1-1 By: Smithee (Senate Sponsor - Sibley) H.B. No. 1243
1-2 (In the Senate - Received from the House May 11, 1995;
1-3 May 16, 1995, read first time and referred to Committee on Economic
1-4 Development; May 22, 1995, reported favorably, as amended, by the
1-5 following vote: Yeas 9, Nays 0; May 22, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Sibley
1-7 Amend H.B. 1243, as engrossed, by inserting a new SECTION 18(c) of
1-8 the bill (house engrossment printing, page 17, between lines 20 and
1-9 21) to read as follows:
1-10 (c) Article 21.49-8, Insurance Code, as added by this Act,
1-11 takes effect only on certification by the commissioner of insurance
1-12 that the National Association of Insurance Commissioners has
1-13 provided to the commissioner in writing a total budgetary
1-14 disclosure as to the use by that association of funds received by
1-15 that association from states that are members of the association.
1-16 The commissioner shall issue a finding regarding the certification,
1-17 and shall publish the finding in the Texas Register.
1-18 A BILL TO BE ENTITLED
1-19 AN ACT
1-20 relating to requirements for certain insurers and health
1-21 maintenance organizations concerning financial solvency.
1-22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-23 SECTION 1. Article 1.39, Insurance Code, is amended by
1-24 amending Subsection (b) and adding Subsections (e) and (f) to read
1-25 as follows:
1-26 (b) An insurer may obtain a loan or an advance of cash, cash
1-27 equivalents, or other assets that have a readily determinable value
1-28 and are satisfactory to the commissioner <or property>, repayable
1-29 with interest, and may assume a subordinated liability for
1-30 repayment of the advance and payment of interest on the advance if
1-31 the insurer and creditor execute a written agreement stating that
1-32 the creditor may be paid only out of that portion of the insurer's
1-33 surplus that exceeds the greater of a minimum surplus stated and
1-34 fixed in the agreement or a minimum surplus of $500,000 for that
1-35 insurer. The department or the commissioner may not require the
1-36 agreement to provide another minimum surplus amount.
1-37 (e) An agreement entered into under Subsection (b) of this
1-38 article must be submitted to the commissioner for approval as to
1-39 form and content; provided, however, that the commissioner must
1-40 give his decision of either approval or disapproval within 30 days
1-41 after the written filing by the insurer, and his failure to so act
1-42 within such 30 days shall constitute approval of the transaction.
1-43 An insurer may not assume a subordinated liability until the
1-44 commissioner has approved the agreement under either Section 4,
1-45 Article 21.49-1, or this article. An insurer may not repay
1-46 principal or pay interest on a subordinated liability assumed under
1-47 either Section 4, Article 21.49-1, or this article on or after
1-48 September 1, 1995, unless either (i) such payment or repayment
1-49 complies with a specific schedule of payments contained within the
1-50 terms of the previously approved agreement, or (ii) written notice
1-51 is provided to the commissioner at least 15 days before the date
1-52 scheduled for any payment or repayment if either a schedule of
1-53 payments is not contained within the terms of the previously
1-54 approved agreement, or such payment or repayment does not comply
1-55 with the specific schedule of payments contained within the terms
1-56 of the previously approved agreement. A loan, debenture, revenue
1-57 bond, or advance agreement issued before September 1, 1995, and any
1-58 subsequent payment of interest or repayment of principal are
1-59 governed by the law in effect on the date of issuance.
1-60 (f) The commissioner shall adopt rules as necessary to
1-61 implement this article.
1-62 SECTION 2. Article 3.10(l), Insurance Code, is amended to
1-63 read as follows:
1-64 (l) An insurer shall account for reinsurance agreements and
1-65 shall record those reinsurance agreements in the insurer's
1-66 financial statement in a manner that accurately reflects the effect
1-67 of the reinsurance agreements on the financial condition of the
1-68 company. The State Board of Insurance may adopt reasonable rules
2-1 relating to the accounting and financial statement requirements of
2-2 this section and the treatment of reinsurance agreements between
2-3 insurance companies, including minimum risk transfer standards,
2-4 asset debits or credits, reinsurance debits or credits, and reserve
2-5 debits or credits relating to the transfer of all or any part of an
2-6 insurer's risks or liabilities by reinsurance agreements and any
2-7 contingencies arising from reinsurance agreements. Rules adopted
2-8 subsequent to September 1, 1995, shall apply to reinsurance
2-9 agreements entered into on or after the effective date of such
2-10 rules, and to reinsurance agreements that are amended on or after
2-11 the effective date of such rules. A reinsurance agreement may
2-12 contain a provision that allows the offset of mutual debts and
2-13 credits between a ceding insurer and the assuming insurer, whether
2-14 arising out of one or more reinsurance agreements.
2-15 SECTION 3. Subchapter B, Chapter 3, Insurance Code, is
2-16 amended by adding Article 3.27-4 to read as follows:
2-17 Art. 3.27-4. APPLICATION OF CERTAIN SOLVENCY REQUIREMENTS.
2-18 Articles 3.02 and 21.49-8 of this code apply to an insurance
2-19 company subject to this subchapter.
2-20 SECTION 4. Article 5.75-1(n), Insurance Code, is amended to
2-21 read as follows:
2-22 (n) An insurer shall account for reinsurance agreements and
2-23 shall record those agreements in the insurer's financial statements
2-24 in a manner that accurately reflects the effect of the reinsurance
2-25 agreements on the financial condition of the insurer. The State
2-26 Board of Insurance may adopt reasonable rules relating to the
2-27 accounting and financial statement requirements of this subsection
2-28 and the treatment of reinsurance agreements between insurers,
2-29 including minimum risk transfer standards, asset debits or credits,
2-30 reinsurance debits or credits, and reserve debits or credits
2-31 relating to the transfer of all or any part of an insurer's risks
2-32 or liabilities by reinsurance agreements and to any contingencies
2-33 arising from reinsurance agreements. Reinsurance agreements may
2-34 contain a provision allowing the offset of mutual debts and credits
2-35 between the ceding insurer and the assuming insurer whether arising
2-36 out of one or more reinsurance agreements.
2-37 SECTION 5. Section 2, Article 9.47, Insurance Code, is
2-38 amended to read as follows:
2-39 Sec. 2. Regardless of Section 1 of this Article, where
2-40 applicable to title insurance companies, Article 1.01 through 1.25;
2-41 Article 2.01; Article 2.02, Sections 1, 2 and 3; Article 2.03,
2-42 except Section 5; Article 2.04; Article 2.05; Article 2.06; Article
2-43 3.01, Section 10(a), (b) and (c); Article 3.12, except Section (c);
2-44 Article 3.13; <Article 3.14;> Article 21.21; Article 21.21-1;
2-45 Article 21.25; Article 21.26; Article 21.31; Article 21.36; Article
2-46 21.37; Article 21.43; Article 21.46; <and> Article 21.47; Article
2-47 21.49-8; and Subchapter F of Chapter 5 of this code shall apply to
2-48 and govern title insurance companies where applicable thereto. In
2-49 case of conflict between provisions of any of the foregoing
2-50 articles and the provisions of this Chapter Nine, the latter shall
2-51 govern.
2-52 SECTION 6. Section 16.24(b), Insurance Code, is amended to
2-53 read as follows:
2-54 (b) Regardless of the preceding portion of this Article,
2-55 Articles 1.01, 1.02, 1.04, <1.08,> 1.09, 1.09-1, 1.11, 1.12, 1.13,
2-56 1.14, 1.15, 1.15A, 1.16, 1.17, 1.18, 1.19, 1.20, 1.21, 1.22, 1.23,
2-57 1.24, 1.29, 2.08, 2.10, 3.12, 3.13, 6.16, 21.21, 21.25, 21.28,
2-58 21.28-A, <21.28-B,> 21.28-C, 21.39, 21.39-A, and Sections 10(a),
2-59 (b) and (c) of Article 3.01 and Sections 1, 2, 5, 6, 7, 8, 9, 10,
2-60 11, 13, 14 and 17 of Article 1.10 of this code <the Insurance Code
2-61 as they now exist or shall hereafter be amended> shall apply to and
2-62 govern farm mutual insurance companies except where such Articles
2-63 or portions thereof are in conflict with the provisions of Chapter
2-64 16 of the Insurance Code.
2-65 SECTION 7. Section 17.22(a), Insurance Code, is amended to
2-66 read as follows:
2-67 (a) County mutual insurance companies shall be exempt from
2-68 the operation of all insurance laws of this state, except such laws
2-69 as are made applicable by their specific terms or as in this
2-70 Chapter specifically provided. In addition to such other Articles
3-1 as may be made to apply by other Articles of this Code, county
3-2 mutual insurance companies shall be subject to:
3-3 (1) <all the provisions of Article 1.04(e), and of>
3-4 Subdivision 7 of Article 1.10 of this Code;
3-5 (2) Articles <and of Article> 1.15A, <and of Article>
3-6 1.24, <and of Article> 2.04, <and of Article> 2.05, <and of
3-7 Article> 2.08, <and of Article> 2.10, <and of Article> 5.12, <a
3-8 of Article> 5.37, <and of Article> 5.38, <and of Article> 5.39,
3-9 <and of Article> 5.40, <and of Article> 5.49, <and of Article>
3-10 21.21, and <of Article 21.28B and of Article> 21.49 of this
3-11 Code;<,> and
3-12 (3) <the provisions of> Article 7064, <of the> Revised
3-13 <Civil> Statutes <of Texas, 1925>.
3-14 SECTION 8. Section 18.23(b), Insurance Code, is amended to
3-15 read as follows:
3-16 (b) In addition to such Articles as may be made to apply by
3-17 other Articles of this Chapter, underwriters at a Lloyds' shall not
3-18 be exempt from and shall be subject to Articles <all of the
3-19 provisions of Article> 1.15A, <and of Article> 2.20, <and of
3-20 Article> 5.35, <and of Article> 5.38, <and of Article> 5.39, <
3-21 of Article> 5.40, <and of Article> 5.49, <and of Article> 21.21,
3-22 and 21.49-8 of this Code.
3-23 SECTION 9. Section 19.12(b), Insurance Code, is amended to
3-24 read as follows:
3-25 (b) In addition to such Articles as may be made to apply by
3-26 other Articles of this Code, reciprocal or inter-insurance
3-27 exchanges shall not be exempt from and shall be subject to:
3-28 (1) <all of the provisions of> Section 5, <of> Article
3-29 1.10 of this Code; and
3-30 (2) Articles <of Article> 1.15, <and of Article>
3-31 1.15A, <and of Article> 1.16, 2.20, <and of Article> 5.35, <and ofª
3-32 Article 5.36 and of Article> 5.37, <and of Article> 5.38, <and of
3-33 Article> 5.39, <and of Article> 5.40, <and of Article> 6.12, <a
3-34 of Article> 8.07, <and of Article> 21.21, and 21.49-8 of this Code.
3-35 SECTION 10. Section 26(i), Texas Health Maintenance
3-36 Organization Act (Article 20A.26, Vernon's Texas Insurance Code),
3-37 is amended to read as follows:
3-38 (i) Any health maintenance organization authorized under
3-39 this Act shall be subject to:
3-40 (1) Article 21.49-8, Insurance Code; and
3-41 (2) Article 3.51-6, Section 3B, Insurance Code.
3-42 SECTION 11. Article 21.44, Insurance Code, is amended to
3-43 read as follows:
3-44 Art. 21.44. CAPITAL AND SURPLUS REQUIREMENTS FOR FOREIGN OR
3-45 ALIEN INSURANCE COMPANIES OTHER THAN LIFE. (a) No foreign or
3-46 alien insurance company subject to the provisions of Article 21.43
3-47 of this code shall be permitted to do business within this State
3-48 unless it shall have and maintain the minimum requirements of this
3-49 Code as to capital or surplus or both, applicable to companies
3-50 organized under this Code doing the same kind or kinds of business.
3-51 (b) Articles 2.20 and 21.49-8 of this code apply to an
3-52 insurance company subject to this article.
3-53 SECTION 12. Section 4(c), Article 21.49-1, Insurance Code,
3-54 is amended to read as follows:
3-55 (c) Dividends and Other Distributions. (1) No insurer
3-56 subject to registration under Section 3 shall pay any extraordinary
3-57 dividend or make any other extraordinary distribution to its
3-58 shareholders until (i) 30 days after the commissioner has received
3-59 notice of the declaration thereof and has not within such period
3-60 disapproved such payment, or (ii) the commissioner shall have
3-61 approved such payment within such 30-day period.
3-62 (2) For purposes of this section an extraordinary
3-63 dividend or distribution includes any dividend or distribution of
3-64 cash or other property, whose fair market value together with that
3-65 of other dividends or distributions made within the preceding 12
3-66 months exceeds the greater of (i) 10 percent (20 percent if such
3-67 insurer is a title insurer) of such insurer's surplus as regards
3-68 policyholders as of the 31st day of December next preceding, or
3-69 (ii) the net gain from operations of such insurer, if such insurer
3-70 is a life or title insurer, or the net <investment> income, if such
4-1 insurer is not a life or title insurer, for the 12-month period
4-2 ending the 31st day of December next preceding, but shall not
4-3 include pro rata distributions of any class of the insurer's own
4-4 securities.
4-5 (3) Notwithstanding any other provision of law, an
4-6 insurer may declare an extraordinary dividend or distribution which
4-7 is conditional upon the commissioner's approval thereof, and such a
4-8 declaration shall confer no rights upon shareholders until (i) the
4-9 commissioner has approved the payment of such dividend or
4-10 distribution or (ii) the commissioner has not disapproved such
4-11 payment within the 30-day period referred to above.
4-12 SECTION 13. Subchapter E, Chapter 21, Insurance Code, is
4-13 amended by adding Article 21.49-8 to read as follows:
4-14 Art. 21.49-8. DISCLOSURE OF MATERIAL TRANSACTIONS REPORT
4-15 Sec. 1. APPLICATION; EXEMPTION. (a) Except as provided by
4-16 Subsection (b) of this section, this article applies to the
4-17 following domestic insurers and commercially domiciled insurers:
4-18 (1) a capital stock company;
4-19 (2) a mutual company;
4-20 (3) a title insurance company;
4-21 (4) a fraternal benefit society;
4-22 (5) a Lloyd's plan company;
4-23 (6) a reciprocal or interinsurance exchange;
4-24 (7) a group hospital service corporation;
4-25 (8) a health maintenance organization;
4-26 (9) a risk retention group;
4-27 (10) a nonprofit legal service corporation; and
4-28 (11) a nonprofit hospital, medical, or dental service
4-29 corporation.
4-30 (b) A domestic insurer listed under Subsection (a) of this
4-31 section that does business only in this state is exempt from the
4-32 application of this article until the insurer obtains authority to
4-33 conduct the business of insurance in another state.
4-34 Sec. 2. REPORT. (a) Unless the material acquisition and
4-35 disposition of assets and the nonrenewal, cancellation, or
4-36 revisions of material ceded reinsurance agreements have been
4-37 submitted to the commissioner for review, approval, or information
4-38 under other provisions of this code or other laws, regulations, or
4-39 requirements, each insurer shall file a report with the
4-40 commissioner that discloses:
4-41 (1) material acquisitions and dispositions of assets;
4-42 or
4-43 (2) material nonrenewals, cancellations, or revisions
4-44 of ceded reinsurance agreements.
4-45 (b) The report required under Subsection (a) of this section
4-46 must be filed not later than the 15th day after the last day of the
4-47 calendar month in which any of the affected transactions occur.
4-48 (c) The insurer also shall file one complete copy of the
4-49 report, including any necessary exhibits or other attachments, with
4-50 the department.
4-51 (d) A report obtained by or disclosed to the commissioner
4-52 under this article is confidential and is not subject to a
4-53 subpoena, other than a grand jury subpoena. The report may not be
4-54 disclosed by the commissioner, the National Association of
4-55 Insurance Commissioners, or any other person, except to the
4-56 insurance department of another state or another authorized
4-57 governmental agency, without the prior written consent of the
4-58 affected insurer, unless the commissioner, after notice to the
4-59 affected insurer and an opportunity for a hearing, determines that
4-60 the interest of policyholders, shareholders, or the public will be
4-61 served by the publication of the report. If the commissioner does
4-62 so determine, the department may disclose a report to the public
4-63 and may publish all or any part of the report in any manner
4-64 considered appropriate by the commissioner.
4-65 Sec. 3. ACQUISITIONS AND DISPOSITIONS OF ASSETS. (a) An
4-66 insurer is not required to report an acquisition or disposition of
4-67 assets under Section 2 of this article if the acquisition or
4-68 disposition is not material. For purposes of this article, an
4-69 acquisition, or the aggregate of a series of related acquisitions
4-70 during a 30-day period, or a disposition, or the aggregate of a
5-1 series of related dispositions during a 30-day period, is material
5-2 if it:
5-3 (1) is not recurring;
5-4 (2) is not in the ordinary course of business; and
5-5 (3) involves more than five percent of the reporting
5-6 insurer's total admitted assets as reported in its most recent
5-7 statutory statement filed with the department.
5-8 (b) An asset acquisition subject to this article includes
5-9 each purchase, lease, exchange, merger, consolidation, succession,
5-10 or other acquisition, other than the construction or development of
5-11 real property by or for the reporting insurer or the acquisition of
5-12 materials for that purpose.
5-13 (c) An asset disposition subject to this article includes
5-14 each sale, lease, exchange, merger, consolidation, mortgage,
5-15 hypothecation, assignment, whether for the benefit of creditors or
5-16 otherwise, abandonment, destruction, or other disposition.
5-17 (d) The following information must be disclosed in a report
5-18 of a material acquisition or disposition of assets:
5-19 (1) the date of the transaction;
5-20 (2) the manner of acquisition or disposition;
5-21 (3) a description of the assets involved;
5-22 (4) the nature and amount of the consideration given
5-23 or received;
5-24 (5) the purpose of or reason for the transaction;
5-25 (6) the manner by which the amount of consideration
5-26 was determined;
5-27 (7) the gain or loss recognized or realized as a
5-28 result of the transaction; and
5-29 (8) the name of each person from whom the assets were
5-30 acquired or to whom they were disposed.
5-31 (e) An insurer shall report material acquisitions and
5-32 dispositions on a nonconsolidated basis unless the insurer:
5-33 (1) is part of a consolidated group of insurers that
5-34 uses a pooling arrangement or a 100 percent reinsurance agreement
5-35 that affects the solvency and integrity of the insurer's reserves;
5-36 and
5-37 (2) ceded substantially all of its direct and assumed
5-38 business to the pooling arrangement.
5-39 (f) For purposes of Subsection (e), an insurer is considered
5-40 to have ceded substantially all of its direct and assumed business
5-41 to a pooling arrangement if:
5-42 (1) the insurer has, during a calendar year, less than
5-43 $1 million total direct and assumed written premiums that are not
5-44 subject to a pooling arrangement; and
5-45 (2) the net income of the business not subject to the
5-46 pooling arrangement represents less than five percent of the
5-47 insurer's capital and surplus.
5-48 Sec. 4. NONRENEWALS, CANCELLATIONS, OR REVISIONS OF CEDED
5-49 INSURANCE. (a) An insurer is not required to report a nonrenewal,
5-50 cancellation, or revision of a ceded reinsurance agreement under
5-51 Section 2 of this article if the nonrenewal, cancellation, or
5-52 revision is not material. For purposes of this article, a
5-53 nonrenewal, cancellation, or revision is material if it affects, on
5-54 an annual basis, as indicated in the insurer's most recently filed
5-55 statutory statement:
5-56 (1) for property and casualty business, including
5-57 accident and health business when written as property and casualty
5-58 business, more than 50 percent of an insurer's ceded written
5-59 premium; or
5-60 (2) for life, annuity, and accident and health
5-61 business, more than 50 percent of the total reserve credit taken
5-62 for business ceded.
5-63 (b) An insurer is not required to report if the insurer's
5-64 ceded written premium of the total reserve credit taken for
5-65 business ceded represents, on an annual basis, less than:
5-66 (1) 10 percent of direct and assumed written premiums;
5-67 or
5-68 (2) 10 percent of the statutory reserve requirement
5-69 before a cession.
5-70 (c) Subject to the requirements imposed under Subsections
6-1 (a) and (b) of this section, an insurer shall file a report without
6-2 regard to which party initiated the nonrenewal, cancellation, or
6-3 revision of ceded reinsurance when one or more of the following
6-4 conditions exist:
6-5 (1) the entire cession has been canceled, nonrenewed,
6-6 or revised, and ceded indemnity and loss adjustment expense
6-7 reserves after the nonrenewal, cancellation, or revision represent
6-8 less than 50 percent of the comparable reserves that would have
6-9 been ceded had the nonrenewal, cancellation, or revision not
6-10 occurred;
6-11 (2) an authorized or accredited reinsurer has been
6-12 replaced on an existing cession by an unauthorized reinsurer; or
6-13 (3) collateral requirements previously established for
6-14 unauthorized reinsurers have been reduced in that the requirement
6-15 to collateralize incurred but not reported claim reserves has been
6-16 waived for one or more unauthorized reinsurers newly participating
6-17 in an existing cession.
6-18 (d) Subject to the requirement of materiality, for purposes
6-19 of Subsections (c)(2) and (3) of this section, an insurer shall
6-20 file a report if the result of the revision affects more than 10
6-21 percent of the cession.
6-22 (e) An insurer shall disclose the following information in a
6-23 report of a material nonrenewal, cancellation, or revision of a
6-24 ceded reinsurance agreement:
6-25 (1) the effective date of the nonrenewal,
6-26 cancellation, or revision;
6-27 (2) a description of the transaction that identifies
6-28 the initiator of the transaction;
6-29 (3) the purpose of or reason for the transaction; and
6-30 (4) if applicable, the identity of the replacement
6-31 reinsurers.
6-32 (f) An insurer shall report all material nonrenewals,
6-33 cancellations, or revisions of ceded reinsurance agreements on a
6-34 nonconsolidated basis unless the insurer:
6-35 (1) is part of a consolidated group of insurers that
6-36 uses a pooling arrangement or 100 percent reinsurance agreement
6-37 that affects the solvency and integrity of the insurer's reserves;
6-38 and
6-39 (2) ceded substantially all of its direct and assumed
6-40 business to the pooling arrangement.
6-41 (g) For purposes of Subsection (f) of this section, an
6-42 insurer is considered to have ceded substantially all of its direct
6-43 and assumed business to a pooling arrangement if:
6-44 (1) the insurer has, during a calendar year, less than
6-45 $1 million total direct and assumed written premiums that are not
6-46 subject to the pooling arrangement; and
6-47 (2) the net income of the business not subject to the
6-48 pooling arrangement represents less than five percent of the
6-49 insurer's capital and surplus.
6-50 SECTION 14. Subchapter E, Chapter 21, Insurance Code, is
6-51 amended by adding Article 21.72 to read as follows:
6-52 Art. 21.72. GENERAL REINSURANCE REQUIREMENTS
6-53 Sec. 1. (a) An insurance company incorporated under the laws
6-54 of another state or the United States and authorized to do business
6-55 in this state may not expose itself to any loss or hazard on any
6-56 one risk in an amount that exceeds 10 percent of the company's
6-57 surplus as regards policyholders unless the excess is reinsured by
6-58 the company in another solvent insurer.
6-59 (b) An insurance company incorporated under a jurisdiction
6-60 other than that of this state, another state, or the United States
6-61 and authorized to do business in this state may not expose itself
6-62 to any loss or hazard on any one risk in an amount that exceeds 10
6-63 percent of the company's deposit with the statutory officer in the
6-64 state through which the company gains admission to the United
6-65 States, together with 10 percent of the other surplus to
6-66 policyholders of the company's United States branch, unless the
6-67 excess is reinsured by the company in another solvent insurer.
6-68 Sec. 2. An insurance or reinsurance company authorized to
6-69 transact insurance or reinsurance in this state may reinsure the
6-70 whole or any part of an individual risk in another solvent insurer.
7-1 Sec. 3. This article does not apply to:
7-2 (1) life insurance;
7-3 (2) health insurance;
7-4 (3) annuity contracts;
7-5 (4) title insurance;
7-6 (5) workers' compensation insurance;
7-7 (6) employers' liability insurance coverage; or
7-8 (7) any policy or type of coverage as to which the
7-9 maximum possible loss to the insurer is not readily ascertainable
7-10 on issuance of the policy.
7-11 Sec. 4. Any reinsurance required or permitted by this
7-12 article must comply with Article 5.75-1 of this code.
7-13 SECTION 15. Section 1, Article 22.18, Insurance Code, is
7-14 amended to read as follows:
7-15 Sec. 1. The following Articles of this Code<, to
7-16 wit>: Article 1.14, Article 1.15, Article 1.15A, Article 1.16,
7-17 Article 1.19, Article 1.24, Article 1.32, Article 3.10, Article
7-18 3.13, Article 3.39, Article 3.40, Article 3.61, <Article 3.62,>
7-19 Article 3.63, Article 3.67, Article 21.07-7, Article 21.21, Article
7-20 21.25, Article 21.26, Article 21.28, Article 21.32, Article 21.39,
7-21 Article 21.45, and Article 21.47, shall apply to and govern
7-22 stipulated premium companies and each company shall comply with the
7-23 provisions thereof.
7-24 SECTION 16. Section 23.26(b), Insurance Code, is amended to
7-25 read as follows:
7-26 (b) The following provisions of the Insurance Code as they
7-27 now exist or shall hereafter be amended shall, where not in
7-28 conflict with this chapter, apply to corporations complying with
7-29 the provisions of this chapter to the same extent as they apply to
7-30 insurers and to those doing the business of insurance: Articles
7-31 1.01, 1.02, 1.04, <1.08,> 1.09, 1.09-1, 1.11, 1.12, 1.13, 1.14,
7-32 1.15, 1.15A, 1.16, 1.17, 1.18, 1.19, 1.20, 1.21, 1.22, 1.23, 1.24,
7-33 1.25, 1.29, 3.12, 3.13, <3.14,> 21.21, 21.21-2, 21.25, 21.28,
7-34 21.28-A, <21.28A, and> 21.47, 21.49-8 and Sections 1, 2, 6, 8, 9,
7-35 10, 11, 12, 13, 14, and 17 of Article 1.10 of this code <the
7-36 Insurance Code, as amended>.
7-37 SECTION 17. Article 25.05, Insurance Code, is amended to
7-38 read as follows:
7-39 Art. 25.05. Other Laws to Govern. Chapter <Chapters> 2,
7-40 including Article 2.20, Chapter <and> 8, and Article 4.10 of this
7-41 code, and all other provisions of the Insurance Code, if not in
7-42 conflict with this chapter, shall apply to and govern any insurance
7-43 carrier operating under this chapter. In addition, Article 21.49-8
7-44 of this code applies to each insurance carrier operating under this
7-45 chapter.
7-46 SECTION 18. (a) This Act takes effect September 1, 1995.
7-47 (b) The commissioner of insurance shall adopt rules as
7-48 required by the Insurance Code, as amended by this Act, not later
7-49 than December 31, 1995.
7-50 SECTION 19. The importance of this legislation and the
7-51 crowded condition of the calendars in both houses create an
7-52 emergency and an imperative public necessity that the
7-53 constitutional rule requiring bills to be read on three several
7-54 days in each house be suspended, and this rule is hereby suspended.
7-55 * * * * *