RS H.B. 922 75(R)    BILL ANALYSIS


INSURANCE
H.B. 922
By: Driver
4-7-97
Committee Report (Unamended)



BACKGROUND 
Article 21.28-D, Insurance Code, the Life, Accident, Health and Hospital
Service Insurance Guaranty Association Act creates an association of
insurers to pay benefits and continue coverage as limited by the act for
member insurers who become impaired or insolvent. The members of the
association are subject to assessment to provide funds to carry out the
purposes of the act.  The  Department of Insurance appoints a nine-member
board of directors, three of whom must be chosen from the ten largest
member companies.   Neither a director of the association or the
director's company or other entity can have a pecuniary interest in any of
the transactions of the association.  

PURPOSE
If enacted into law, HB 922 would broaden the pool of potential
association directors by allowing the commissioner of the Department of
Insurance to choose three directors from among the 50 largest member
companies, rather than the 10 largest.  It would also allow a person to
serve as director of the association, so long as the director does not
have a pecuniary interest in the transactions of the association. 

RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS
SECTION 1. - Amends sections 7(a) and (d), Article 21.28-D, Insurance
Code, as follows: 

(a) Amends title to change from State Board of Insurance to Commissioner.
The article increases the number of insurance companies for the
commissioner to select three of the members of the board of directors for
the Life, Accident, Health, and Hospital Service Insurance Guaranty
Association from ten to the fifty largest companies.  Further updates the
language to reflect change for insurance companies being regulated by the
State Board of Insurance to TDI. 

(d) Amended to provide that a director of the association may not receive
any money or valuable thing for, or have a pecuniary interest in a firm,
company or business unit, in a transaction, reinsurance agreement, merger,
purchase, sale, contribution, or exchange involving the association. 

SECTION 2. - Effective Date - September 1, 1997.

SECTION 3. - Emergency Clause.