SRC-AAA H.B. 1975 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1975
By: Smithee (Sibley)
Economic Development
4-23-97
Engrossed


DIGEST 

Currently, the Insurance Code contains several statutes that 
authorize and mandate financial 
examinations of various insurance carriers.  The frequency of 
these examinations varies significantly 
and may result in extra expenses for insurance carriers and 
inefficiencies for the Department of 
Insurance (department) in scheduling the examinations.  This bill 
requires all carriers to undergo an 
examination every three years unless the commissioner of 
insurance determines that the financial 
strength of the carrier justifies less-frequent examinations 
every five years.  Additionally, this bill 
would subject all carriers to the same requirements in paying the 
department for examinations.

PURPOSE

As proposed, H.B. 1975 requires all insurance carriers to undergo 
an examination every three years 
unless the commissioner of insurance determines that the 
financial strength of the carrier justifies 
less-frequent examinations every five years.  Additionally, this 
bill would subject all carriers to the 
same requirements in paying the Department of Insurance for 
examinations.


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 9.22, Insurance Code, to require every 
title insurance company, 
domestic or foreign,  to file a verified statement with the 
commissioner of insurance (commissioner), 
rather than the Board of Insurance Commissioners  (board). 
Deletes existing text regarding the duties 
of the board.  Provides that each title insurance company is 
subject to Articles 1.15 and 1.16 of this 
code. Makes conforming changes. 

SECTION 2. Amends Article 10.33, Insurance Code, to delete 
existing text regarding appointments 
of the board.   

SECTION 3. Amends Article 10.35, Insurance Code, to delete 
existing text regarding actual 
expenses of examiners.  Provides that each foreign society is 
subject to Articles 1.15 and 1.16 of this 
code. Makes conforming changes. 

SECTION 4. Amends Article 13.09, Insurance Code, as follows:

Art. 13.09. New heading: EXCEPTIONS AND EXEMPTIONS; 
EXAMINATIONS. 
Provides that Articles 1.15 and 1.16 of this code apply to 
corporations and associations 
regulated under this chapter.

SECTION 5. Amends Article 14.16, Insurance Code, to delete 
existing Article 14.16.  Makes 
conforming changes. 

SECTION 6. Amends Article 17.22(a), Insurance Code, to delete 
existing Subdivision (3).  Makes 
conforming changes.

SECTION 7. Amends Article 20.21, Insurance Code, as follows: 

Art. 20.21. New heading: BOOKS AND RECORDS; EXAMINATION. 
Deletes existing text 
regarding showing all funds collected.  Makes a conforming 
change. 

SECTION 8. Amends Section 5B(a), Article 21.49, Insurance Code, to 
delete existing Subsection 
(a). Makes a conforming change. 

SECTION 9. Amends Section 10, Article 21.49-3, Insurance Code, to 
delete text regarding 
examinations. Makes a conforming change.  

SECTION 10. Repealers: Article 17.18, Insurance Code (Biennial 
examination) and Section 5B(c), 
Article 21.49, Insurance Code (Catastrophe Property Insurance 
Pool Act).

SECTION 11. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 12. Emergency clause.