| 5 | 2 | | |
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| 6 | 3 | | |
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| 7 | 4 | | A BILL TO BE ENTITLED |
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| 8 | 5 | | AN ACT |
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| 9 | 6 | | relating to the applicability of certain insurance laws to certain |
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| 10 | 7 | | farm mutual insurance companies. |
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| 11 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 9 | | SECTION 1. Section 221.001, Insurance Code, is amended by |
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| 13 | 10 | | amending Subsection (b) and adding Subsection (c) to read as |
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| 14 | 11 | | follows: |
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| 15 | 12 | | (b) This chapter does not apply to: |
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| 16 | 13 | | (1) a fraternal benefit society, including a fraternal |
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| 17 | 14 | | benefit society operating under Chapter 885; |
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| 18 | 15 | | (2) a group hospital service corporation operating |
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| 19 | 16 | | under Chapter 842; |
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| 20 | 17 | | (3) a stipulated premium company operating under |
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| 21 | 18 | | Chapter 884; |
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| 22 | 19 | | (4) a mutual assessment association, company, or |
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| 23 | 20 | | corporation regulated under Chapter 887; [or] |
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| 24 | 21 | | (5) a purely cooperative or mutual fire insurance |
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| 25 | 22 | | company carried on by its members solely for the protection of their |
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| 26 | 23 | | own property and not for profit, except as provided by Section |
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| 27 | 24 | | 221.002(b)(13); or |
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| 28 | 25 | | (6) a farm mutual insurance company operating under |
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| 29 | 26 | | Chapter 911, unless the company is acting as a fronting insurer. |
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| 30 | 27 | | (c) In this section, "fronting insurer" means a farm mutual |
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| 31 | 28 | | insurance company: |
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| 32 | 29 | | (1) issuing an insurance policy that is the result of: |
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| 33 | 30 | | (A) marketing by an insurer not affiliated with |
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| 34 | 31 | | the farm mutual insurance company; |
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| 35 | 32 | | (B) an application submitted by a consumer to an |
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| 36 | 33 | | insurer not affiliated with the farm mutual insurance company; or |
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| 37 | 34 | | (C) an agreement with an insurer that is not a |
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| 38 | 35 | | farm mutual insurance company solely for the purpose of being |
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| 39 | 36 | | regulated under Chapter 911; or |
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| 40 | 37 | | (2) that cedes 85 percent or more of the farm mutual |
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| 41 | 38 | | insurance company's direct written premium to one or more |
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| 42 | 39 | | nonaffiliated reinsurers. |
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| 43 | 40 | | SECTION 2. Section 252.005, Insurance Code, is amended to |
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| 44 | 41 | | read as follows: |
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| 45 | 42 | | Sec. 252.005. EXCEPTION. This chapter does not apply to: |
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| 46 | 43 | | (1) a farm mutual insurance company operating under |
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| 47 | 44 | | Chapter 911, unless the company is acting as a fronting insurer as |
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| 48 | 45 | | defined by Section 221.001(c); or |
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| 49 | 46 | | (2) a mutual insurance company engaged in business |
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| 50 | 47 | | under Chapter 12, Title 78, Revised Statutes, before that chapter's |
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| 51 | 48 | | repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st |
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| 52 | 49 | | Called Session, 1929, as amended by Section 1, Chapter 60, General |
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| 53 | 50 | | Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that |
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| 54 | 51 | | retains the rights and privileges under the repealed law to the |
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| 55 | 52 | | extent provided by those sections. |
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| 56 | 53 | | SECTION 3. Section 2210.006(b), Insurance Code, is amended |
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| 57 | 54 | | to read as follows: |
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| 58 | 55 | | (b) This chapter does not apply to: |
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| 59 | 56 | | (1) a farm mutual insurance company operating under |
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| 60 | 57 | | Chapter 911, unless the company is acting as a fronting insurer, as |
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| 61 | 58 | | defined by Section 221.001(c); |
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| 62 | 59 | | (2) a nonaffiliated county mutual fire insurance |
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| 63 | 60 | | company described by Section 912.310 that is writing exclusively |
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| 64 | 61 | | industrial fire insurance policies as described by Section |
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| 65 | 62 | | 912.310(a)(2); or |
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| 66 | 63 | | (3) a mutual insurance company or a statewide mutual |
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| 67 | 64 | | assessment company engaged in business under Chapter 12 or 13, |
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| 68 | 65 | | Title 78, Revised Statutes, respectively, before those chapters' |
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| 69 | 66 | | repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st |
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| 70 | 67 | | Called Session, 1929, as amended by Section 1, Chapter 60, General |
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| 71 | 68 | | Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that |
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| 72 | 69 | | retains the rights and privileges under the repealed law to the |
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| 73 | 70 | | extent provided by those sections. |
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| 74 | 71 | | SECTION 4. (a) Sections 221.001 and 252.005, Insurance |
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| 75 | 72 | | Code, as amended by this Act, do not affect tax liability accruing |
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| 76 | 73 | | before the 2017 calendar year. That liability continues in effect |
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| 77 | 74 | | as if this Act had not been enacted, and the former law is continued |
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| 78 | 75 | | in effect for the collection of taxes due and for civil and criminal |
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| 79 | 76 | | enforcement of the liability for those taxes. |
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| 80 | 77 | | (b) Section 2210.006(b), Insurance Code, as amended by this |
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| 81 | 78 | | Act, applies only to participation in the Texas Windstorm Insurance |
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| 82 | 79 | | Association on or after the effective date of this Act, including |
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| 83 | 80 | | the payment of assessments the liability for which accrues on or |
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| 84 | 81 | | after that date. Participation in the Texas Windstorm Insurance |
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| 85 | 82 | | Association before the effective date of this Act, including the |
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| 86 | 83 | | payment of assessments the liability for which accrued before that |
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| 87 | 84 | | date, is governed by the law as it existed immediately before that |
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| 88 | 85 | | date, and that law is continued in effect for that purpose. |
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| 89 | 86 | | SECTION 5. This Act takes effect immediately if it receives |
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| 90 | 87 | | a vote of two-thirds of all the members elected to each house, as |
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| 91 | 88 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 92 | 89 | | Act does not receive the vote necessary for immediate effect, this |
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| 93 | 90 | | Act takes effect September 1, 2017. |
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