H.B. No. 3496
AN ACT
relating to farm mutual insurance companies.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 221.001, Insurance Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) This chapter does not apply to:
(1) a fraternal benefit society, including a fraternal
benefit society operating under Chapter 885;
(2) a group hospital service corporation operating
under Chapter 842;
(3) a stipulated premium company operating under
Chapter 884;
(4) a mutual assessment association, company, or
corporation regulated under Chapter 887; [or]
(5) a purely cooperative or mutual fire insurance
company carried on by its members solely for the protection of their
own property and not for profit, except as provided by Section
221.002(b)(13); or
(6) a farm mutual insurance company operating under
Chapter 911, unless the company is acting as a fronting insurer.
(c) In this section, "fronting insurer" means a farm mutual
insurance company:
(1) issuing an insurance policy that is the result of:
(A) marketing by an insurer not affiliated with
the farm mutual insurance company;
(B) an application submitted by a consumer to an
insurer not affiliated with the farm mutual insurance company; or
(C) an agreement with an insurer that is not a
farm mutual insurance company solely for the purpose of being
regulated under Chapter 911; or
(2) that cedes 85 percent or more of the farm mutual
insurance company's direct written premium to one or more
nonaffiliated reinsurers.
SECTION 2. Section 252.005, Insurance Code, is amended to
read as follows:
Sec. 252.005. EXCEPTION. This chapter does not apply to:
(1) a farm mutual insurance company operating under
Chapter 911, unless the company is acting as a fronting insurer as
defined by Section 221.001(c); or
(2) a mutual insurance company engaged in business
under Chapter 12, Title 78, Revised Statutes, before that chapter's
repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
Called Session, 1929, as amended by Section 1, Chapter 60, General
Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
retains the rights and privileges under the repealed law to the
extent provided by those sections.
SECTION 3. Section 911.065, Insurance Code, is amended by
adding Subsection (c) to read as follows:
(c) A farm mutual insurance company may provide in its
constitution or bylaws that a policyholder may vote electronically
or by mail without making a personal appearance at a policyholders'
meeting.
SECTION 4. Section 2210.006(b), Insurance Code, is amended
to read as follows:
(b) This chapter does not apply to:
(1) a farm mutual insurance company operating under
Chapter 911, unless the company is acting as a fronting insurer, as
defined by Section 221.001(c);
(2) a nonaffiliated county mutual fire insurance
company described by Section 912.310 that is writing exclusively
industrial fire insurance policies as described by Section
912.310(a)(2); or
(3) a mutual insurance company or a statewide mutual
assessment company engaged in business under Chapter 12 or 13,
Title 78, Revised Statutes, respectively, before those chapters'
repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
Called Session, 1929, as amended by Section 1, Chapter 60, General
Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
retains the rights and privileges under the repealed law to the
extent provided by those sections.
SECTION 5. (a) Sections 221.001 and 252.005, Insurance
Code, as amended by this Act, do not affect tax liability accruing
before the 2017 calendar year. That liability continues in effect
as if this Act had not been enacted, and the former law is continued
in effect for the collection of taxes due and for civil and criminal
enforcement of the liability for those taxes.
(b) Section 2210.006(b), Insurance Code, as amended by this
Act, applies only to participation in the Texas Windstorm Insurance
Association on or after the effective date of this Act, including
the payment of assessments the liability for which accrues on or
after that date. Participation in the Texas Windstorm Insurance
Association before the effective date of this Act, including the
payment of assessments the liability for which accrued before that
date, is governed by the law as it existed immediately before that
date, and that law is continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2017.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3496 was passed by the House on May 4,
2017, by the following vote: Yeas 143, Nays 0, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 3496 on May 24, 2017, by the following vote: Yeas 138, Nays 7,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3496 was passed by the Senate, with
amendments, on May 22, 2017, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor