By: Campbell H.B. No. 2138
73R5917 PB-F
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 24.06, Insurance Code, is amended to read
1-6 as follows:
1-7 Art. 24.06. EXAMINATIONS, INVESTIGATIONS, AND USE OF FEES.
1-8 (a) The board shall conduct <may make> examinations as provided by
1-9 Subsection (b) of this article and may conduct <or> investigations
1-10 necessary to determine whether a licensee is in compliance with
1-11 this chapter or whether a licensee has conducted himself or herself
1-12 so as to justify the revocation of his or her license. The board
1-13 or its duly authorized representatives may require the attendance
1-14 of any person, may examine the person under oath, and may compel
1-15 the production of all relevant books, records, accounts, and
1-16 documents.
1-17 (b) Each licensee shall be examined at three-year intervals
1-18 to determine compliance with this chapter on a schedule prescribed
1-19 by the board. Investigations of alleged violations of this chapter
1-20 may be made whenever the department, acting through its authorized
1-21 agents, considers investigation appropriate in response to
1-22 allegations of violations of this chapter or a rule adopted under
1-23 this chapter.
1-24 (c) An examination conducted under Subsection (b) of this
2-1 article shall determine whether a licensee continues to maintain
2-2 the assets required under Article 24.03(c)(2) of this chapter. A
2-3 surety bond, certificate of deposit, or showing of assets in excess
2-4 of liabilities in the required amount satisfies the capital
2-5 requirements and additional financial examinations are not
2-6 necessary.
2-7 (d) All reports of examinations or investigations and all
2-8 correspondence and memoranda concerning or arising out of those
2-9 examinations or investigations, including any duly authenticated
2-10 copy or copies of those reports in the possession of any licensee
2-11 or the board, are confidential communications, are not subject to
2-12 subpoena, and may not be made public, except in connection with a
2-13 hearing under Article 24.05 of this chapter and any appearance in
2-14 connection with such a hearing. Information obtained in the course
2-15 of these examinations or investigations may be made available to
2-16 other governmental agencies when the information involves matters
2-17 within the scope or jurisdiction of those agencies.
2-18 (e) <(c)> In addition to the investigation and license fees
2-19 set forth in Article 24.03 of this chapter, each licensee shall pay
2-20 to the board an amount assessed by the board to cover the direct
2-21 and indirect cost of examinations and investigations made under
2-22 this article and a proportionate share of general administrative
2-23 expense attributable to the regulation of the persons licensed
2-24 under this chapter.
2-25 (f) <(d)> Fees collected under this chapter shall be
2-26 deposited in the State Treasury to the credit of the State Board of
2-27 Insurance operating fund. The board may use any portion of those
3-1 fees to enforce this chapter. The board may employ persons as
3-2 necessary to examine or investigate and make reports on alleged
3-3 violations of this chapter or on compliance with the other
3-4 provisions of this code by persons licensed under this chapter and
3-5 may pay the salaries and expenses of those persons and of all
3-6 office employees and the expenses necessary to enforce this
3-7 chapter.
3-8 (g) <(e)> If any residue of those funds remains after the
3-9 amounts necessary to carry on the work, examinations, and
3-10 investigations and to employ the persons as authorized by this
3-11 chapter have been paid, the residue shall be carried over from year
3-12 to year and used in the enforcement of this chapter. All funds
3-13 collected under this provision must be deposited in the State
3-14 Treasury in the State Board of Insurance operating fund and shall
3-15 be paid out for salaries, traveling expenses, office expenses, and
3-16 other expenses incurred by the board under this chapter.
3-17 SECTION 2. This Act takes effect September 1, 1993, and
3-18 applies only to a premium finance company license that is issued or
3-19 renewed on or after that date.
3-20 SECTION 3. The importance of this legislation and the
3-21 crowded condition of the calendars in both houses create an
3-22 emergency and an imperative public necessity that the
3-23 constitutional rule requiring bills to be read on three several
3-24 days in each house be suspended, and this rule is hereby suspended.