By Smithee H.B. No. 1243
74R2838 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to financial solvency requirements for certain insurers
1-3 and health maintenance organizations.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 8(f), Article 1.14-2, Insurance Code, is
1-6 amended to read as follows:
1-7 (f) Every insurer proposing to transact surplus lines
1-8 insurance within this state shall hold a current license or
1-9 authority from its domiciliary state or country to conduct the
1-10 business of insurance and must actually conduct the business of
1-11 insurance in that jurisdiction. The license or authority from the
1-12 domiciliary state or country must be for the kind or class of
1-13 insurance to be written in this state as surplus lines insurance,
1-14 and satisfactory evidence that the insurer holds the required
1-15 license or authorization and actually conducts the business of
1-16 insurance in the jurisdiction issuing the license or authorization
1-17 must be provided to the Commissioner of Insurance.
1-18 SECTION 2. Articles 1.39(b)-(d), Insurance Code, are amended
1-19 to read as follows:
1-20 (b) An insurer may obtain a loan or an advance of cash or
1-21 property, repayable with interest and may assume a subordinated
1-22 liability for repayment of the advance and payment of interest on
1-23 the advance if the insurer and creditor execute a written agreement
1-24 stating that the creditor may be paid only out of that portion of
2-1 the insurer's surplus that exceeds <the greater of> a minimum
2-2 surplus stated and fixed in the agreement <or a minimum surplus of
2-3 $500,000 for that insurer. The department or the commissioner may
2-4 not require the agreement to provide another minimum surplus
2-5 amount>.
2-6 (c) The commissioner must approve an agreement entered into
2-7 under Subsection (a) of this article before <A loan or advance made
2-8 under this article, and any interest accruing on the loan or
2-9 advance, is a legal liability and financial statement liability of>
2-10 the insurer may assume a subordinated liability <only to the extent
2-11 provided by the terms and conditions of the loan or advance
2-12 agreement, and the loan or advance may not otherwise be a legal
2-13 liability or financial statement liability of the insurer>.
2-14 (d) An <If the loan or advance agreement provides for a
2-15 sinking fund out of which the loan or advance is to be repaid, then
2-16 the loan or advance shall be a legal liability and financial
2-17 statement liability of the> insurer <only to the extent of those
2-18 funds accumulated and held in the sinking fund, and the loan or
2-19 advance> may not repay principal or pay interest on a subordinate
2-20 liability assumed under this article unless the payment or
2-21 repayment is approved by the commissioner <otherwise be a legal
2-22 liability or financial statement liability of the insurer. By
2-23 mutual agreement of the parties to the agreement, any portion of
2-24 the accumulated funds in the sinking fund may be returned to the
2-25 surplus of the insurer at any time and from time to time and
2-26 thereafter may not be considered as a legal liability or financial
2-27 statement liability of the insurer>.
3-1 SECTION 3. Article 2.02(b), Insurance Code, is amended to
3-2 read as follows:
3-3 (b) The commissioner <board> may adopt rules, regulations,
3-4 and guidelines, from time to time, requiring any company
3-5 incorporated under this article, and any alien or foreign insurer
3-6 admitted in this state to do the types of business authorized by
3-7 this Chapter, to maintain capital and surplus levels in excess of
3-8 the statutory levels required by this article based upon any of the
3-9 following factors:
3-10 1. the nature and type of risks a company underwrites
3-11 or reinsures;
3-12 2. the premium volume of risks a company underwrites
3-13 or reinsures;
3-14 3. the composition, quality, duration, fluctuations in
3-15 market value, or liquidity of a company's assets <investment
3-16 portfolio>;
3-17 4. other business risks and other relevant risks
3-18 established under the risk-based capital rules adopted by the
3-19 commissioner <fluctuations in the market value of securities a
3-20 company holds>; or
3-21 5. the adequacy of a company's reserves.
3-22 The rules and regulations<,> adopted under this subsection
3-23 shall be designed to assure the financial solvency of companies for
3-24 the protection of policyholders. The commissioner may specify and
3-25 direct in the rules which regulatory actions, requirements, and
3-26 remedies shall be taken against a company as a consequence of the
3-27 application of the rules to that company.
4-1 SECTION 4. Articles 2.20(d) and (f), Insurance Code, are
4-2 amended to read as follows:
4-3 (d) The commissioner <board> may adopt rules, regulations,
4-4 and guidelines, from time to time, requiring any company subject to
4-5 this article to maintain capital and surplus levels in excess of
4-6 the minimums required by Article 2.02 of this code for a newly
4-7 incorporated company and in excess of the levels required in the
4-8 schedule established under Subsection (c) of this article, based
4-9 upon any of the following factors:
4-10 (1) the nature and type of risks a company underwrites
4-11 or reinsures;
4-12 (2) the premium volume of risks a company underwrites
4-13 or reinsures;
4-14 (3) the composition, quality, duration, fluctuations
4-15 in market value, or liquidity of a company's assets <investment
4-16 portfolio>;
4-17 (4) other business risks and other relevant risks
4-18 established under the risk-based capital rules adopted by the
4-19 commissioner <fluctuations in the market value of securities a
4-20 company holds>; or
4-21 (5) the adequacy of a company's reserves.
4-22 The rules adopted under this subsection shall be designed to
4-23 assure the financial solvency of companies for the protection of
4-24 policyholders. The commissioner may specify and direct in the
4-25 rules which regulatory actions, requirements, and remedies shall be
4-26 taken against a company as a consequence of the application of the
4-27 rules to that company.
5-1 (f) The commissioner may order an insurer subject to the
5-2 capital and surplus requirements of this article or Article 2.02 of
5-3 this code who fails to comply with those requirements to cease
5-4 writing new business, and may also:
5-5 (1) place the insurer under state supervision or
5-6 conservatorship;
5-7 (2) determine the insurer to be in a hazardous
5-8 condition as provided by Article 1.32 of this code;
5-9 (3) determine the insurer to be impaired as provided
5-10 by Section 5, Article 1.10 of this code; or
5-11 (4) make the insurer subject to any other applicable
5-12 sanction provided by this code. <Notwithstanding any other
5-13 provision of this code other than Subsection (b) of this article,
5-14 for insurers which are not required by law to have capital stock,
5-15 the minimum free surplus or guaranty fund and free surplus required
5-16 shall be the greater of that required of the insurer immediately
5-17 prior to the effective date of this article or one-third of the net
5-18 written premium of the insurer for the preceding 12 months after
5-19 deducting:>
5-20 <(1) lawfully ceded reinsurance; and>
5-21 <(2) policy fees, if any, not ceded to reinsurers.>
5-22 SECTION 5. Sections 2A(a) and (b), Article 3.02, Insurance
5-23 Code, are amended to read as follows:
5-24 (a) In addition to the requirements for capital and surplus
5-25 provided by this article, the commissioner <board> may adopt rules,
5-26 regulations, and guidelines requiring any company subject to this
5-27 chapter, or any alien or foreign company admitted in this state to
6-1 do the types of business authorized by this chapter, <that writes
6-2 or assumes life insurance, annuity contracts or liability on, or
6-3 indemnifies any one person for, any risk under a health, accident,
6-4 sickness, or hospitalization policy, or any combination of those
6-5 policies, in an amount in excess of $10,000,> to maintain capital
6-6 and surplus levels in excess of the minimum levels required by
6-7 either Section 1 or Section 2 of this article for that company
6-8 based upon any of the following factors:
6-9 1. the nature and type of risks a company underwrites
6-10 or reinsures;
6-11 2. the premium volume of risks a company underwrites
6-12 or reinsures;
6-13 3. the composition, quality, duration, fluctuations in
6-14 market value, or liquidity of a company's assets <investment
6-15 portfolio>;
6-16 4. other business risks and other relevant risks
6-17 established under the risk-based capital rules adopted by the
6-18 commissioner <fluctuations in the market value of securities a
6-19 company holds>; or
6-20 5. the adequacy of a company's reserves.
6-21 (b) The rules adopted under this section shall be designed
6-22 to ensure the financial solvency of companies for the protection of
6-23 policyholders. The commissioner may specify and direct in the
6-24 rules which regulatory actions, requirements, and remedies shall be
6-25 taken against a company as a consequence of the application of the
6-26 rules to that company<, but may not, according to the dates
6-27 specified below, require that the total admitted assets of a
7-1 company exceed the following percentages of its total liabilities:>
7-2 <1. as of December 31, 1992, 103 percent;>
7-3 <2. as of December 31, 1993, 103 percent;>
7-4 <3. as of December 31, 1994, 103 percent;>
7-5 <4. as of December 31, 1995, 104 percent;>
7-6 <5. as of December 31, 1996, 105 percent; and>
7-7 <6. as of December 31, 1997, 106 percent>.
7-8 SECTION 6. Article 3.10(l), Insurance Code, is amended to
7-9 read as follows:
7-10 (l) An insurer shall account for reinsurance agreements and
7-11 shall record those reinsurance agreements in the insurer's
7-12 financial statement in a manner that accurately reflects the effect
7-13 of the reinsurance agreements on the financial condition of the
7-14 company. The State Board of Insurance may adopt reasonable rules
7-15 relating to the accounting and financial statement requirements of
7-16 this section and the treatment of reinsurance agreements between
7-17 insurance companies, including minimum risk transfer standards,
7-18 asset debits or credits, reinsurance debits or credits, and reserve
7-19 debits or credits relating to the transfer of risks or liabilities
7-20 by reinsurance agreements and any contingencies arising from
7-21 reinsurance agreements.
7-22 SECTION 7. Subchapter B, Chapter 3, Insurance Code, is
7-23 amended by adding Article 3.27-4 to read as follows:
7-24 Art. 3.27-4. APPLICATION OF CERTAIN SOLVENCY REQUIREMENTS.
7-25 Articles 3.02 and 21.49-8 of this code apply to an insurance
7-26 company subject to this subchapter.
7-27 SECTION 8. Article 3.60, Insurance Code, is amended to read
8-1 as follows:
8-2 Art. 3.60. Impairment of Capital or Surplus. No impairment
8-3 of capital shall be permitted for companies either incorporated or
8-4 authorized to do the lines of business authorized in this chapter.
8-5 No impairment of more than 90 percent of the statutory minimum
8-6 surplus required of a company under Article 3.02 of this code shall
8-7 be permitted, and no impairment of a company's surplus required by
8-8 the <board promulgated> risk-based capital and surplus rules
8-9 adopted by the commissioner <regulations> shall be permitted. If
8-10 the commissioner determines that either the capital is impaired or
8-11 the surplus of a company is impaired in excess of such permissible
8-12 amount, the commissioner shall order the company to immediately
8-13 reduce the impairment to acceptable levels specified by the
8-14 commissioner or to cease to do business within this state. The
8-15 commissioner shall thereupon institute such proceedings as may be
8-16 necessary to determine what further actions shall be taken in the
8-17 matter.
8-18 SECTION 9. Article 4.07, Insurance Code, is amended by
8-19 adding Section I to read as follows:
8-20 I. An insurer who files an application with the department
8-21 to be exempt from classification as a commercially domiciled
8-22 insurer shall pay an application fee to the department. The
8-23 commissioner shall set the fee in an amount reasonable and
8-24 necessary to cover the costs of processing the application.
8-25 SECTION 10. Section 2, Article 9.47, Insurance Code, is
8-26 amended to read as follows:
8-27 Sec. 2. Regardless of Section 1 of this Article, where
9-1 applicable to title insurance companies, Article 1.01 through 1.25;
9-2 Article 2.01; Article 2.02<, Sections 1, 2 and 3>; Article 2.03,
9-3 except Section 5; Article 2.04; Article 2.05; Article 2.06; Article
9-4 3.01, Section 10(a), (b) and (c); Article 3.12, except Section (c);
9-5 Article 3.13; Article 3.14; Article 21.21; Article 21.21-1; Article
9-6 21.25; Article 21.26; Article 21.31; Article 21.36; Article 21.37;
9-7 Article 21.43; Article 21.46; <and> Article 21.47; Article 21.49-8;
9-8 and Subchapter F of Chapter 5 of this code shall apply to and
9-9 govern title insurance companies where applicable thereto. In case
9-10 of conflict between provisions of any of the foregoing articles and
9-11 the provisions of this Chapter Nine, the latter shall govern.
9-12 SECTION 11. Section 16.24(b), Insurance Code, is amended to
9-13 read as follows:
9-14 (b) Regardless of the preceding portion of this Article,
9-15 Articles 1.01, 1.02, 1.04, 1.08, 1.09, 1.09-1, 1.11, 1.12, 1.13,
9-16 1.14, 1.15, 1.15A, 1.16, 1.17, 1.18, 1.19, 1.20, 1.21, 1.22, 1.23,
9-17 1.24, 1.29, 2.08, 2.10, 2.20, 3.12, 3.13, 6.16, 21.21, 21.25,
9-18 21.28, 21.28-A, 21.28-B, 21.28-C, 21.39, 21.39-A, 21.49-8, and
9-19 Sections 10(a), (b) and (c) of Article 3.01 and Sections 1, 2, 5,
9-20 6, 7, 8, 9, 10, 11, 13, 14 and 17 of Article 1.10 of the Insurance
9-21 Code as they now exist or shall hereafter be amended shall apply to
9-22 and govern farm mutual insurance companies except where such
9-23 Articles or portions thereof are in conflict with the provisions of
9-24 Chapter 16 of the Insurance Code.
9-25 SECTION 12. Section 17.22(a), Insurance Code, is amended to
9-26 read as follows:
9-27 (a) County mutual insurance companies shall be exempt from
10-1 the operation of all insurance laws of this state, except such laws
10-2 as are made applicable by their specific terms or as in this
10-3 Chapter specifically provided. In addition to such other Articles
10-4 as may be made to apply by other Articles of this Code, county
10-5 mutual insurance companies shall be subject to:
10-6 (1) <all the provisions of Article 1.04(e), and of>
10-7 Subdivision 7 of Article 1.10 of this Code;
10-8 (2) Articles <and of Article> 1.15A, <and of Article>
10-9 1.24, <and of Article> 2.04, <and of Article> 2.05, <and of
10-10 Article> 2.08, <and of Article> 2.10, 2.20, <and of Article> 5.12,ª
10-11 <and of Article> 5.37, <and of Article> 5.38, <and of Article>
10-12 5.39, <and of Article> 5.40, <and of Article> 5.49, <and of
10-13 Article> 21.21, <and of Article> 21.28B, <and of Article> 21.49,
10-14 and 21.49-8 of this Code; <,> and
10-15 (3) <the provisions of> Article 7064, <of the> Revised
10-16 <Civil> Statutes <of Texas, 1925>.
10-17 SECTION 13. Section 18.23(b), Insurance Code, is amended to
10-18 read as follows:
10-19 (b) In addition to such Articles as may be made to apply by
10-20 other Articles of this Chapter, underwriters at a Lloyds' shall not
10-21 be exempt from and shall be subject to Articles <all of the
10-22 provisions of Article> 1.15A, 2.02, <and of Article> 2.20, <and of
10-23 Article> 5.35, <and of Article> 5.38, <and of Article> 5.39, <a
10-24 of Article> 5.40, <and of Article> 5.49, <and of Article> 21.21,
10-25 and 21.49-8 of this Code.
10-26 SECTION 14. Section 19.12(b), Insurance Code, is amended to
10-27 read as follows:
11-1 (b) In addition to such Articles as may be made to apply by
11-2 other Articles of this Code, reciprocal or inter-insurance
11-3 exchanges shall not be exempt from and shall be subject to:
11-4 (1) <all of the provisions of> Section 5, <of> Article
11-5 1.10 of this Code; and
11-6 (2) Articles <of Article> 1.15, <and of Article>
11-7 1.15A, <and of Article> 1.16, 2.20, <and of Article> 5.35, <and ofª
11-8 Article> 5.36, <and of Article> 5.37, <and of Article> 5.38, <a
11-9 of Article> 5.39, <and of Article> 5.40, <and of Article> 6.12,
11-10 <and of Article> 8.07, <and of Article> 21.21, and 21.49-8 of this
11-11 Code.
11-12 SECTION 15. Section 13, Texas Health Maintenance
11-13 Organization Act (Article 20A.13, Vernon's Texas Insurance Code),
11-14 is amended to read as follows:
11-15 Sec. 13. Protection Against Insolvency. (a) Unless
11-16 otherwise provided by this section, each health maintenance
11-17 organization shall deposit with the State Treasurer cash or
11-18 securities, or any combination of these or other guarantees that
11-19 are acceptable to the department <State Board of Insurance>, in an
11-20 amount as set forth in this section.
11-21 (b) Except as provided by Subsection (c) of this section,
11-22 each <For a> health maintenance organization shall deposit and
11-23 maintain <which has not received a certificate of authority from
11-24 the State Board of Insurance prior to September 1, 1987:>
11-25 <(1) the amount of the initial deposit or other
11-26 guarantee shall be $100,000 for an organization offering basic
11-27 health care services and $50,000 for an organization offering a
12-1 single health care service plan;>
12-2 <(2) on or before March 15 of the year following the
12-3 year in which the health maintenance organization receives a
12-4 certificate of authority, it shall deposit with the State
12-5 Treasurer> an amount equal to the sum of <difference between the
12-6 initial deposit and> 100 percent of its estimated uncovered health
12-7 care expenses plus an amount set by the commissioner of at least
12-8 $50,000 <for the first 12 months of operation;>
12-9 <(3) on or before March 15 of each subsequent year, it
12-10 shall deposit the difference between its total uncovered health
12-11 care expenses based on its annual statement from the previous year
12-12 and the total amount previously deposited and not withdrawn from
12-13 the State Treasury; and>
12-14 <(4) in any year in which the amount determined in
12-15 accordance with Subdivision (3) of this subsection is zero or less
12-16 than zero, the State Board of Insurance may not require the health
12-17 maintenance organization to make any additional deposit under this
12-18 subsection>.
12-19 (c) <For a health maintenance organization which has
12-20 received a certificate of authority from the State Board of
12-21 Insurance prior to September 1, 1987:>
12-22 <(1) on or before March 15, 1988, the organization
12-23 shall deposit an amount equal to the sum of:>
12-24 <(A) $100,000 for an organization offering basic
12-25 health care services or $50,000 for an organization offering a
12-26 single health care service plan; and>
12-27 <(B) 100 percent of the uncovered health care
13-1 expenses for the preceding 12 months of operation;>
13-2 <(2) on or before March 15 of each subsequent year,
13-3 the organization shall make additional deposits of the difference
13-4 between its total uncovered health care expenses based on its
13-5 annual statement from the previous year and the total amount
13-6 previously deposited and not withdrawn from the State Treasury; and>
13-7 <(3) in any year in which the amount determined in
13-8 accordance with Subdivision (2) of this subsection is zero or less
13-9 than zero, the State Board of Insurance may not require the health
13-10 maintenance organization to make any additional deposit under this
13-11 subsection.>
13-12 <(d) If, on application made not more than once in each
13-13 calendar year by a health maintenance organization under this
13-14 subsection, the commissioner determines that the amount previously
13-15 deposited by the organization under this section has exceeded the
13-16 amount required under this section by more than $50,000 for a
13-17 continuous 12-month period, the commissioner shall allow the
13-18 organization to withdraw the portion of the deposit that exceeds by
13-19 more than $50,000 the amount required to be on deposit for that
13-20 organization, unless the commissioner considers that the release of
13-21 a portion of the deposit could be hazardous to enrollees,
13-22 creditors, or the general public.>
13-23 <(e) On application made not sooner than the 24th month
13-24 after the effective date of this subsection, if the commissioner
13-25 determines that the amount previously deposited by an organization
13-26 under this section continues to exceed the amount required under
13-27 this section, the commissioner shall allow the organization to
14-1 withdraw the portion of the deposit that exceeds the amount
14-2 required to be on deposit for that organization, unless the
14-3 commissioner considers that the release of the deposit could be
14-4 hazardous to enrollees, creditors, or the general public.>
14-5 <(f)> Upon application by a health maintenance organization
14-6 operating for more than one year under a certificate of authority
14-7 issued by the department <State Board of Insurance>, the department
14-8 <State Board of Insurance> may waive some or all of the
14-9 requirements of Subsection (b) <or (c)> of this section if <for any
14-10 period of time it shall deem proper whenever> it finds that the
14-11 <one or more of the following conditions justifies such waiver:>
14-12 <(1) the total amount of the deposit or other
14-13 guarantee is equal to 25 percent of the health maintenance
14-14 organization's estimated uncovered expenses for the next calendar
14-15 year;>
14-16 <(2) the health maintenance organization's net worth
14-17 is equal to at least 25 percent of its estimated uncovered expenses
14-18 for the next calendar year; or>
14-19 <(3) either the health maintenance organization has a
14-20 net worth of $5,000,000 or its> sponsoring organization of the
14-21 health maintenance organization has a net worth of at least $20
14-22 million <$5,000,000> for each health maintenance organization whose
14-23 uncovered expenses it guarantees.
14-24 (d) <(g)> If one or more of the requirements is waived, any
14-25 amount previously deposited shall remain on deposit until released
14-26 in whole or in part by the State Treasurer upon order of the State
14-27 Board of Insurance pursuant to Subsection (c) <(f)> of this
15-1 section.
15-2 (e) <(h)> A health maintenance organization that has made a
15-3 deposit with the State Treasurer may, at its option, withdraw the
15-4 deposit or any part thereof, first having deposited with the State
15-5 Treasurer, in lieu thereof, a deposit of cash or securities of
15-6 equal amount and value to that withdrawn. Any securities shall be
15-7 approved by the State Board of Insurance before being substituted.
15-8 (f) <(i)> Each health maintenance organization offering
15-9 basic health care services shall maintain a minimum surplus of not
15-10 less than $500,000, net of accrued uncovered liabilities. Each
15-11 health maintenance organization offering only a single care service
15-12 shall maintain a minimum surplus of not less than $125,000, net of
15-13 accrued uncovered liabilities. The minimum surplus shall consist
15-14 only of cash, bonds of the United States, bonds of this state, or a
15-15 combination of these. If a health maintenance organization fails
15-16 to comply with the surplus requirement of this subsection <or
15-17 Subsection (j) of this section>, the commissioner is authorized to
15-18 take appropriate action to assure that the continued operation of
15-19 the health maintenance organization will not be hazardous to its
15-20 enrollees.
15-21 <(j) The minimum surplus for a health maintenance
15-22 organization authorized to operate on the effective date of
15-23 Subsection (i) of this section and having a surplus of less than
15-24 $500,000 shall be as follows:>
15-25 <(1) $200,000 by December 31, 1987;>
15-26 <(2) $250,000 by December 31, 1988;>
15-27 <(3) $300,000 by December 31, 1989;>
16-1 <(4) $350,000 by December 31, 1990;>
16-2 <(5) $400,000 by December 31, 1991;>
16-3 <(6) $450,000 by December 31, 1992; and>
16-4 <(7) $500,000 by December 31, 1993.>
16-5 <(k) Notwithstanding any other provision of this article, a
16-6 health maintenance organization authorized to offer only a single
16-7 health care service plan authorized to operate on September 1,
16-8 1987, and having a surplus of less than $125,000 shall be as
16-9 follows:>
16-10 <(1) $50,000 by December 31, 1987;>
16-11 <(2) $62,500 by December 31, 1988;>
16-12 <(3) $75,000 by December 31, 1989;>
16-13 <(4) $87,500 by December 31, 1990;>
16-14 <(5) $100,000 by December 31, 1991;>
16-15 <(6) $112,500 by December 31, 1992; and>
16-16 <(7) $125,000 by December 31, 1993.>
16-17 SECTION 16. Section 26(i), Texas Health Maintenance
16-18 Organization Act (Article 20A.26, Vernon's Texas Insurance Code),
16-19 is amended to read as follows:
16-20 (i) Any health maintenance organization authorized under
16-21 this Act shall be subject to:
16-22 (1) Articles 3.02 and 21.49-8, Insurance Code; and
16-23 (2) Article 3.51-6, Section 3B, Insurance Code.
16-24 SECTION 17. Section 19, Managing General Agents' Licensing
16-25 Act (Article 21.07-3, Vernon's Texas Insurance Code), is amended to
16-26 read as follows:
16-27 Sec. 19. PENALTIES AND LIABILITIES <VIOLATIONS OF ACT>. (a)
17-1 If, after notice and hearing as provided by the Insurance Code, the
17-2 commissioner determines that any <Any> person, firm, or corporation
17-3 has violated <who violates any of the provisions of> this Act or
17-4 any rule, regulation, or order adopted under this Act, the
17-5 commissioner may:
17-6 (1) impose and enforce any sanction authorized by law
17-7 against the violator, including the penalties imposed under
17-8 Articles <shall be subject to sanctions under Section 7, Article>
17-9 1.10 and 1.10A, Insurance Code; or
17-10 (2) order the person, firm, or corporation to pay
17-11 restitution to the affected insurer or policyholders for the net
17-12 losses attributable to the violation.
17-13 (b) If an order of rehabilitation or liquidation of the
17-14 insurer has been entered under Article 21.28 or 21.28-A, Insurance
17-15 Code, the receiver or conservator appointed under the order may
17-16 bring a civil action for recovery of damages or other appropriate
17-17 sanctions for the benefit of the insurer if the receiver or
17-18 conservator determines that:
17-19 (1) the managing general agent or any other person has
17-20 violated this Act or a rule or order adopted under this Act; and
17-21 (2) the insurer has suffered a loss or damages based
17-22 on that violation.
17-23 (c) This section does not affect the authority of the
17-24 commissioner to impose any other penalty authorized by law.
17-25 (d) This Act does not limit or restrict the rights of
17-26 policyholders, claimants, creditors, or other third parties.
17-27 SECTION 18. Section 10, Reinsurance Intermediary Act
18-1 (Article 21.07-7, Insurance Code), is amended to read as follows:
18-2 Sec. 10. PENALTIES AND LIABILITIES. (a) If, after notice
18-3 and hearing as provided in this code, the commissioner determines
18-4 that a reinsurance intermediary, insurer, or reinsurer has violated
18-5 this article, the commissioner may:
18-6 (1) impose and enforce any sanction authorized by law
18-7 against the violator, including the penalties imposed under
18-8 Articles 1.10 and 1.10A of this code; or
18-9 (2) order the reinsurance intermediary, insurer, or
18-10 reinsurer to pay restitution to the affected insurers or reinsurers
18-11 for the net losses attributable to the violation.
18-12 (b) If a nonlicensed reinsurance intermediary violates this
18-13 article, the commissioner may impose and enforce any sanctions
18-14 authorized by law against the nonlicensed reinsurance intermediary,
18-15 including the penalties imposed under Article 1.14-1 of this code.
18-16 (c) If an order of rehabilitation or liquidation of the
18-17 insurer has been entered under Article 21.28 or 21.28-A of this
18-18 code, the receiver or conservator appointed under the order may
18-19 bring a civil action for recovery of damages or other appropriate
18-20 sanctions for the benefit of the insurer if the receiver or
18-21 conservator determines that:
18-22 (1) the reinsurance intermediary or any other person
18-23 has violated this article or a rule or order adopted under this
18-24 article; and
18-25 (2) the insurer has suffered a loss or damages based
18-26 on that violation.
18-27 (d) <(b)> Appeal from a final decision by the commissioner
19-1 may be made to a district court in Travis County. Review of the
19-2 commissioner's decision by the district court is subject to the
19-3 substantial evidence rule.
19-4 (e) <(c)> This section does not affect the right of the
19-5 commissioner to impose any other penalties authorized by law.
19-6 (f) <(d)> This article does not limit or restrict the rights
19-7 of policyholders, claimants, creditors, or other third parties <or
19-8 confer any additional rights on those persons>.
19-9 SECTION 19. Subchapter E, Chapter 21, Insurance Code, is
19-10 amended by adding Article 21.29 to read as follows:
19-11 Art. 21.29. APPLICATION OF RISK-BASED CAPITAL AND SURPLUS
19-12 RULES TO OTHER INSURERS
19-13 Sec. 1. Article 2.02 of this code applies to the following
19-14 insurers authorized to do business as an insurance company or to
19-15 provide insurance in this state:
19-16 (1) a mutual company other than a life company;
19-17 (2) a title insurance company;
19-18 (3) a statewide mutual assessment company;
19-19 (4) a county mutual company;
19-20 (5) a Lloyd's plan company;
19-21 (6) a reciprocal or interinsurance exchange;
19-22 (7) a risk retention group;
19-23 (8) a farm mutual company;
19-24 (9) a mutual assessment company;
19-25 (10) a Mexican casualty company; and
19-26 (11) a nonprofit legal service corporation.
19-27 Sec. 2. Article 3.02 of this code applies to the following
20-1 insurers authorized to do business as an insurance company or to
20-2 provide insurance in this state:
20-3 (1) a mutual life company;
20-4 (2) a fraternal benefit society;
20-5 (3) a local mutual aid association;
20-6 (4) a stipulated premium company;
20-7 (5) a group hospital service company;
20-8 (6) a health maintenance organization;
20-9 (7) a local mutual burial association; and
20-10 (8) a nonprofit hospital, medical, or dental service
20-11 corporation.
20-12 SECTION 20. Article 21.44, Insurance Code, is amended to
20-13 read as follows:
20-14 Art. 21.44. Capital and Surplus Requirements for Foreign or
20-15 Alien Insurance Companies Other Than Life. (a) No foreign or
20-16 alien insurance company subject to the provisions of Article 21.43
20-17 of this code shall be permitted to do business within this State
20-18 unless it shall have and maintain the minimum requirements of this
20-19 Code as to capital or surplus or both, applicable to companies
20-20 organized under this Code doing the same kind or kinds of business.
20-21 (b) Articles 2.20 and 21.49-8 of this code apply to an
20-22 insurance company subject to this article.
20-23 SECTION 21. Section 4(c), Article 21.49-1, Insurance Code,
20-24 is amended to read as follows:
20-25 (c) Dividends and Other Distributions. (1) No insurer
20-26 subject to registration under Section 3 shall pay any extraordinary
20-27 dividend or make any other extraordinary distribution to its
21-1 shareholders until (i) 30 days after the commissioner has received
21-2 notice of the declaration thereof and has not within such period
21-3 disapproved such payment, or (ii) the commissioner shall have
21-4 approved such payment within such 30-day period.
21-5 (2) For purposes of this section an extraordinary
21-6 dividend or distribution includes any dividend or distribution of
21-7 cash or other property, whose fair market value together with that
21-8 of other dividends or distributions made within the preceding 12
21-9 months exceeds the greater of (i) 10 percent (20 percent if such
21-10 insurer is a title insurer) of such insurer's surplus as regards
21-11 policyholders as of the 31st day of December next preceding, or
21-12 (ii) the net gain from operations of such insurer, if such insurer
21-13 is a life or title insurer, or the net <investment> income, if such
21-14 insurer is not a life or title insurer, for the 12-month period
21-15 ending the 31st day of December next preceding, but shall not
21-16 include pro rata distributions of any class of the insurer's own
21-17 securities; provided, that for the purposes of this subdivision,
21-18 "net gain from operations" and "net income" include net realized
21-19 capital gains in an amount not to exceed 20 percent of net
21-20 unrealized capital gains.
21-21 (3) Notwithstanding any other provision of law, an
21-22 insurer may declare an extraordinary dividend or distribution which
21-23 is conditional upon the commissioner's approval thereof, and such a
21-24 declaration shall confer no rights upon shareholders until (i) the
21-25 commissioner has approved the payment of such dividend or
21-26 distribution or (ii) the commissioner has not disapproved such
21-27 payment within the 30-day period referred to above.
22-1 SECTION 22. Subchapter E, Chapter 21, Insurance Code, is
22-2 amended by adding Article 21.49-8 to read as follows:
22-3 Art. 21.49-8. DISCLOSURE OF MATERIAL TRANSACTIONS REPORT
22-4 Sec. 1. APPLICATION. This article applies to any insurer
22-5 authorized to do business as an insurance company or to provide
22-6 insurance in this state, including:
22-7 (1) a capital stock company;
22-8 (2) a mutual company;
22-9 (3) a title insurance company;
22-10 (4) a fraternal benefit society;
22-11 (5) a local mutual aid association;
22-12 (6) a mutual assessment company, including a statewide
22-13 mutual assessment company;
22-14 (7) a county mutual company;
22-15 (8) a Lloyd's plan company;
22-16 (9) a reciprocal or interinsurance exchange;
22-17 (10) a stipulated premium company;
22-18 (11) a group hospital service corporation;
22-19 (12) a health maintenance organization;
22-20 (13) a risk retention group;
22-21 (14) a farm mutual company;
22-22 (15) a Mexican casualty company;
22-23 (16) a nonprofit legal service corporation;
22-24 (17) a local mutual burial association; and
22-25 (18) a nonprofit hospital, medical, or dental service
22-26 corporation.
22-27 Sec. 2. REPORT. (a) Unless the acquisitions and
23-1 dispositions of material assets and the nonrenewal, cancellation,
23-2 or revisions of material ceded reinsurance agreements have been
23-3 submitted to the commissioner for review, approval, or information
23-4 under other provisions of this code, other laws, regulations, or
23-5 other requirements, each insurer shall file a report with the
23-6 commissioner that discloses:
23-7 (1) material acquisitions and dispositions of assets;
23-8 or
23-9 (2) material nonrenewals, cancellations, or revisions
23-10 of ceded reinsurance agreements.
23-11 (b) The report required under Subsection (a) of this section
23-12 must be filed not later than the 15th day after the last day of the
23-13 calendar month in which any of the affected transactions occur.
23-14 (c) The insurer also shall file one complete copy of the
23-15 report, including any necessary exhibits or other attachments, with
23-16 the department.
23-17 (d) A report obtained by or disclosed to the commissioner
23-18 under this article is not subject to a subpoena, other than a grand
23-19 jury subpoena, and is not subject to disclosure under Chapter 552,
23-20 Government Code (the open records law). This subsection does not
23-21 affect the conduct of a contested case under Chapter 2001,
23-22 Government Code (the administrative procedure law).
23-23 (e) The department may disclose a report or the information
23-24 contained in a report to:
23-25 (1) the National Association of Insurance
23-26 Commissioners; or
23-27 (2) an agency of this state, another state, or the
24-1 United States.
24-2 (f) If the commissioner determines that the interest of
24-3 policyholders, shareholders, or the public will be served by the
24-4 publication of a report, the department may disclose a report to
24-5 the public and may publish all or any part of the report in any
24-6 manner approved by the commissioner.
24-7 (g) The commissioner and an employee of the department are
24-8 not liable for the release of a report or any information contained
24-9 in a report unless the claimant demonstrates that the person from
24-10 whom damages are sought released the report with actual malice.
24-11 Sec. 3. ACQUISITIONS AND DISPOSITIONS OF ASSETS. (a) An
24-12 insurer is not required to report an acquisition or disposition of
24-13 assets under Section 1 of this article if the acquisition or
24-14 disposition is not material. For purposes of this article, an
24-15 acquisition, or the aggregate of a series of related acquisitions
24-16 during a 30-day period, or a disposition, or the aggregate of a
24-17 series of related dispositions during a 30-day period, is material
24-18 if it:
24-19 (1) is not recurring;
24-20 (2) is not in the ordinary course of business; and
24-21 (3) involves more than five percent of the reporting
24-22 insurer's total admitted assets as reported in its most recent
24-23 statutory statement filed with the department.
24-24 (b) An asset acquisition subject to this article includes
24-25 each purchase, lease, exchange, merger, consolidation, succession,
24-26 or other acquisition, other than the construction or development of
24-27 real property by or for the reporting insurer or the acquisition of
25-1 materials for that purpose.
25-2 (c) An asset disposition subject to this article includes
25-3 each sale, lease, exchange, merger, consolidation, mortgage,
25-4 hypothecation, assignment, whether for the benefit of creditors or
25-5 otherwise, abandonment, destruction, or other disposition.
25-6 (d) The following information must be disclosed in a report
25-7 of a material acquisition or disposition of assets:
25-8 (1) the date of the transaction;
25-9 (2) the manner of acquisition or disposition;
25-10 (3) a description of the assets involved;
25-11 (4) the nature and amount of the consideration given
25-12 or received;
25-13 (5) the purpose of or reason for the transaction;
25-14 (6) the manner by which the amount of consideration
25-15 was determined;
25-16 (7) the gain or loss recognized or realized as a
25-17 result of the transaction; and
25-18 (8) the name of each person from whom the assets were
25-19 acquired or to whom they were disposed.
25-20 (e) An insurer shall report material acquisitions and
25-21 dispositions on a nonconsolidated basis unless the insurer:
25-22 (1) is part of a consolidated group of insurers that
25-23 uses a pooling arrangement or a 100 percent reinsurance agreement
25-24 that affects the solvency and integrity of the insurer's reserves;
25-25 and
25-26 (2) ceded substantially all of its direct and assumed
25-27 business to the pooling arrangement.
26-1 (f) For purposes of Subsection (e), an insurer is considered
26-2 to have ceded substantially all of its direct and assumed business
26-3 to a pooling arrangement if:
26-4 (1) the insurer has, during a calendar year, less than
26-5 $1,000,000 total direct and assumed written premiums that are not
26-6 subject to a pooling arrangement; and
26-7 (2) the net income of the business not subject to the
26-8 pooling arrangement represents less than five percent of the
26-9 insurer's capital and surplus.
26-10 Sec. 4. NONRENEWALS, CANCELLATIONS, OR REVISIONS OF CEDED
26-11 INSURANCE. (a) An insurer is not required to report a nonrenewal,
26-12 cancellation, or revision of a ceded reinsurance agreement under
26-13 Section 1 of this article if the nonrenewal, cancellation, or
26-14 revision is not material. For purposes of this article, a
26-15 nonrenewal, cancellation, or revision is material if it affects, on
26-16 an annual basis, as indicated in the insurer's most recently filed
26-17 statutory statement:
26-18 (1) for property and casualty business, including
26-19 accident and health business when written as property and casualty
26-20 business, more than 50 percent of an insurer's ceded written
26-21 premium; or
26-22 (2) for life, annuity, and accident and health
26-23 business, more than 50 percent of the total reserve credit taken
26-24 for business ceded.
26-25 (b) An insurer is not required to report if the insurer's
26-26 ceded written premium of the total reserve credit taken for
26-27 business ceded represents, on an annual basis, less than:
27-1 (1) 10 percent of direct and assumed written premiums;
27-2 or
27-3 (2) 10 percent of the statutory reserve requirement
27-4 before a cession.
27-5 (c) Subject to the requirements imposed under Subsections
27-6 (a) and (b) of this section, an insurer shall file a report without
27-7 regard to which party initiated the nonrenewal, cancellation, or
27-8 revision of ceded reinsurance when one or more of the following
27-9 conditions exist:
27-10 (1) the entire cession has been canceled, nonrenewed,
27-11 or revised, and ceded indemnity and loss adjustment expense
27-12 reserves after the nonrenewal, cancellation, or revision represent
27-13 less than 50 percent of the comparable reserves that would have
27-14 been ceded had the nonrenewal, cancellation, or revision not
27-15 occurred;
27-16 (2) an authorized or accredited reinsurer has been
27-17 replaced on an existing cession by an unauthorized reinsurer; or
27-18 (3) collateral requirements previously established for
27-19 unauthorized reinsurers have been reduced in that the requirement
27-20 to collateralize incurred but not reported claim reserves has been
27-21 waived for one or more unauthorized reinsurers newly participating
27-22 in an existing cession.
27-23 (d) Subject to the requirement of materiality, for purposes
27-24 of Subsections (c)(2) and (3), an insurer shall file a report if
27-25 the result of the revision affects more than 10 percent of the
27-26 cession.
27-27 (e) An insurer shall disclose the following information in a
28-1 report of a material nonrenewal, cancellation, or revision of a
28-2 ceded reinsurance agreement:
28-3 (1) the effective date of the nonrenewal,
28-4 cancellation, or revision;
28-5 (2) a description of the transaction that identifies
28-6 the initiator of the transaction;
28-7 (3) the purpose of or reason for the transaction; and
28-8 (4) if applicable, the identity of the replacement
28-9 reinsurers.
28-10 (f) An insurer shall report all material nonrenewals,
28-11 cancellations, or revisions of ceded reinsurance agreements on a
28-12 nonconsolidated basis unless the insurer:
28-13 (1) is part of a consolidated group of insurers that
28-14 uses a pooling arrangement or 100 percent reinsurance agreement
28-15 that affects the solvency and integrity of the insurer's reserves;
28-16 and
28-17 (2) ceded substantially all of its direct and assumed
28-18 business to the pooling arrangement.
28-19 (g) For purposes of Subsection (f) of this section, an
28-20 insurer is considered to have ceded substantially all of its direct
28-21 and assumed business to a pooling arrangement if:
28-22 (1) the insurer has, during a calendar year, less than
28-23 $1,000,000 total direct and assumed written premiums that are not
28-24 subject to the pooling arrangement; and
28-25 (2) the net income of the business not subject to the
28-26 pooling arrangement represents less than five percent of the
28-27 insurer's capital and surplus.
29-1 SECTION 23. Subchapter E, Chapter 21, Insurance Code, is
29-2 amended by adding Article 21.72 to read as follows:
29-3 Art. 21.72. GENERAL REINSURANCE REQUIREMENTS
29-4 Sec. 1. (a) An insurance company incorporated under the
29-5 laws of another state or the United States and authorized to do
29-6 business in this state may not expose itself to any loss or hazard
29-7 on any one risk in an amount that exceeds 10 percent of the
29-8 company's paid-up capital stock and surplus unless the excess is
29-9 reinsured by the company in another solvent insurer.
29-10 (b) An insurance company incorporated under a jurisdiction
29-11 other than that of this state, another state, or the United States
29-12 and authorized to do business in this state may not expose itself
29-13 to any loss or hazard on any one risk in an amount that exceeds 10
29-14 percent of the company's deposit with the statutory officer in the
29-15 state through which the company gains admission to the United
29-16 States, together with 10 percent of the other surplus to
29-17 policyholders of the company's United States branch, unless the
29-18 excess is reinsured by the company in another solvent insurer.
29-19 Sec. 2. An insurance or reinsurance company authorized to
29-20 transact insurance or reinsurance in this state may reinsure the
29-21 whole or any part of an individual risk in another solvent insurer.
29-22 Sec. 3. This article does not apply to:
29-23 (1) life insurance;
29-24 (2) health insurance;
29-25 (3) annuity contracts;
29-26 (4) title insurance;
29-27 (5) workers' compensation insurance;
30-1 (6) employers' liability insurance coverage; or
30-2 (7) any policy or type of coverage as to which the
30-3 maximum possible loss to the insurer is not readily ascertainable
30-4 on issuance of the policy.
30-5 Sec. 4. Any reinsurance required or permitted by this
30-6 article must comply with Article 5.75-1 of this code.
30-7 SECTION 24. Sections 2(e) and (f), Article 22.13, Insurance
30-8 Code, are amended to read as follows:
30-9 (e) In addition to the capital requirements under Subsection
30-10 (d) of this section, the board may adopt rules and regulations
30-11 requiring a stipulated premium company <that writes or assumes life
30-12 insurance, annuity contracts or health, accident, sickness or
30-13 hospitalization insurance for any risk in excess of $10,000 to any
30-14 one person> to maintain capital and surplus levels in excess of the
30-15 statutory minimum capital levels required by this chapter <Chapter
30-16 22 of this Code> based upon any of the following factors:
30-17 (1) the nature and type of risks a company underwrites
30-18 or reinsures;
30-19 (2) the premium volume of risks a company underwrites
30-20 or reinsures;
30-21 (3) the composition, quality, duration, fluctuations
30-22 in market value, or liquidity of a company's assets <investment
30-23 portfolio>;
30-24 (4) other business risks and other relevant risks
30-25 established under the risk-based capital rules adopted by the
30-26 commissioner <fluctuations in the market value of securities a
30-27 company holds>; or
31-1 (5) the adequacy of a company's reserves.
31-2 (f) The rules adopted under Subsection (e) of this section
31-3 shall be designed to assure the financial solvency of companies for
31-4 the protection of policyholders. The board may specify and direct
31-5 in the rules which regulatory actions, requirements, and remedies
31-6 shall be taken against a company as a result of the application of
31-7 the rules to that company <and may not, according to the dates
31-8 specified, require that the total admitted assets of a company
31-9 exceed the following percentages of its total liabilities:>
31-10 <(1) as of December 31, 1992, 103 percent;>
31-11 <(2) as of December 31, 1993, 103 percent;>
31-12 <(3) as of December 31, 1994, 103 percent;>
31-13 <(4) as of December 31, 1995, 104 percent;>
31-14 <(5) as of December 31, 1996, 105 percent; and>
31-15 <(6) as of December 31, 1997, 106 percent>.
31-16 SECTION 25. Section 1, Article 22.18, Insurance Code, is
31-17 amended to read as follows:
31-18 Sec. 1. The following Articles of this Code<, to wit>:
31-19 Article 1.14, Article 1.15, Article 1.15A, Article 1.16, Article
31-20 1.19, Article 1.24, Article 1.32, Article 3.02, Article 3.10,
31-21 Article 3.13, Article 3.39, Article 3.40, Article 3.61, Article
31-22 3.62, Article 3.63, Article 3.67, Article 21.07-7, Article 21.21,
31-23 Article 21.25, Article 21.26, Article 21.28, Article 21.32, Article
31-24 21.39, Article 21.45, <and> Article 21.47, and Article 21.49-8
31-25 shall apply to and govern stipulated premium companies and each
31-26 company shall comply with the provisions thereof.
31-27 SECTION 26. Section 23.26(b), Insurance Code, is amended to
32-1 read as follows:
32-2 (b) The following provisions of the Insurance Code as they
32-3 now exist or shall hereafter be amended shall, where not in
32-4 conflict with this chapter, apply to corporations complying with
32-5 the provisions of this chapter to the same extent as they apply to
32-6 insurers and to those doing the business of insurance: Articles
32-7 1.01, 1.02, 1.04, 1.08, 1.09, 1.09-1, 1.11, 1.12, 1.13, 1.14, 1.15,
32-8 1.15A, 1.16, 1.17, 1.18, 1.19, 1.20, 1.21, 1.22, 1.23, 1.24, 1.25,
32-9 1.29, 2.02, 2.20, 3.12, 3.13, 3.14, 21.21, 21.21-2, 21.25, 21.28,
32-10 21.28A, <and> 21.47, 21.49-8 and Sections 1, 2, 6, 8, 9, 10, 11,
32-11 12, 13, 14, and 17 of Article 1.10 of the Insurance Code, as
32-12 amended.
32-13 SECTION 27. Article 25.05, Insurance Code, is amended to
32-14 read as follows:
32-15 Art. 25.05. OTHER LAWS TO GOVERN. Chapter <Chapters> 2,
32-16 including Article 2.20, Chapter <and> 8, and Article 4.10 of this
32-17 code, and all other provisions of the Insurance Code, if not in
32-18 conflict with this chapter, shall apply to and govern any insurance
32-19 carrier operating under this chapter. In addition, Article 21.49-8
32-20 of this code applies to each insurance carrier operating under this
32-21 chapter.
32-22 SECTION 28. Section 551.079, Government Code, is amended to
32-23 read as follows:
32-24 Sec. 551.079. TEXAS DEPARTMENT <STATE BOARD> OF INSURANCE.
32-25 (a) The requirements of this chapter do not apply to a meeting of
32-26 the Texas Department <State Board> of Insurance or the commissioner
32-27 of insurance in the discharge of responsibilities to regulate and
33-1 maintain the solvency of a person regulated by the department
33-2 <board>.
33-3 (b) The exception created under this section also applies to
33-4 a meeting conducted by:
33-5 (1) the health maintenance organization solvency
33-6 surveillance committee established under Section 36, Texas Health
33-7 Maintenance Organization Act (Article 20A.36, Vernon's Texas
33-8 Insurance Code);
33-9 (2) a guaranty association established under the
33-10 Insurance Code; and
33-11 (3) any other entity organized under the Insurance
33-12 Code to monitor the solvency of a person regulated under that code.
33-13 (c) The commissioner of insurance <board> may <deliberate
33-14 and> determine the appropriate action to be taken concerning the
33-15 solvency of a person regulated by the department <board> in a
33-16 closed meeting with persons in one or more of the following
33-17 categories:
33-18 (1) staff of the department or of a guaranty
33-19 association <board>;
33-20 (2) a regulated person; or
33-21 (3) representatives of a regulated person.
33-22 SECTION 29. The following laws are repealed:
33-23 (1) Section 3A, Article 3.02, Insurance Code; and
33-24 (2) Article 5.61(b), Insurance Code.
33-25 SECTION 30. (a) Except as provided by Subsection (c) of
33-26 this section, this Act takes effect September 1, 1995.
33-27 (b) The commissioner of insurance shall adopt rules as
34-1 required by the Insurance Code, as amended by this Act, not later
34-2 than December 31, 1995.
34-3 (c) Section 13, Texas Health Maintenance Organization Act
34-4 (Article 20A.13, Vernon's Texas Insurance Code), as amended by
34-5 this Act, takes effect September 1, 1995. Each health maintenance
34-6 organization subject to that section shall deposit the amount
34-7 required under that section as amended by this Act with the state
34-8 treasurer not later than January 1, 1996.
34-9 SECTION 31. The importance of this legislation and the
34-10 crowded condition of the calendars in both houses create an
34-11 emergency and an imperative public necessity that the
34-12 constitutional rule requiring bills to be read on three several
34-13 days in each house be suspended, and this rule is hereby suspended.