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


Senate Research CenterC.S.H.B. 1975
By: Smithee (Sibley)
Economic Development
4-25-97
Committee Report (Substituted)


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, C.S.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), Section 5B(c), Article 21.49, Insurance Code (Catastrophe
Property Insurance Pool Act), and Article 5.73, Section 5, Insurance Code
(Advisory organization). 

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

SECTION 12. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 10.

Amends SECTION 10 to repeal Article 5.73, Section 5, Insurance Code
(Advisory organization).