By: Ellis S.B. No. 1556
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the establishment of a property and casualty market
1-2 assistance program by the Commissioner of Insurance.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Article 21.49-12, Insurance Code, is amended to
1-5 read as follows:
1-6 Sec. 1. CREATION OF PROGRAM <PROGRAMS>. The Commissioner
1-7 <State Board> of Insurance may establish a voluntary mechanism to
1-8 be called a market assistance program to assist insureds in Texas
1-9 in obtaining property and casualty <liability> insurance coverage
1-10 where such coverage <it> has been shown not to be readily
1-11 available. The types of risks to be assisted under the <each>
1-12 market assistance program will be established by the Commissioner
1-13 <board>.
1-14 Sec. 2. Plan of operation. The <Each> market assistance
1-15 program shall be administered under a plan of operation promulgated
1-16 by the Commissioner <board>. The <Each> plan shall indicate types
1-17 of coverage, policy forms and terms, application forms,
1-18 eligibility, and overall operation of the program. Any <The board
1-19 may require an> insurer transacting the business of property or
1-20 casualty insurance in this state is required to participate in the
1-21 market assistance program.<,> The Commissioner <but the board>
1-22 shall <may> not permit any <an> insurer to condition its
1-23 participation in a manner that is inequitable to the participants.
2-1 Sec. 3. Executive committee. (a) An executive committee
2-2 shall administer the <each> market assistance program.
2-3 (b) The Commissioner <board> shall appoint the members of
2-4 the <an> executive committee.
2-5 (c) The executive committee shall be composed of the
2-6 following members:
2-7 (1) five representatives of the general public;
2-8 (2) two licensed property and casualty local recording
2-9 agents;
2-10 (3) one representative of a property or casualty
2-11 residual market mechanism;
2-12 (4) five representatives of insurers transacting the
2-13 business of property or casualty insurance in this state; and
2-14 (5) the Commissioner or the Commissioner's designated
2-15 representative from within the Department of Insurance. <At least
2-16 one member of the board must be designated a member of the
2-17 executive committee.>
2-18 (d) The plan of operation may provide for subcommittees that
2-19 are necessary to carry out the functions of the <a> program.
2-20 (e) The Commissioner or the Commissioner's designated <A>
2-21 representative <of the board> must be present in every meeting of
2-22 an executive committee or subcommittee.
2-23 Sec. 4. Agents. (a) Notwithstanding any other provision of
2-24 law, the <a> market assistance program may have two categories of
2-25 agents:
3-1 (1) an originating agent; and
3-2 (2) an issuing agent.
3-3 (b) An originating agent may complete an application for
3-4 insurance on behalf of an insured for submission to the program
3-5 without being appointed to represent the ultimate insurer.
3-6 (c) An issuing agent must be appointed to represent the
3-7 ultimate insurer and shall perform all of the customary duties of a
3-8 local recording agent including but not limited to the following:
3-9 (1) signing, executing, and delivering policies of
3-10 insurance;
3-11 (2) maintaining a record of the business;
3-12 (3) examining and inspecting the risk; and
3-13 (4) receiving and collecting premiums.
3-14 (d) An originating agent may share commissions, as
3-15 negotiated on an individual basis, with the issuing agent if the
3-16 originating agent holds a license as either a local recording agent
3-17 or as a salaried representative for those companies whose plan of
3-18 operation does not contemplate the use of local recording agents.
3-19 (e) The originating and issuing agent may be the same
3-20 person. If the originating agent and the issuing agent are not the
3-21 same person, the originating agent may not be held to be the agent
3-22 of the insurer unless there is an appointment as specified by
3-23 Article 21.14 of this code.
3-24 (f) The program may not share in commissions.
3-25 Sec. 5. Fees. The plan of operation may provide reasonable
4-1 application fees to be used to cover expenses of the program.
4-2 These fees must be maintained in a separate account under the
4-3 control of a fiscal agent designated in the plan of operation.
4-4 Sec. 6. Confidentiality. (a) The Commissioner and the
4-5 Department <State Board> of Insurance shall maintain as
4-6 confidential all application files and related documents received
4-7 under this article.
4-8 (b) In maintaining confidentiality, the Commissioner and the
4-9 Department <State Board> of Insurance shall not permit the files
4-10 and related documents to be made available to the public except
4-11 that the Commissioner and the Department <State Board> of Insurance
4-12 shall allow access to those files and related documents to
4-13 originating or issuing agents or to an applicant for his own file
4-14 or to an insurer who agrees to insure the applicant.
4-15 SECTION 2. This Act takes effect September 1, 1995.
4-16 SECTION 3. 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.