SRC-AAA H.B. 1977 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1977
By: Smithee (Sibley)
Economic Development
5-5-97
Engrossed


DIGEST 

Currently, the Insurance Code prohibits a property and casualty company
from exposing itself to loss on any one risk in an amount that would
exceed 10 percent of the company's surplus.  However, a company
incorporated under Texas law and authorized to do business in Texas is not
subject to the risk limitation requirement.  This bill would subject
property and casualty companies incorporated under Texas law and
authorized to do business in Texas to the 10 percent risk limitation. 

PURPOSE

As proposed, H.B. 1977 subjects property and casualty companies
incorporated under Texas law and authorized to do business in Texas to the
10 percent risk limitation. 

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 Section 1(a), Article 21.72, Insurance Code, to prohibit
an insurance company incorporated under the laws of this state  from
exposing itself to any loss or hazard on any one risk in an amount that
exceeds 10 percent of the company's surplus. 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.