By:  Sibley                                           S.B. No. 1667
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the liquidation of insolvent insurers, the statutory
    1-2  capacity of the Commissioner of Insurance as receiver, and the
    1-3  insurance guaranty associations.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Subsection (g), Section 2, Article 21.28,
    1-6  Insurance Code, is amended to read as follows:
    1-7        (g)  Disposal of Property; Settling Claims.  The receiver
    1-8  may, subject to the approval of the court, (1) sell or otherwise
    1-9  dispose of the real and personal property, or any part thereof, of
   1-10  an insurer against whom a proceeding has been brought under this
   1-11  Article, and (2) sell or compound all doubtful or uncollectible
   1-12  debts, or claims owed by or owing to such insurer, including claims
   1-13  based upon an assessment levied against a member of a mutual
   1-14  insurer, reciprocal exchange, or an underwriter at Lloyds.
   1-15  Whenever the amount of any such debt or claim owed by or owing to
   1-16  such insurer or the value of any item of property of the insurer
   1-17  does not exceed Ten Thousand Dollars ($10,000) <One Thousand
   1-18  Dollars ($1,000)>, exclusive of interest, the receiver may
   1-19  compromise or compound such debt or claim or sell such property
   1-20  upon such terms as he may deem for the best interest of said
   1-21  insurer without obtaining the approval of the court.  The receiver
   1-22  may, subject to the approval of the court, sell or agree to sell,
   1-23  or offer to sell, any assets of such an insurer to such of its
    2-1  creditors who may desire to participate in the purchase thereof, to
    2-2  be paid for, in all or in part, out of dividends payable to such
    2-3  creditors, and, upon the application of the receiver, the court may
    2-4  designate representatives to act for such creditors in the
    2-5  purchase, holding and/or management of such assets, and the
    2-6  receiver may, subject to the approval of the court, advance the
    2-7  expenses of such representatives against the security of the claims
    2-8  of such creditors.  The receiver may, subject to the approval of
    2-9  the court and the Commissioner <State Board of Insurance>, as
   2-10  required by this code, sell or otherwise dispose of the charter or
   2-11  license of the insurer separate and apart from its outstanding
   2-12  liabilities.
   2-13        SECTION 2.  Section 2, Article 21.28, Insurance Code, is
   2-14  amended by adding Subsection (j) to read as follows:
   2-15        (j)  Immunity; Attorney General Representation.  (1)  There
   2-16  is no liability on the part of, and no cause of action of any
   2-17  nature arises against, the receiver or its agents or employees,
   2-18  special deputy receiver or its agents or employees, or the
   2-19  commissioner or the commissioner's agents or employees for any good
   2-20  faith action or failure to act in the performance of powers and
   2-21  duties under this Article.
   2-22              (2)  The attorney general shall defend any action to
   2-23  which Subdivision (1) of this subsection applies that is brought
   2-24  against the receiver or its agents or employees, a special deputy
   2-25  receiver or its agents or employees, or the commissioner or the
    3-1  commissioner's agents or employees.  This subsection continues to
    3-2  apply to an action instituted after the defendant's service with
    3-3  the receiver, a special deputy receiver, the commissioner, or the
    3-4  department has terminated or after the close of the receivership
    3-5  out of which the action arises.  This subsection does not require
    3-6  the attorney general to defend any person or entity with respect to
    3-7  an issue other than the applicability or effect of the judicial
    3-8  immunity created by Subdivision (1) of this subsection.
    3-9        SECTION 3.  The importance of this legislation and the
   3-10  crowded condition of the calendars in both houses create an
   3-11  emergency and an imperative public necessity that the
   3-12  constitutional rule requiring bills to be read on three several
   3-13  days in each house be suspended, and this rule is hereby suspended,
   3-14  and that this Act take effect and be in force from and after its
   3-15  passage, and it is so enacted.