By Driver, Counts H.B. No. 922
75R4586 SAW-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the board of directors of the Life, Accident, Health,
1-3 and Hospital Service Insurance Guaranty Association.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 7(a) and (d), Article 21.28-D, Insurance
1-6 Code, are amended to read as follows:
1-7 (a) The commissioner [State Board of Insurance] shall
1-8 appoint a board of directors of the association consisting of nine
1-9 members, three of whom shall be chosen from employees or officers
1-10 chosen from the 50 [ten] member companies having the largest total
1-11 direct premium income based on the latest financial statement on
1-12 file at date of appointment, two of whom shall be chosen from the
1-13 other companies to give fair representation to member insurers
1-14 based on due consideration of their varying categories of premium
1-15 income and geographical location, and four of whom shall be
1-16 representatives of the general public. Members serve for six-year
1-17 staggered terms, with the terms of three members expiring each
1-18 odd-numbered year. All directors shall serve until their
1-19 successors are appointed, except that in the case of any vacancy,
1-20 the unexpired term of office shall be filled by the appointment of
1-21 a director by the commissioner [State Board of Insurance]. If a
1-22 director ceases to be an officer or employee of a member insurer
1-23 during the director's term of office, that office becomes vacant
1-24 until the director's successor is appointed. All directors are
2-1 eligible to succeed themselves in office. A public representative
2-2 may not be:
2-3 (1) an officer, director, or employee of an insurance
2-4 company, insurance agency, agent, broker, solicitor, adjuster, or
2-5 any other business entity regulated by the department [State Board
2-6 of Insurance];
2-7 (2) a person required to register with the secretary
2-8 of state under Chapter 305, Government Code; or
2-9 (3) related to a person described by Subparagraph (1)
2-10 or (2) of this paragraph within the second degree of affinity or
2-11 consanguinity.
2-12 (d) A director of the association [or any member company or
2-13 other entity represented by the director] may not receive any money
2-14 or valuable thing directly, indirectly, or through any substantial
2-15 interest in any other corporation, firm, or business unit for
2-16 negotiating, procuring, participating, recommending, or aiding in a
2-17 transaction, reinsurance agreement, merger, purchase, sale,
2-18 contribution, or exchange of assets, policies of insurance, or
2-19 property made by the association or the supervisor, conservator, or
2-20 receiver on behalf of an impaired insurer. A [The] director of the
2-21 association [, company, or entity] may not have a pecuniary
2-22 interest [be pecuniarily or contractually interested], as
2-23 principal, co-principal, agent, or beneficiary, directly,
2-24 indirectly, or through any substantial interest in any other
2-25 corporation, firm, or business unit, in the transaction,
2-26 reinsurance agreement, merger, purchase, sale, contribution, or
2-27 exchange.
3-1 SECTION 2. This Act takes effect September 1, 1997.
3-2 SECTION 3. The importance of this legislation and the
3-3 crowded condition of the calendars in both houses create an
3-4 emergency and an imperative public necessity that the
3-5 constitutional rule requiring bills to be read on three several
3-6 days in each house be suspended, and this rule is hereby suspended.