Texas 2019 - 86th Regular

Texas Senate Bill SB2333 Compare Versions

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	1	+	86R3945 JES-F
1	2		By: Creighton S.B. No. 2333
2		-	(In the Senate - Filed March 8, 2019; March 21, 2019, read
3		-	first time and referred to Committee on Business & Commerce;
4		-	May 6, 2019, reported adversely, with favorable Committee
5		-	Substitute by the following vote: Yeas 8, Nays 0; May 6, 2019, sent
6		-	to printer.)
7		-	COMMITTEE SUBSTITUTE FOR S.B. No. 2333 By: Creighton
8	3
9	4
10	5		A BILL TO BE ENTITLED
11	6		AN ACT
12	7		relating to the operation of the Texas Title Insurance Guaranty
13	8		Association.
14	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	10		SECTION 1. Section 2602.008(a), Insurance Code, is amended
16	11		to read as follows:
17	12		(a) Liability does not exist and a cause of action does not
18	13		arise against any of the following persons for a good faith action
19	14		or omission of the person in exercising the person's powers and
20	15		performing the person's duties under this chapter:
21	16		(1) the commissioner or the commissioner's
22	17		representative;
23	18		(2) the association or the association's agent,
24	19		representative, or employee;
25	20		(3) a title insurance company or the company's agent or
26	21		employee;
27	22		(4) a board member; and
28	23		(5) a special deputy receiver or the special deputy
29	24		receiver's agent or employee.
30	25		SECTION 2. Subchapter A, Chapter 2602, Insurance Code, is
31	26		amended by adding Section 2602.013 to read as follows:
32	27		Sec. 2602.013. VENUE. An action against the association or
33	28		an action against the association's board member, agent,
34	29		representative, or employee that arises from the exercise of the
35	30		person's powers or performance of the person's duties under this
36	31		chapter must be brought in a district court in Travis County.
37	32		SECTION 3. Section 2602.057(a), Insurance Code, is amended
38	33		to read as follows:
39	34		(a) A title insurance company is not prohibited, because the
40	35		company has an officer, director, or employee serving as a board
41	36		member, from negotiating for or entering into a contract of
42	37		reinsurance or assumption of liability or a contract of
43	38		substitution to provide for liabilities for covered claims with the
44	39		association, the commissioner, or the receiver or conservator of an
45	40		impaired title insurance company or agent.
46	41		SECTION 4. Section 2602.101(a), Insurance Code, is amended
47	42		to read as follows:
48	43		(a) In addition to the other powers and duties provided by
49	44		this chapter, the association may:
50	45		(1) borrow money as necessary to implement this
51	46		chapter according to the plan of operation;
52	47		(2) lend money to the receiver, supervisor, or
53	48		conservator of an impaired title insurance company or its agent;
54	49		(3) sue and be sued, including taking any legal action
55	50		necessary or proper to recover an unpaid assessment;
56	51		(4) enter into contracts as necessary or proper to
57	52		implement this chapter;
58	53		(5) ensure payment of the policy obligations of an
59	54		impaired title insurance company;
60	55		(6) negotiate and contract with a rehabilitator,
61	56		conservator, supervisor, receiver, [or] ancillary receiver, or
62	57		other third party to exercise the powers and perform the duties of
63	58		the association;
64	59		(7) guarantee, assume, or reinsure, or cause to be
65	60		guaranteed, assumed, or reinsured, a policy or contract of an
66	61		impaired title insurance company;
67	62		(8) take legal action necessary to avoid the payment
68	63		of improper claims or to settle claims or potential claims against
69	64		an impaired title insurance company or agent, or the association;
70	65		(9) assume control of and consolidate the escrow
71		-	accounts transferred to the association by an impaired agent that
72		-	has been placed in receivership, supervision, or conservatorship,
73		-	and:
74		-	(A) pay covered claims from the consolidated
75		-	escrow accounts to facilitate processing and payment of claims;
76		-	(B) maintain a separate accounting for each
77		-	transferred escrow account; and
78		-	(C) return money not used to pay a covered claim
79		-	to the owner of the money in accordance with the contract governing
80		-	the escrow of the money; and
	66	+	accounts transferred to the association by an impaired title agent
	67	+	that has been placed in receivership, supervision, or
	68	+	conservatorship, and pay covered claims and administrative
	69	+	expenses from the consolidated escrow accounts to facilitate
	70	+	processing and payment of claims; and
81	71		(10) [(9)] perform any other acts as necessary or
82	72		proper to implement this chapter.
83		-	SECTION 5. Sections 2602.102(a) and (b), Insurance Code,
84		-	are amended to read as follows:
85		-	(a) The association shall perform its functions under a plan
86		-	of operation. The plan of operation must contain provisions
87		-	necessary or proper for the execution of the association's powers
88		-	and duties. The plan of operation must, in addition to the other
89		-	requirements of this chapter:
90		-	(1) establish:
91		-	(A) procedures for handling the assets of the
92		-	association;
93		-	(B) the amount and method of reimbursing board
94		-	members;
95		-	(C) regular places and times for board meetings;
96		-	(D) procedures for maintaining records of all
97		-	financial transactions of the association, its agents, and the
98		-	board; and
99		-	(E) procedures for determining the amount of
100		-	guaranty fees, for collecting those fees, and for assessments;
101		-	(2) provide for the establishment of a claims filing
102		-	procedure that includes:
103		-	(A) notice by the association to claimants;
104		-	(B) procedures for filing claims seeking
105		-	recovery from the association; and
106		-	(C) a procedure for appealing the denial of
107		-	claims by the association; and
108		-	(3) [(2)] contain additional provisions necessary or
109		-	proper for the execution of the association's powers and duties.
	73	+	SECTION 5. Section 2602.102(b), Insurance Code, is amended
	74	+	to read as follows:
110	75		(b) The association shall submit to the commissioner any
111	76		amendment to the plan of operation necessary or suitable to ensure
112	77		the fair, reasonable, and equitable administration of the
113	78		association. The amendment takes effect on the commissioner's
114		-	written approval or the ~~90th~~ day after the date the amendment is
	79	+	written approval or the 30th day after the date the amendment is
115	80		submitted unless disapproved by the commissioner.
116	81		SECTION 6. Sections 2602.103(b) and (c), Insurance Code,
117	82		are amended to read as follows:
118	83		(b) On the commissioner's approval [request], the
119	84		association shall reimburse the department out of the guaranty fee
120	85		account for the cost, including reasonable and necessary expenses,
121	86		to employ or retain one or more persons to:
122	87		(1) audit and review agent escrow and trust accounts,
123	88		financial condition, and compliance with applicable statutes and
124	89		rules; [and]
125	90		(2) report to the commissioner on the accounts,
126	91		condition, and compliance; or
127	92		(3) supervise a person employed or retained to perform
128	93		audit and review under Subdivision (1).
129	94		(c) A person employed or retained under Subsection (b) acts
130	95		solely under the direction of and as assigned by the commissioner
131	96		but shall report the person's activity and expenses to the
132	97		association on the request of the association.
133	98		SECTION 7. Section 2602.104(a), Insurance Code, is amended
134	99		to read as follows:
135	100		(a) The association shall maintain a record of its [each
136	101		negotiation or meeting in which the association or the
137	102		association's representative discusses the association's]
138	103		activities in exercising its powers and performing its duties under
139	104		this chapter.
140	105		SECTION 8. Section 2602.105, Insurance Code, is amended to
141	106		read as follows:
142	107		Sec. 2602.105. MEETING BY CONFERENCE CALL. Notwithstanding
143	108		Chapter 551, Government Code, the board may hold an open meeting by
144	109		telephone conference call if immediate action is required and
145	110		convening of a quorum of the board at a single location is not
146	111		reasonable or practical. The meeting is subject to the notice
147	112		requirements that apply to other meetings. The notice of the
148	113		meeting must specify as the location of the meeting the location at
149	114		which meetings of the board are usually held. Each[, and each] part
150	115		of the meeting that is required to be open to the public must be
151	116		audible to the public at that location and must be recorded. The
152	117		audio [tape-recorded. The tape] recording shall be retained and
153	118		made available to the public for 30 days after the meeting date.
154	119		SECTION 9. Section 2602.107, Insurance Code, is amended by
155	120		amending Subsection (b) and adding Subsection (e) to read as
156	121		follows:
157	122		(b) The association may transfer income from investment of
158	123		the association's money in any account to the administrative
159	124		account.
160	125		(e) The association may advance money from any account to
161	126		the administrative account to pay the administrative expenses of
162	127		the association.
163	128		SECTION 10. Section 2602.109(a), Insurance Code, is amended
164	129		to read as follows:
165	130		(a) The [If the] association shall reserve in the title
166	131		account the amount of money the association determines [that money
167	132		in the title account exceeds the amount] reasonably necessary for
168	133		efficient future administration [operation] under this chapter.
169		-	The[, the] association shall return the excess money pro rata to ~~the~~
170		-	holders of participation receipts on which an outstanding ~~balance~~
171		-	exists after deducting any credits against premium taxes ~~taken~~
172		-	under Section 2602.210. The amount deducted for those credits
	134	+	The[, the] association shall return the excess money pro rata to
	135	+	the holders of participation receipts on which an outstanding
	136	+	balance exists after deducting any credits against premium taxes
	137	+	taken under Section 2602.210. The amount deducted for those credits
173	138		shall be deposited with the comptroller for credit to the general
174	139		revenue fund. The association shall transfer to the guaranty fee
175	140		account any excess money remaining in the title account after the
176	141		distribution and reservation of money for administration.
177	142		SECTION 11. Section 2602.110, Insurance Code, is amended to
178	143		read as follows:
179	144		Sec. 2602.110. EXPENSES OF ADMINISTERING IMPAIRED INSURER
180	145		OR IMPAIRED AGENT. (a) The association may spend or advance money
181	146		necessary to pay the expenses of administering the supervision,
182	147		rehabilitation, receivership, conservatorship, or, as determined
183	148		by a court of competent jurisdiction, other insolvency of an
184	149		impaired title insurance company or impaired agent, on terms the
185	150		association negotiates, if the company's or agent's assets are
186	151		insufficient to pay those expenses.
187		-	(b) The association may file a claim in a receivership
188		-	proceeding against an impaired title insurance company or impaired
189		-	agent to recover the association's reasonable costs incurred in
190		-	exercising the association's powers or performing the association's
191		-	duties under this chapter with respect to the impaired title
192		-	insurance company or impaired agent. Payment of a claim asserted by
193		-	the association under this section in a receivership proceeding in
194		-	this state is governed by Section 443.301. Payment of a claim
195		-	asserted by the association under this section in a receivership
196		-	proceeding in another state is governed by the law governing
197		-	priority of payment of distributions on unsecured claims by an
198		-	insurance guaranty association in that state.
	152	+	(b) Money spent by or due to the association as a result of
	153	+	payments or advances shall be given Class 1 priority in
	154	+	distribution of the impaired title insurance company's or impaired
	155	+	agent's assets under Section 443.301 or similar law of any
	156	+	jurisdiction in which the impairment action is pending.
199	157		SECTION 12. Section 2602.111(a), Insurance Code, is amended
200	158		to read as follows:
201	159		(a) The plan of operation may provide that, on approval of
202	160		the board [and the commissioner], a power or duty of the association
203	161		may be delegated to a corporation or other organization that:
204	162		(1) performs or will perform in two or more states
205	163		functions similar to those of the association or its equivalent;
206	164		and
207	165		(2) provides protection not substantially less
208	166		favorable and effective than that provided by this chapter.
209		-	SECTION 13. Section 2602.114(b), Insurance Code, is amended
210		-	to read as follows:
	167	+	SECTION 13. Section 2602.114, Insurance Code, is amended by
	168	+	amending Subsection (b) and adding Subsection (c-1) to read as
	169	+	follows:
211	170		(b) The meeting is not open to the public. Only board
212	171		members, association counsel and other association
213	172		representatives, the commissioner, and persons the commissioner
214	173		authorizes may attend the meeting.
	174	+	(c-1) The board may subpoena the officers, directors,
	175	+	members, managers, employees, or partners of an impaired title
	176	+	agent to compel their attendance before the board to provide sworn
	177	+	testimony regarding the location and disposition of the assets,
	178	+	money, and books and records of the agent and to discuss the causes
	179	+	of any possible remedial action related to a title agent insolvency
	180	+	or impairment.
215	181		SECTION 14. Section 2602.116, Insurance Code, is amended to
216	182		read as follows:
217	183		Sec. 2602.116. BOARD ACCESS TO RECORDS. The receiver,
218	184		supervisor, conservator, or other statutory successor of an
219	185		impaired title insurance company or agent shall give the board or
220	186		its representative:
221	187		(1) access to the company's or agent's records as
222	188		necessary for the board to perform its functions under this chapter
223	189		relating to covered claims; and
224	190		(2) copies of those records on the board's request and
225	191		at the board's expense.
226	192		SECTION 15. Section 2602.153, Insurance Code, is amended by
227	193		amending Subsection (a) and adding Subsection (e) to read as
228	194		follows:
229	195		(a) The association shall collect, receive, retain, [and]
230	196		disburse, and advance the guaranty fees only as specifically
231	197		provided by this chapter.
232	198		(e) The association may advance money from the guaranty fee
233	199		account as the association considers necessary to provide for the
234		-	payment of covered claims related to an impaired ~~agent and~~
235		-	administrative expenses related to the evaluation and ~~payment of~~
236		-	those claims. The advanced money shall be repaid to the ~~guaranty~~
237		-	fee account as soon as is practicable with money from ~~guaranty fees~~
238		-	or the estate of the impaired agent. ~~No interest may accrue on the~~
239		-	advanced money.
	200	+	payment of covered claims related to an impaired title insurance
	201	+	agent and administrative expenses related to the evaluation and
	202	+	payment of those claims. The advanced money shall be repaid to the
	203	+	guaranty fee account as soon as is practicable with money from
	204	+	guaranty fees or the estate of the impaired title insurance agent.
	205	+	No interest may accrue on the advanced money.
240	206		SECTION 16. Section 2602.201(a), Insurance Code, is amended
241	207		to read as follows:
242	208		(a) If the commissioner determines that a title insurance
243	209		company [or agent] has become impaired, the association shall
244	210		promptly estimate the amount of additional money needed to
245	211		supplement the assets of the impaired title insurance company [or
246	212		agent] to pay all covered claims and administrative expenses,
247	213		including expenses related to processing and payment of the claims.
248	214		SECTION 17. Section 2602.202(b), Insurance Code, is amended
249	215		to read as follows:
250	216		(b) The assessment of each title insurance company must be
251	217		in the proportion that the net direct written premiums of that
252		-	company in this state for the calendar year preceding the
253		-	assessment bear to the net direct written premiums of all title
254		-	insurance companies for that year. Assessments and supplemental
255		-	assessments may be made in consecutive years until the association
256		-	has collected an amount sufficient to pay the obligations and
257		-	expenses described under Subsection (a). The association may make
258		-	a supplemental assessment only against the same title insurance
259		-	companies and in the same proportion for each company as the initial
260		-	assessment.
	218	+	company for the calendar year preceding the assessment bear to the
	219	+	net direct written premiums of all title insurance companies for
	220	+	that year. Assessments and partial assessments may be made in
	221	+	consecutive years until the association has collected an amount
	222	+	sufficient to pay the obligations and expenses described under
	223	+	Subsection (a).
261	224		SECTION 18. Section 2602.203, Insurance Code, is amended to
262	225		read as follows:
263		-	Sec. 2602.203. NOTICE AND PAYMENT. The [(a) Not later
264		-	~~than~~ the 30th day before the date an assessment is due, the]
265		-	~~association~~ shall give ~~each~~ [notify the] title insurance ~~company to~~
266		-	~~be assessed at~~ least 90 days' written notice of the due date of ~~the~~
267		-	~~assessment~~ [company].
	226	+	Sec. 2602.203. NOTICE AND PAYMENT. The [(a) Not later than
	227	+	the 30th day before the date an assessment is due, the] association
	228	+	shall give all affected [notify the] title insurance companies at
	229	+	least 90 days' written notice of the due date of an assessment
	230	+	[company].
268	231		[(b) Not later than the 30th day after the date an
269	232		assessment is made, the title insurance company shall pay the
270	233		association the amount of the assessment.]
271	234		SECTION 19. Section 2602.206(b), Insurance Code, is amended
272	235		to read as follows:
273	236		(b) The holder of the receipt is a general creditor of the
274	237		impaired title insurance company, except that if the amount of
275	238		assessments the association receives exceeds the amount paid for
276	239		covered claims and administrative expenses, the holders of
277	240		participation receipts have preference over other general
278	241		creditors to, and are entitled to share pro rata in, the excess.
279	242		SECTION 20. Section 2602.208(a), Insurance Code, is amended
280	243		to read as follows:
281	244		(a) Money from assessments is considered to supplement the
282	245		marshalling of an impaired title insurance company's assets to make
283	246		payments of covered claims on the impaired title insurance
284	247		company's behalf and to pay administrative expenses related to
285	248		payment of covered claims. The association may assess title
286	249		insurance companies or use money from assessments to pay covered
287	250		claims before the receiver exhausts the impaired title insurance
288	251		company's assets.
289	252		SECTION 21. Section 2602.210, Insurance Code, is amended by
290	253		amending Subsection (a) and adding Subsection (d) to read as
291	254		follows:
292	255		(a) A title insurance company is entitled to recover in its
293	256		rates for the succeeding 12 months [calendar year] amounts paid in
294	257		assessments not to exceed one percent of the company's net direct
295	258		written premiums. In promulgating or establishing rates the
296	259		commissioner shall consider assessments and refunds of assessments
297	260		and shall adjust the rates to allow for recovery under this
298	261		subsection.
299	262		(d) If the association receives money related to a title
300	263		insurance company receivership from any source, including payment
301	264		of a claim made by the association against the estate of the title
302	265		insurance company, that is in excess of the amount title insurance
303		-	companies ~~have recovered or~~ are entitled to recover under this
304		-	~~section, the excess~~ money shall be held by the association in its
305		-	~~title account to~~ offset the amounts required for future assessments
306		-	or administrative expenses of the association.
	266	+	companies are entitled to recover under this section, the excess
	267	+	money shall be held by the association in its title account to
	268	+	offset the amounts required for future assessments or
	269	+	administrative expenses of the association.
307	270		SECTION 22. Section 2602.251, Insurance Code, is amended to
308	271		read as follows:
309	272		Sec. 2602.251. COVERED CLAIMS IN GENERAL. An unpaid claim
310	273		is a covered claim if:
311	274		(1) the claim is made by an insured under a title
312	275		insurance policy to which this chapter applies;
313	276		(2) the claim arises out of the policy and is within
314	277		the coverage and applicable limits of the policy, subject to all
315	278		applicable policy provisions and defenses available under the
316	279		policy and applicable law;
317	280		(3) the title insurance company that issued the policy
318	281		or assumed the policy under an assumption certificate is an
319	282		impaired title insurance company; and
320	283		(4) the insured real property or a lien on the property
321	284		is located in this state.
322	285		SECTION 23. Section 2602.252, Insurance Code, is amended to
323	286		read as follows:
324	287		Sec. 2602.252. CLAIM AGAINST TRUST FUNDS OR ESCROW ACCOUNT.
325	288		An unpaid claim is a covered claim if the claim:
326	289		(1) is:
327	290		(A) against trust funds or an escrow account of
328	291		an impaired title insurance company or agent; or
329		-	(B) for money received by an impaired title
330		-	insurance company, the company's agent, or an authorized agent of
331		-	the company's agent for deposit into a trust fund or an escrow
332		-	account; and
	292	+	(B) for money provided to an impaired title
	293	+	insurance company or the company's agent for deposit into trust
	294	+	funds or an escrow account; and
333	295		(2) is unpaid because of a shortage of those funds or
334	296		in that account, including a shortage that exists because the money
335	297		was not deposited by the impaired title insurance company or the
336		-	company's agent in ~~the fund~~ or account.
	298	+	company's agent in those funds or that account.
337	299		SECTION 24. Section 2602.255, Insurance Code, is amended to
338	300		read as follows:
339	301		Sec. 2602.255. CLAIMS NOT COVERED. The following are not
340	302		covered claims:
341	303		(1) an amount due a reinsurer, title insurance
342	304		company, insurance pool, or underwriting association as a
343	305		subrogation recovery or otherwise;
344	306		(2) a supplementary payment obligation incurred
345	307		before a determination is made under this chapter that a title
346	308		insurance company or agent is impaired, including:
347	309		(A) adjustment fees or expenses;
348	310		(B) attorney's fees or expenses;
349	311		(C) court costs;
350	312		(D) interest;
351	313		(E) enhanced damages, sought as a recovery
352	314		against the insured, the impaired title insurance company or agent,
353	315		or the association, that arise under Chapter 541 of this code or
354	316		Subchapter E, Chapter 17, Business & Commerce Code, or a similar law
355	317		of another state; and
356	318		(F) bond premiums;
357	319		(3) a shortage of trust funds or in an escrow account
358	320		resulting from the insolvency of a financial institution;
359	321		(4) exemplary, extracontractual, or bad faith damages
360	322		awarded against an insured or title insurance company by a court
361	323		judgment;
362	324		(5) a claim under Section 2602.252 by a claimant who
363	325		has a lien against the real property that was the subject of the
364	326		transaction from which the claim arises, unless the lien is held to
365	327		be invalid as a matter of law;
366	328		(6) a claim under Section 2602.251, 2602.252, or
367	329		2602.253 by a claimant who caused or substantially contributed to
368	330		the claimant's loss by the claimant's action or omission, as
369	331		determined by the association or the association's agent; and
370		-	(7) a claim filed with the association after the claim
371		-	filing deadline for [final date set by the court for the filing of
372		-	claims against a receiver of] an impaired title insurance company
373		-	or agent.
	332	+	(7) a claim filed with the association after the final
	333	+	date set by the commissioner or court for the filing of claims
	334	+	against a receiver of an impaired title insurance company or agent.
374	335		SECTION 25. Section 2602.256, Insurance Code, is amended to
375	336		read as follows:
376	337		Sec. 2602.256. AMOUNT OF COVERED CLAIM; LIMIT. (a) A
377	338		covered claim under Section 2602.251 or 2602.253 may not exceed the
378	339		lesser of $500,000 [$250,000] for each claimant or $500,000
379	340		[$250,000] for each policy.
380	341		(b) A covered claim under Section 2602.252 may not exceed
381	342		the lesser of $500,000 [$250,000] for each claimant or the amount of
382		-	money actually ~~received by [~~delivered to] the impaired title
383		-	~~insurance company or~~ agent as trust funds or an escrow account for
384		-	~~each claimant in a~~ transaction from which the claim arises, except
385		-	~~that the cumulative~~ amount of covered claims arising from a single
386		-	~~transaction may not~~ exceed $500,000 [$250,000].
	343	+	money actually delivered to the impaired title insurance company or
	344	+	agent as trust funds or an escrow account for each claimant in a
	345	+	transaction from which the claim arises, except that the cumulative
	346	+	amount of covered claims arising from a single transaction may not
	347	+	exceed $500,000 [$250,000].
387	348		SECTION 26. Section 2602.259(c), Insurance Code, is amended
388	349		to read as follows:
389	350		(c) In a proceeding considering a covered claim, a judgment
390	351		against an insured taken after the date the delinquency proceeding
391	352		or supervision begins or a conservator is appointed is not evidence
392	353		of liability or of the amount of damages, and a default or consent
393	354		judgment against an insured or the impaired title insurance company
394	355		or a settlement, release, or judgment entered into by the insured or
395	356		the impaired title insurance company does not bind the association
396	357		and is not evidence of liability or of the amount of damages in
397	358		connection with a claim brought against the association or another
398	359		party under this chapter.
399	360		SECTION 27. Section 2602.260, Insurance Code, is amended to
400	361		read as follows:
401	362		Sec. 2602.260. ADMISSIBILITY OF PAYMENT. In a lawsuit
402	363		brought by a conservator, supervisor, or receiver of an impaired
403	364		title insurance company or agent to recover assets of the company or
404	365		agent, the fact that a claim against the company or agent has been
405	366		or will be paid under this chapter is not admissible and may not be
406	367		placed before a jury by evidence, argument, or reference.
407	368		SECTION 28. Subchapter F, Chapter 2602, Insurance Code, is
408	369		amended by adding Section 2602.261 to read as follows:
409	370		Sec. 2602.261. APPEAL OF CLAIM DETERMINATION. A claimant's
410	371		right of appeal with respect to a claim determination by the
411	372		association is governed by the association's plan of operation. A
412	373		claimant must bring an action, including an action for declaratory
413	374		relief, challenging denial of a claim not later than one year after
414	375		the date the claim was denied.
415	376		SECTION 29. Section 2602.302, Insurance Code, is amended by
416		-	amending Subsections (a) and (b) and adding Subsections (b-1) and
417		-	(f) to read as follows:
418		-	(a) The association shall pay covered claims:
419		-	(1) existing before the determination of impairment;
420		-	or
421		-	(2) arising on or before:
422		-	(A) the date of cancellation of the impaired
423		-	title insurance company's policies or the claim deadline for claims
424		-	against the impaired title insurance company, as applicable; or
425		-	(B) the claim deadline for covered claims against
426		-	an impaired agent, which is the first anniversary of the date of
427		-	determination of impairment.
428		-	(b) A [The] court in this state in which [the] receivership
429		-	proceedings of an impaired title insurance company are pending
430		-	shall set, as applicable:
431		-	(1) the date of cancellation of the policies, which
432		-	may not be later than the fifth anniversary of the date of
433		-	determination of impairment; or
434		-	(2) the claim deadline, which may not be later than the
435		-	first anniversary of the date of determination of impairment.
436		-	(b-1) If an impaired title insurance company is in
437		-	receivership proceedings outside of this state, the claim deadline
438		-	is the first anniversary of the date of determination of
439		-	impairment.
440		-	(f) On payment of the last timely filed covered claim, the
441		-	association is discharged from the association's obligations under
442		-	this chapter. This subsection does not discharge the association
443		-	of obligations related to pending litigation.
	377	+	adding Subsections (b-1), (b-2), and (b-3) to read as follows:
	378	+	(b-1) On good cause shown by the association or the
	379	+	commissioner, the court in which the receivership proceedings are
	380	+	pending may extend a cancellation date or deadline imposed under
	381	+	Subsection (b) for a period not to exceed one year.
	382	+	(b-2) If an impaired title insurance company or agent is not
	383	+	in receivership in this state, the commissioner shall set a claim
	384	+	deadline, which may not be later than the first anniversary of the
	385	+	date of the determination of impairment.
	386	+	(b-3) On payment of the last timely filed covered claim or
	387	+	accepted late filed claim, the association is discharged from the
	388	+	association's obligations under this chapter and the estate of the
	389	+	impaired insurer or agent is closed.
444	390		SECTION 30. Section 2602.452(b), Insurance Code, is amended
445	391		to read as follows:
446	392		(b) The association may employ or retain a person or persons
447	393		to perform any action required under Subsection (a), in accordance
448	394		with Section 2602.103(a).
449	395		SECTION 31. Section 2602.103(d), Insurance Code, is
450	396		repealed.
451	397		SECTION 32. (a) Except as provided by this section, the
452	398		changes in law made by this Act apply only with respect to a title
453	399		insurance company or agent that is designated as impaired on or
454	400		after the effective date of this Act. The law as it existed
455	401		immediately before the effective date of this Act applies with
456	402		respect to a title insurance company or agent that was designated as
457	403		impaired before the effective date of this Act, and that law is
458	404		continued in effect for that purpose.
459	405		(b) Section 2602.013, Insurance Code, as added by this Act,
460	406		and Section 2602.260, Insurance Code, as amended by this Act, apply
461	407		only to an action commenced on or after the effective date of this
462	408		Act. An action commenced before the effective date of this Act is
463	409		governed by the law applicable to the action immediately before the
464	410		effective date of this Act, and that law is continued in effect for
465	411		that purpose.
466	412		SECTION 33. This Act takes effect September 1, 2019.
467		-	* * * * *