73R9359 E
By Campbell H.B. No. 2138
Substitute the following for H.B. No. 2138:
By Counts C.S.H.B. No. 2138
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to examinations and investigations of premium finance
1-3 companies.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Article 24.03(c), Insurance Code, is amended to
1-6 read as follows:
1-7 (c) The board may refuse to issue a license if it finds
1-8 that:
1-9 (1) the financial responsibility, experience,
1-10 character, or general fitness of the applicant or any person
1-11 associated with the applicant does not command the confidence of
1-12 the community and does not warrant the belief that the business
1-13 will be conducted honestly, fairly, and efficiently; or
1-14 (2) the applicant does not prove financial
1-15 responsibility through:
1-16 (A) <have available for the operation for the
1-17 business> net assets of at least $25,000 available for use in the
1-18 business;
1-19 (B) a surety bond executed by the applicant as
1-20 principal through a surety company authorized to do business in
1-21 this state in the principal sum of $25,000, payable to the
1-22 department; or
1-23 (C) a deposit with the state treasurer of cash
1-24 in the amount of $25,000.
2-1 SECTION 2. Article 24.06, Insurance Code, is amended to read
2-2 as follows:
2-3 Art. 24.06. EXAMINATIONS, INVESTIGATIONS, AND USE OF FEES.
2-4 (a) The department shall conduct <board may make> examinations as
2-5 provided by Subsection (b) of this article and may conduct <or>
2-6 investigations necessary to determine whether a licensee is in
2-7 compliance with this chapter <or whether a licensee has conducted
2-8 himself or herself so as to justify the revocation of his or her
2-9 license. The board or its duly authorized representatives may
2-10 require the attendance of any person, may examine the person under
2-11 oath, and may compel the production of all relevant books, records,
2-12 accounts, and documents>.
2-13 (b) The books, records, accounts, and loan documents of each
2-14 licensee, other than a person licensed under Article 24.02(b) of
2-15 this code, shall be examined at five-year intervals to determine
2-16 compliance with this chapter on a schedule prescribed by the
2-17 department. The department may investigate any person licensed
2-18 under this chapter, including a person licensed under Article
2-19 24.02(b) of this code, for alleged violations of this chapter
2-20 whenever the department, acting through its authorized agents,
2-21 considers investigation appropriate in response to allegations of
2-22 violations of this chapter or a rule adopted under this chapter.
2-23 (c) An examination conducted under Subsection (b) of this
2-24 article shall determine whether a licensee continues to maintain
2-25 the assets required under Article 24.03(c)(2) of this chapter. A
2-26 surety bond, certificate of deposit, or deposit with the state
2-27 treasurer in the required amount satisfies the capital
3-1 requirements, and additional financial examinations are not
3-2 necessary.
3-3 (d) All reports of examinations or investigations and all
3-4 correspondence and memoranda concerning or arising out of those
3-5 examinations or investigations, including any duly authenticated
3-6 copy or copies of those reports in the possession of any licensee
3-7 or the board, are confidential communications, are not subject to
3-8 subpoena, and may not be made public, except in connection with a
3-9 hearing under Article 24.05 of this chapter and any appearance in
3-10 connection with such a hearing. Information obtained in the course
3-11 of these examinations or investigations may be made available to
3-12 other governmental agencies when the information involves matters
3-13 within the scope or jurisdiction of those agencies.
3-14 (e) <(c)> In addition to the investigation and license fees
3-15 set forth in Article 24.03 of this chapter, each licensee shall pay
3-16 to the board an amount assessed by the board to cover the direct
3-17 and indirect cost of examinations and investigations made under
3-18 this article and a proportionate share of general administrative
3-19 expense attributable to the regulation of the persons licensed
3-20 under this chapter.
3-21 (f) <(d)> Fees collected under this chapter shall be
3-22 deposited in the State Treasury to the credit of the State Board of
3-23 Insurance operating fund. The board may use any portion of those
3-24 fees to enforce this chapter. The board may employ persons as
3-25 necessary to examine or investigate and make reports on alleged
3-26 violations of this chapter or on compliance with the other
3-27 provisions of this code by persons licensed under this chapter and
4-1 may pay the salaries and expenses of those persons and of all
4-2 office employees and the expenses necessary to enforce this
4-3 chapter.
4-4 (g) <(e)> If any residue of those funds remains after the
4-5 amounts necessary to carry on the work, examinations, and
4-6 investigations and to employ the persons as authorized by this
4-7 chapter have been paid, the residue shall be carried over from year
4-8 to year and used in the enforcement of this chapter. All funds
4-9 collected under this provision must be deposited in the State
4-10 Treasury in the State Board of Insurance operating fund and shall
4-11 be paid out for salaries, traveling expenses, office expenses, and
4-12 other expenses incurred by the board under this chapter.
4-13 SECTION 3. This Act takes effect September 1, 1993, and
4-14 applies only to a premium finance company license that is issued or
4-15 renewed on or after that date.
4-16 SECTION 4. The importance of this legislation and the
4-17 crowded condition of the calendars in both houses create an
4-18 emergency and an imperative public necessity that the
4-19 constitutional rule requiring bills to be read on three several
4-20 days in each house be suspended, and this rule is hereby suspended.