SRC-JFA H.B. 922 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 922
By: Driver (Duncan)
Economic Development
4-23-97
Engrossed


DIGEST 

Currently, three directors of the Life, Accident, Health and Hospital
Service Insurance Guaranty Association board are chosen from 10 member
companies having the largest total direct premium income.  Broadening the
number of member companies from which these directors are chosen would
enable the association to recruit and maintain the most qualified
directors.  This bill would increase from 10 to 50 the number of member
companies from which three members are chosen. Additionally, this bill
would prohibit a director from having pecuniary interest in a contribution
before the association.   

PURPOSE

As proposed, H.B. 922 increases the number of member companies from which
three of the directors of the Life, Accident, Health and Hospital
Insurance Guaranty Association are chosen from 10 to 50. This bill
prohibits a director from having pecuniary interest in a contribution
before the association.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Sections 7(a) and (d), Article 21.28-D, Insurance Code,
to require the commissioner of insurance, rather than the State Board of
Insurance, to appoint a board of directors of the Life, Accident, Health
and Hospital Insurance Guaranty Association (association) consisting of
nine members, three of whom shall be chosen from employees or officers
chosen from the 50, rather than 10, member companies having the largest
total direct premium income based on the latest financial statement on
file at date of appointment.  Prohibits a public representative from
being, among other items, an officer, director, or employee of an
insurance company, insurance agency, agent, broker, solicitor, adjuster,
or any other business entity regulated by the Department of Insurance,
rather than the State Board of Insurance.  Prohibits a director of the
association from receiving any money or valuable thing directly,
indirectly, or through any substantial interest in any other corporation,
firm, or business unit for, among other actions, contribution of assets,
policies of insurance, or property made by the association or the
supervisor, conservator, or receiver on behalf of an impaired insurer.
Deletes text in Subsection (d) relating to any member company or other
entity represented by the director.  Prohibits a director of the
association from having a pecuniary interest, rather than from being
pecuniarily or contractually interested in, as principal, co-principal,
agent, or beneficiary, directly, indirectly, or through substantial
interest in any other corporation, firm, or business unit, in, among other
items, the contribution.  Makes conforming changes.   

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.