Texas 2023 - 88th Regular

Texas Senate Bill SB2272 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R13696 RDS-F
2	2	By: Hughes S.B. No. 2272
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the operation of the Texas Property and Casualty
8	8	Insurance Guaranty Association.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 462.007(b), Insurance Code, is amended
11	11	to read as follows:
12	12	(b) Except as provided by Subchapter F, this chapter does
13	13	not apply to:
14	14	(1) life, annuity, health, or disability insurance;
15	15	(2) mortgage guaranty, financial guaranty, or other
16	16	kinds of insurance offering protection against investment risks;
17	17	(3) a fidelity or surety bond, or any other bonding
18	18	obligation;
19	19	(4) credit insurance, guaranteed asset protection
20	20	insurance protecting a lender's or borrower's interest if the
21	21	amount owed on an asset exceeds the asset's value, vendors'
22	22	single-interest insurance, collateral protection insurance, or
23	23	similar insurance protecting a creditor's interest arising out of a
24	24	creditor-debtor transaction;
25	25	(5) insurance of warranties or service contracts;
26	26	(6) title insurance;
27	27	(7) ocean marine insurance;
28	28	(8) a transaction or combination of transactions
29	29	between a person, including an affiliate of the person, and an
30	30	insurer, including an affiliate of the insurer, that involves the
31	31	transfer of investment or credit risk unaccompanied by the transfer
32	32	of insurance risk, including transactions, except for workers'
33	33	compensation insurance, involving captive insurers, policies in
34	34	which deductible or self-insured retention is substantially equal
35	35	in amount to the limit of the liability under the policy, and
36	36	transactions in which the insured retains a substantial portion of
37	37	the risk; or
38	38	(9) insurance provided by or guaranteed by government.
39	39	SECTION 2. Section 462.054, Insurance Code, is amended to
40	40	read as follows:
41	41	Sec. 462.054. ELIGIBILITY TO SERVE AS INDUSTRY
42	42	REPRESENTATIVE. To be eligible to serve as an insurance industry
43	43	board member, an individual must be an officer or a full-time
44	44	employee of a member insurer.
45	45	SECTION 3. Section 462.056, Insurance Code, is amended to
46	46	read as follows:
47	47	Sec. 462.056. REIMBURSEMENT OF BOARD MEMBERS; COMPENSATION
48	48	TO PUBLIC REPRESENTATIVES. (a) A board member may be reimbursed
49	49	from the assets of the association for expenses the board member
50	50	incurs as a board member.
51	51	(b) A board member who is a public representative may
52	52	receive compensation in an amount not to exceed $250 for each day
53	53	the public representative attends a regular or special meeting of
54	54	the board.
55	55	SECTION 4. Section 462.059, Insurance Code, is amended to
56	56	read as follows:
57	57	Sec. 462.059. MEETING BY TELEPHONE CONFERENCE CALL OR
58	58	VIDEOCONFERENCE. (a) Notwithstanding Chapter 551, Government
59	59	Code, or any other law, the board may hold a [an open] meeting by
60	60	telephone conference call, videoconference, or other similar
61	61	telecommunication method. The board may use any method authorized
62	62	by this subsection to establish a quorum, vote, or conduct any other
63	63	meeting purpose in accordance with this section regardless of the
64	64	subject matter discussed or considered by the board at the meeting.
65	65	[A meeting held by telephone conference call:
66	66	[(1) must be audible to the public at the location
67	67	specified in the notice described by Subsection (c); and
68	68	[(2) must allow two-way audio communication during the
69	69	entire meeting between the members of the board attending a meeting
70	70	authorized by this section.
71	71	[(a-1) If the two-way audio communication required under
72	72	Subsection (a) is disrupted during a meeting so that a quorum of the
73	73	board is no longer able to participate, the meeting may not continue
74	74	until the two-way audio communication is reestablished.]
75	75	(b) A [The] meeting authorized by this section is subject to
76	76	the notice requirements that apply to other meetings of the board of
77	77	directors.
78	78	(c) The notice of a [the] meeting authorized by this section
79	79	must specify the location of the meeting.
80	80	(d) Each [, and each] part of a [the] meeting that is
81	81	required to be open to the public must be audible to the public at
82	82	the [that] location specified by Subsection (c).
83	83	(e) Two-way audio communication must be available during
84	84	the entire meeting between all members of the board attending a
85	85	meeting authorized by this section. If the two-way audio
86	86	communication is disrupted so that a quorum of the board is no
87	87	longer participating in the meeting, the meeting may not continue
88	88	until the two-way audio communication is reestablished.
89	89	(f) The association must make an audio recording of the
90	90	meeting, if held by telephone conference call, or a digital
91	91	recording of the meeting, if held by videoconference or other
92	92	similar telecommunication method. The recording of the open
93	93	portion of the meeting must be posted publicly to the association's
94	94	Internet website.
95	95	SECTION 5. Section 462.105, Insurance Code, is amended to
96	96	read as follows:
97	97	Sec. 462.105. ACCOUNTS. For purposes of administration and
98	98	assessment, the association shall maintain the following accounts
99	99	[is divided into]:
100	100	(1) the workers' compensation insurance account;
101	101	(2) the automobile insurance account; [and]
102	102	(3) the account for all other lines of insurance to
103	103	which this chapter applies; and
104	104	(4) the administrative account.
105	105	SECTION 6. Section 462.106, Insurance Code, is amended to
106	106	read as follows:
107	107	Sec. 462.106. ADMINISTRATION OF ACCOUNTS [ADMINISTRATIVE
108	108	EXPENSES]. (a) The association shall [may] use money in the
109	109	administrative account to pay administrative costs and other
110	110	general overhead expenses of the association.
111	111	(b) The association may transfer income from investment of
112	112	the association's money to the administrative account.
113	113	(c) The association shall use money from the corresponding
114	114	line of insurance business account described by Section 462.105 to
115	115	pay any covered claims for that line of insurance and related claims
116	116	adjustment expenses charged by a third party for that line of
117	117	insurance.
118	118	(d) The board may authorize borrowing between accounts if:
119	119	(1) the indebted account is obligated to pay interest
120	120	at a rate that will reasonably compensate the lending account for
121	121	any lost earnings; and
122	122	(2) the indebted account is reasonably expected to
123	123	have sufficient money to repay the lending account, with interest,
124	124	before the lending account needs the money to pay obligations for
125	125	which the lending account is used. [On notification by the
126	126	association of the amount of any additional money needed for the
127	127	administrative account, the association shall assess member
128	128	insurers in the manner provided by Sections 462.159-462.168 for
129	129	that money. The commissioner shall consider the net direct written
130	130	premiums collected in this state for all lines of business covered
131	131	by this chapter. An assessment for administrative expenses
132	132	incurred by a supervisor or conservator appointed by the
133	133	commissioner or a court-appointed receiver for a nonmember of the
134	134	association or unauthorized insurer operating in this state may not
135	135	exceed $1 million each calendar year.]
136	136	SECTION 7. Section 462.163, Insurance Code, is amended to
137	137	read as follows:
138	138	Sec. 462.163. PAYMENT OF ASSESSMENT; INTEREST. An insurer
139	139	shall pay the amount of an assessment under Section 462.160 or
140	140	462.162(b) to the association not later than the 30th day after the
141	141	date the association gives notice of the assessment. Interest
142	142	accrues on an unpaid amount at a rate of 10 percent a year beginning
143	143	on the date the payment is due.
144	144	SECTION 8. Section 462.057, Insurance Code, is repealed.
145	145	SECTION 9. Section 462.163, Insurance Code, as amended by
146	146	this Act, applies only to an assessment that becomes due on or after
147	147	the effective date of this Act. An assessment that becomes due
148	148	before the effective date of this Act is governed by the law as it
149	149	existed immediately before the effective date of this Act, and that
150	150	law is continued in effect for that purpose.
151	151	SECTION 10. This Act takes effect immediately if it
152	152	receives a vote of two-thirds of all the members elected to each
153	153	house, as provided by Section 39, Article III, Texas Constitution.
154	154	If this Act does not receive the vote necessary for immediate
155	155	effect, this Act takes effect September 1, 2023.