1-1 By: Sibley S.B. No. 1667
1-2 (In the Senate - Filed April 20, 1995; April 20, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 28, 1995, reported favorably by the following vote: Yeas 8,
1-5 Nays 0; April 28, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the liquidation of insolvent insurers, the statutory
1-9 capacity of the Commissioner of Insurance as receiver, and the
1-10 insurance guaranty associations.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Subsection (g), Section 2, Article 21.28,
1-13 Insurance Code, is amended to read as follows:
1-14 (g) Disposal of Property; Settling Claims. The receiver
1-15 may, subject to the approval of the court, (1) sell or otherwise
1-16 dispose of the real and personal property, or any part thereof, of
1-17 an insurer against whom a proceeding has been brought under this
1-18 Article, and (2) sell or compound all doubtful or uncollectible
1-19 debts, or claims owed by or owing to such insurer, including claims
1-20 based upon an assessment levied against a member of a mutual
1-21 insurer, reciprocal exchange, or an underwriter at Lloyds.
1-22 Whenever the amount of any such debt or claim owed by or owing to
1-23 such insurer or the value of any item of property of the insurer
1-24 does not exceed Ten Thousand Dollars ($10,000) <One Thousand
1-25 Dollars ($1,000)>, exclusive of interest, the receiver may
1-26 compromise or compound such debt or claim or sell such property
1-27 upon such terms as he may deem for the best interests of said
1-28 insurer without obtaining the approval of the court. The receiver
1-29 may, subject to the approval of the court, sell or agree to sell,
1-30 or offer to sell, any assets of such an insurer to such of its
1-31 creditors who may desire to participate in the purchase thereof, to
1-32 be paid for, in all or in part, out of dividends payable to such
1-33 creditors, and, upon the application of the receiver, the court may
1-34 designate representatives to act for such creditors in the
1-35 purchase, holding and/or management of such assets, and the
1-36 receiver may, subject to the approval of the court, advance the
1-37 expenses of such representatives against the security of the claims
1-38 of such creditors. The receiver may, subject to the approval of
1-39 the court and the commissioner <State Board of Insurance>, as
1-40 required by this code, sell or otherwise dispose of the charter or
1-41 license of the insurer separate and apart from its outstanding
1-42 liabilities.
1-43 SECTION 2. Section 2, Article 21.28, Insurance Code, is
1-44 amended by adding Subsection (j) to read as follows:
1-45 (j) Immunity; Attorney General Representation. (1) There
1-46 is no liability on the part of, and no cause of action of any
1-47 nature arises against, the receiver or its agents or employees, a
1-48 special deputy receiver or its agents or employees, or the
1-49 commissioner or the commissioner's agents or employees for any good
1-50 faith action or failure to act in the performance of powers and
1-51 duties under this Article.
1-52 (2) The attorney general shall defend any action to
1-53 which Subdivision (1) of this subsection applies that is brought
1-54 against the receiver or its agents or employees, a special deputy
1-55 receiver or its agents or employees, or the commissioner or the
1-56 commissioner's agents or employees. This subsection continues to
1-57 apply to an action instituted after the defendant's service with
1-58 the receiver, a special deputy receiver, the commissioner, or the
1-59 department has terminated or after the close of the receivership
1-60 out of which the action arises. This subsection does not require
1-61 the attorney general to defend any person or entity with respect to
1-62 an issue other than the applicability or effect of the judicial
1-63 immunity created by Subdivision (1) of this subsection.
1-64 SECTION 3. The importance of this legislation and the
1-65 crowded condition of the calendars in both houses create an
1-66 emergency and an imperative public necessity that the
1-67 constitutional rule requiring bills to be read on three several
1-68 days in each house be suspended, and this rule is hereby suspended,
2-1 and that this Act take effect and be in force from and after its
2-2 passage, and it is so enacted.
2-3 * * * * *