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Senate Bill 567 |
Senate Author: Williams |
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Effective: 9-1-11 |
House Sponsor: Hancock |
Senate Bill 567 changes the name of the Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association to the Texas Life and Health Insurance Guaranty Association and establishes that the Texas Life and Health Insurance Guaranty Association is the successor to the Texas Life, Accident, Health, and Hospital Service Insurance Guaranty Association in all respects.
Senate Bill 567 amends the Insurance Code to exclude from the types of policies and contracts for which the Texas Life and Health Insurance Guaranty Association Act provides coverage a policy or contract providing a hospital, medical, prescription drug, or other health care benefit under Medicare Part C or D or a regulation adopted under those federal statutes. The bill authorizes the board of directors of the association or a committee of the board to meet by telecommunication method if immediate action is required and convening a quorum of the board or committee of the board at a single location is not reasonable or practical and sets out provisions relating to such a meeting.
Current law caps the total amount of assessments on a member insurer of the association for each account maintained by the association. Senate Bill 567 specifies that the cap percentage is based on the insurer's average annual premiums on the policies covered by the account during the applicable period and that the cap applies to the total amount of assessments in one calendar year. Current law excludes, among other coverages, the present value under certain annuity benefits in excess of a capped amount from being a contractual obligation under which the Texas Life and Health Insurance Guaranty Association is required to provide payment. The bill raises the amount of the cap from $100,000 to $250,000. The bill changes the amount that the association is required to remit to the domiciliary receiver out of the deposit paid to the association on the entry of a final order of liquidation or order approving a rehabilitation plan of an impaired or insolvent insurer.
Senate Bill 567 authorizes the association to elect to succeed to the rights of an insolvent insurer under a contract of reinsurance to which the insolvent insurer is a party to a specified extent, and the bill requires the association, as a condition of making such an election, to pay all unpaid premiums due under the reinsurance contract for coverage relating to a period before and after the date the association is obligated to provide coverage.