of the documents or
31	31	information, the commissioner or another person may disclose the
32	32	information to any of the following entities functioning in an
33	33	official capacity:
34	34	(1) a commissioner of insurance or an insurance
35	35	department of another state;
36	36	(2) an authorized law enforcement official;
37	37	(3) a district attorney of this state;
38	38	(4) the attorney general;
39	39	(5) a grand jury;
40	40	(6) members of a supervisory college described by
41	41	Section 823.0145; [or]
42	42	(7) the National Association of Insurance
43	43	Commissioners and its affiliates and subsidiaries; or
44	44	(8) another state, federal, or international
45	45	regulatory agency.
46	46	(d-1) The commissioner may receive documents or
47	47	information, including otherwise confidential and privileged
48	48	documents or information from the entities listed in Subsection
49	49	(d), and shall maintain as confidential or privileged any document
50	50	or information received by the commissioner with notice or an
51	51	understanding that the document or information is confidential or
52	52	privileged under the laws of the jurisdiction of the entity that
53	53	provides the document or information.
54	54	SECTION 2. Section 823.052(c), Insurance Code, is amended
55	55	to read as follows:
56	56	(c) The registration statement must also contain
57	57	information about:
58	58	(1) each outstanding loan the insurer makes to an
59	59	affiliate of the insurer or an affiliate makes to the insurer;
60	60	(2) each purchase, sale, or exchange of securities or
61	61	other investment between the insurer and an affiliate of the
62	62	insurer;
63	63	(3) each purchase, sale, or exchange of assets between
64	64	the insurer and an affiliate of the insurer;
65	65	(4) each management and service contract or
66	66	cost-sharing arrangement between the insurer and an affiliate of
67	67	the insurer;
68	68	(5) each reinsurance agreement between the insurer and
69	69	an affiliate of the insurer that covers one or more lines of
70	70	insurance of the ceding company;
71	71	(6) each agreement between the insurer and an
72	72	affiliate of the insurer to consolidate federal income tax returns;
73	73	(7) each transaction between the insurer and an
74	74	affiliated financial institution;
75	75	(8) each transaction between the insurer and an
76	76	affiliate of the insurer that is not in the ordinary course of
77	77	business;
78	78	(9) each guarantee or undertaking, other than an
79	79	insurance contract entered into in the ordinary course of the
80	80	insurer's business, for the benefit of an affiliate of the insurer
81	81	that results in a contingent exposure of the insurer's assets to
82	82	liability;
83	83	(10) each dividend or distribution to the insurer's
84	84	shareholders;
85	85	(11) each transaction between the insurer and an
86	86	affiliate of the insurer not specified by this subsection that is
87	87	subject to Section [823.102,] 823.103[,] or 823.104;
88	88	(12) the corporate governance and internal control
89	89	responsibilities of the insurer's board of directors, including a
90	90	statement that:
91	91	(A) the insurer's senior management or officers
92	92	have approved and implemented, and continue to maintain and
93	93	monitor, corporate governance and internal control procedures; and
94	94	(B) the insurer's board of directors oversees
95	95	corporate governance and internal controls; and
96	96	(13) any other information that the commissioner
97	97	requires by rule.
98	98	SECTION 3. Section 823.053(e), Insurance Code, is amended
99	99	to read as follows:
100	100	(e) An insurer is not required to report under this section
101	101	a transaction that is approved under Section [823.102 or] 823.103.
102	102	That approval is considered to be an amendment of the registration
103	103	statement filed under Section 823.052 without being reported under
104	104	this section.
105	105	SECTION 4. Sections 823.103(a) and (b), Insurance Code, are
106	106	amended to read as follows:
107	107	(a) This section applies only to:
108	108	(1) a sale, purchase, exchange, loan or other
109	109	extension of credit, or investment between a domestic insurer and
110	110	any person in the insurer's insurance holding company system,
111	111	including an amendment or modification of an affiliate agreement
112	112	previously filed under this section, provided the transaction is
113	113	not less than:
114	114	(A) with respect to nonlife insurers, the lesser
115	115	of three [that involves more than the lesser of one-half of one]
116	116	percent of the insurer's admitted assets or 25 [five] percent of the
117	117	insurer's surplus as regards policyholders[,] as of December 31 of
118	118	the year preceding the year in which the transaction occurs; or
119	119	[and]
120	120	(B) with respect to life insurers, three percent
121	121	of the insurer's admitted assets as of December 31 of the year
122	122	preceding the year in which the transaction occurs [the approval of
123	123	which is not required under Section 823.102];
124	124	(2) a loan or other extension of credit to a person who
125	125	is not an affiliate if the insurer makes a loan or extension of
126	126	credit with the agreement or understanding that the proceeds of the
127	127	transaction, wholly or in substantial part, are to be used to make
128	128	loans or extensions of credit to, to purchase assets of, or to make
129	129	investment in, an affiliate of the insurer making the loan or
130	130	extension of credit, provided the transaction is not less than:
131	131	(A) with respect to nonlife insurers, the lesser
132	132	of three percent of the insurer's admitted assets or 25 percent of
133	133	the insurer's surplus as regards policyholders as of December 31 of
134	134	the year preceding the year in which the transaction occurs; or
135	135	(B) with respect to life insurers, three percent
136	136	of the insurer's admitted assets as of December 31 of the year
137	137	preceding the year in which the transaction occurs;
138	138	(3) a reinsurance agreement, including a reinsurance
139	139	treaty or pooling agreement, or an amendment or modification of an
140	140	agreement previously filed under this section, between a domestic
141	141	insurer and any person in the insurer's holding company system;
142	142	(4) [(3)] a rendering of services between a domestic
143	143	insurer and any person in the insurer's holding company system on a
144	144	regular or systematic basis, including a tax-allocation agreement,
145	145	or an amendment or modification of an agreement previously filed
146	146	under this section; or
147	147	(5) [(4)] any material transaction between a domestic
148	148	insurer and any person in the insurer's holding company system that
149	149	is specified by rule and that the commissioner determines may
150	150	adversely affect the interests of the insurer's policyholders or of
151	151	the public, including an amendment or modification of an agreement
152	152	previously filed under this section.
153	153	(b) Subsection (a)(3) [(a)(2)] includes a reinsurance
154	154	agreement that requires as consideration a transfer of assets from
155	155	an insurer to a nonaffiliate and in relation to which the insurer
156	156	and nonaffiliate agree that any part of the transferred assets are
157	157	to be transferred to one or more affiliates of the insurer.
158	158	SECTION 5. Section 823.104, Insurance Code, is amended to
159	159	read as follows:
160	160	Sec. 823.104. PROHIBITION OF ACTION TO AVOID APPLICATION OF
161	161	SUBCHAPTER. (a) A domestic insurer may not enter into transactions
162	162	with persons in the insurer's insurance holding company system if:
163	163	(1) the transactions are part of a plan or series of
164	164	similar transactions; and
165	165	(2) the purpose of entering into the transactions is
166	166	to avoid a threshold amount provided by Section [823.102 or]
167	167	823.103.
168	168	(b) If the commissioner determines that over any 12-month
169	169	period a domestic insurer enters into transactions that violate
170	170	Subsection (a), the commissioner may:
171	171	(1) consider the cumulative effect of the
172	172	transactions; and
173	173	(2) apply:
174	174	(A) Section [823.102 or] 823.103; or
175	175	(B) sanctions under this code.
176	176	SECTION 6. Section 823.105, Insurance Code, is amended to
177	177	read as follows:
178	178	Sec. 823.105. TYPE OF AUTHORITY PROVIDED. Nothing in
179	179	Section [823.102,] 823.103[,] or 823.104 authorizes a transaction
180	180	that would violate law that is applicable to an insurer that is not
181	181	subject to this subchapter.
182	182	SECTION 7. Section 823.102, Insurance Code, is repealed.
183	183	SECTION 8. This Act takes effect immediately if it receives
184	184	a vote of two-thirds of all the members elected to each house, as
185	185	provided by Section 39, Article III, Texas Constitution. If this
186	186	Act does not receive the vote necessary for immediate effect, this
187	187	Act takes effect September 1, 2013.
188	188	* * * * *