1-1 By: Driver, Counts (Senate Sponsor - Duncan) H.B. No. 922
1-2 (In the Senate - Received from the House April 21, 1997;
1-3 April 22, 1997, read first time and referred to Committee on
1-4 Economic Development; April 29, 1997, reported favorably by the
1-5 following vote: Yeas 9, Nays 0; April 29, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the board of directors of the Life, Accident, Health,
1-9 and Hospital Service Insurance Guaranty Association.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Sections 7(a) and (d), Article 21.28-D, Insurance
1-12 Code, are amended to read as follows:
1-13 (a) The commissioner [State Board of Insurance] shall
1-14 appoint a board of directors of the association consisting of nine
1-15 members, three of whom shall be chosen from employees or officers
1-16 chosen from the 50 [ten] member companies having the largest total
1-17 direct premium income based on the latest financial statement on
1-18 file at date of appointment, two of whom shall be chosen from the
1-19 other companies to give fair representation to member insurers
1-20 based on due consideration of their varying categories of premium
1-21 income and geographical location, and four of whom shall be
1-22 representatives of the general public. Members serve for six-year
1-23 staggered terms, with the terms of three members expiring each
1-24 odd-numbered year. All directors shall serve until their
1-25 successors are appointed, except that in the case of any vacancy,
1-26 the unexpired term of office shall be filled by the appointment of
1-27 a director by the commissioner [State Board of Insurance]. If a
1-28 director ceases to be an officer or employee of a member insurer
1-29 during the director's term of office, that office becomes vacant
1-30 until the director's successor is appointed. All directors are
1-31 eligible to succeed themselves in office. A public representative
1-32 may not be:
1-33 (1) an officer, director, or employee of an insurance
1-34 company, insurance agency, agent, broker, solicitor, adjuster, or
1-35 any other business entity regulated by the department [State Board
1-36 of Insurance];
1-37 (2) a person required to register with the secretary
1-38 of state under Chapter 305, Government Code; or
1-39 (3) related to a person described by Subparagraph (1)
1-40 or (2) of this paragraph within the second degree of affinity or
1-41 consanguinity.
1-42 (d) A director of the association [or any member company or
1-43 other entity represented by the director] may not receive any money
1-44 or valuable thing directly, indirectly, or through any substantial
1-45 interest in any other corporation, firm, or business unit for
1-46 negotiating, procuring, participating, recommending, or aiding in a
1-47 transaction, reinsurance agreement, merger, purchase, sale,
1-48 contribution, or exchange of assets, policies of insurance, or
1-49 property made by the association or the supervisor, conservator, or
1-50 receiver on behalf of an impaired insurer. A [The] director of the
1-51 association [, company, or entity] may not have a pecuniary
1-52 interest [be pecuniarily or contractually interested], as
1-53 principal, co-principal, agent, or beneficiary, directly,
1-54 indirectly, or through any substantial interest in any other
1-55 corporation, firm, or business unit, in the transaction,
1-56 reinsurance agreement, merger, purchase, sale, contribution, or
1-57 exchange.
1-58 SECTION 2. This Act takes effect September 1, 1997.
1-59 SECTION 3. The importance of this legislation and the
1-60 crowded condition of the calendars in both houses create an
1-61 emergency and an imperative public necessity that the
1-62 constitutional rule requiring bills to be read on three several
1-63 days in each house be suspended, and this rule is hereby suspended.
1-64 * * * * *