SRC-SLL, AAA H.B. 976 75(R)BILL ANALYSIS


Senate Research CenterH.B. 976
By: Brimer (Armbrister)
Economic Development
5-9-97
Committee Report (Amended)


DIGEST 

In 1989, Senate Bill 1 changed the Texas Workers' Compensation Assigned
Risk Pool to the Texas Workers' Compensation Insurance Facility
(facility).  In 1991, House Bill 62 mandated that the facility should
cease writing new policies on or after January 1, 1994 and cease being the
insurer of last resort, and required that its claim assets and liabilities
be transferred to the Texas Workers' Compensation Insurance Fund no later
than January 1, 1999.  H.B. 976 transfers control of all of the assets,
liabilities and obligations of the facility to the Texas Property and
Casualty Insurance Guaranty Association. It also provides for the
privatization of facility's account should  the association, with approval
of the Commissioner of Insurance, determine that privatization is in the
best interest of the State of Texas.

PURPOSE

As proposed, H.B. 976 transfers control of all of  the assets, liabilities
and obligations of the Texas Workers' Compensation Facility (facility) to
the Texas Property and Casualty Insurance Guaranty Association. It also
provides for the privatization of facility's account should  the
association, with approval of the commissioner of insurance, determine
that privatization is in the best interest of the State of Texas.

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 Article 21.28-C, Insurance Code, by adding Section 26,
as follows: 

Sec. 26. TRANSFER OF FACILITY TO ASSOCIATION.  Sets forth the purpose of
this section.  Defines "comptroller," "facility," "fund," "insurer," and
"Texas workers' compensation insurance facility account."  Requires the
Texas Property and Casualty Insurance Guaranty Association (association)
to take control of the Texas workers' compensation facility's (facility)
assets, liabilities, and obligations and administer the remaining aspect
of the facility's operations. Sets forth duties of the association in
controlling the facility.  Requires the association to report on its
operating results regarding the facility. Sets forth requirements for
operating the facility's account for claims before and after January 1,
1992.  Sets forth requirements of assessments levied on a member insurer.
Authorizes the association to invest in certain investments.  Requires the
association to submit a plan to ensure certain actions are taken with
regard to the facility's account. Sets forth procedures for the approval
or disapproval of the plan.  Provides that the association succeeds in all
rights, defenses, immunities and liabilities of the facility.  Sets forth
requirements for a party instituting an action against the facility.
Authorizes the association to enter into negotiations for the
privatization to a single insurer of all assets, liabilities and
obligations maintained in the facility's account.  Sets forth requirements
for the privatization of the facility's account. Provides that this
section controls if a conflict arises. 

SECTION 2. Repealers: Article 5.76-2, Insurance Code; and Section
18.24(b), Chapter 12, Acts of the 72nd Legislature, 2nd Called Session,
1991, as amended by Section 8, Chapter 885, Acts of the 73rd Legislature,
Regular Session, 1993. 
 
SECTION 3. Severability clause.

SECTION 4. Makes application of  the repeal of Article 5.76-2, Insurance
Code, prospective. 

SECTION 5. Emergency clause.
  Effective date: upon passage.

SUMMARY OF COMMITTEE CHANGES

Amendment 1.

On page 4, line 21, strike Subsection (l) and insert the following:

(l) The association may invest Texas workers' compensation insurance
facility account funds in the types of investments authorized by law for
an insurer authorized to write workers' compensation insurance coverage in
this state.  The association shall develop an investment policy for the
Texas workers' compensation insurance facility account and shall submit
that policy to the comptroller for review and approval.