| 1 | 1 | | H.B. No. 2839 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | AN ACT |
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| 5 | 5 | | relating to a liquidity stress test for certain insurance |
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| 6 | 6 | | companies. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Subchapter B, Chapter 823, Insurance Code, is |
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| 9 | 9 | | amended by adding Section 823.0596 to read as follows: |
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| 10 | 10 | | Sec. 823.0596. LIQUIDITY STRESS TEST. (a) In this section: |
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| 11 | 11 | | (1) "Liquidity stress test framework" means an |
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| 12 | 12 | | evidence-based analysis that aims to capture the impact on |
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| 13 | 13 | | financial markets of aggregate asset sales of certain insurers |
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| 14 | 14 | | under various liquidity stress scenarios. |
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| 15 | 15 | | (2) "Scope criteria" means the designated exposure |
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| 16 | 16 | | bases, including minimum magnitudes of the bases for a specified |
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| 17 | 17 | | data year, adopted by the commissioner by rule under Subsection (e) |
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| 18 | 18 | | to establish a preliminary list of insurers included in the |
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| 19 | 19 | | liquidity stress test framework for that data year. |
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| 20 | 20 | | (3) "Ultimate controlling person" has the meaning |
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| 21 | 21 | | assigned by Section 823.055. |
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| 22 | 22 | | (b) The ultimate controlling person of an insurer shall file |
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| 23 | 23 | | the insurer's results of a specific year's liquidity stress test |
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| 24 | 24 | | performed using the liquidity stress test framework adopted by the |
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| 25 | 25 | | commissioner by rule under Subsection (e) if: |
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| 26 | 26 | | (1) this state is the lead state of the insurer's |
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| 27 | 27 | | group; and |
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| 28 | 28 | | (2) the insurer or the insurer's group meets the scope |
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| 29 | 29 | | criteria. |
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| 30 | 30 | | (c) The filing must be made on the reporting template for |
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| 31 | 31 | | the relevant year adopted by the commissioner by rule under |
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| 32 | 32 | | Subsection (e). |
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| 33 | 33 | | (d) The commissioner may exempt from the filing requirement |
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| 34 | 34 | | for a data year an insurer described by Subsection (b) after the |
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| 35 | 35 | | commissioner consults with other state insurance commissioners |
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| 36 | 36 | | regarding the impact that exempting the insurer may have on the |
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| 37 | 37 | | aggregation of liquidity stress test results filed by other |
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| 38 | 38 | | insurers with those states. |
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| 39 | 39 | | (e) The commissioner by rule shall adopt a liquidity stress |
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| 40 | 40 | | test framework, including scope criteria and reporting templates, |
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| 41 | 41 | | consistent with the framework published by the National Association |
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| 42 | 42 | | of Insurance Commissioners to facilitate the aggregation of results |
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| 43 | 43 | | from the liquidity stress test filed with this and other states. |
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| 44 | 44 | | (f) The commissioner shall collect the results filed under |
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| 45 | 45 | | Subsection (b) and report them to the National Association of |
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| 46 | 46 | | Insurance Commissioners in a manner that facilitates the |
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| 47 | 47 | | aggregation of other insurers' results filed with this and other |
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| 48 | 48 | | states. |
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| 49 | 49 | | (g) In addition to the confidentiality protections under |
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| 50 | 50 | | Section 823.011: |
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| 51 | 51 | | (1) a filing required by Subsection (b) in the |
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| 52 | 52 | | possession or control of the department that is obtained by, |
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| 53 | 53 | | created by, or disclosed to the commissioner or any other person, |
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| 54 | 54 | | including the National Association of Insurance Commissioners, is |
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| 55 | 55 | | recognized by this state as being proprietary and to contain trade |
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| 56 | 56 | | secrets; and |
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| 57 | 57 | | (2) the commissioner and any other person, including |
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| 58 | 58 | | the National Association of Insurance Commissioners, who receives a |
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| 59 | 59 | | filing required by Subsection (b) may not testify or be required to |
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| 60 | 60 | | testify in any private civil action concerning that filing. |
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| 61 | 61 | | SECTION 2. This Act takes effect September 1, 2023. |
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| 62 | 62 | | ______________________________ ______________________________ |
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| 63 | 63 | | President of the Senate Speaker of the House |
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| 64 | 64 | | I certify that H.B. No. 2839 was passed by the House on May 2, |
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| 65 | 65 | | 2023, by the following vote: Yeas 143, Nays 1, 2 present, not |
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| 66 | 66 | | voting. |
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| 67 | 67 | | ______________________________ |
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| 68 | 68 | | Chief Clerk of the House |
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| 69 | 69 | | I certify that H.B. No. 2839 was passed by the Senate on May |
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| 70 | 70 | | 24, 2023, by the following vote: Yeas 31, Nays 0. |
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| 71 | 71 | | ______________________________ |
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| 72 | 72 | | Secretary of the Senate |
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| 73 | 73 | | APPROVED: _____________________ |
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| 74 | 74 | | Date |
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| 75 | 75 | | _____________________ |
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| 76 | 76 | | Governor |
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