By Counts                                       H.B. No. 1584

      75R4889 SAW-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to insurance company loss or claim reserves.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Article 21.39, Insurance Code, is amended to read

 1-5     as follows:

 1-6           Art. 21.39.  LOSS OR CLAIM RESERVES.  (a)  Every insurer

 1-7     shall maintain reserves in an amount estimated in the aggregate to

 1-8     provide for the payment of all the insurer's losses or claims

 1-9     incurred on or prior to the date of statement, whether reported or

1-10     unreported, that [which] are unpaid as of that [such] date [and for

1-11     which such insurer may be liable], and also reserves in an amount

1-12     estimated to provide for the expenses of adjustment or settlement

1-13     of the unpaid [such] claims.

1-14           (b)  The commissioner [Board of Insurance Commissioners]

1-15     shall adopt reserves standards in accordance with  this code and

1-16     actuarial standards of practice published by the American Academy

1-17     of Actuaries.  The standards adopted by the commissioner shall take

1-18     into account the date, established in a policy or contract or by

1-19     company practice, on which unpaid claims are incurred.

1-20           (c)  All [each current formula for establishing reserves

1-21     applicable to each line of insurance recommended by the National

1-22     Association of Insurance Commissioners and all] companies that

1-23     write [writing the line of] insurance to which each [such] adopted

1-24     standard applies [formula is applicable] shall establish reserves

 2-1     in compliance with the standard [therewith].

 2-2           SECTION 2.  (a) As soon as practicable after the effective

 2-3     date of this Act, the commissioner of insurance shall adopt

 2-4     reserves standards under Article 21.39, Insurance Code, as amended

 2-5     by this Act.

 2-6           (b)  Until reserves standards adopted by the commissioner of

 2-7     insurance under Article 21.39, Insurance Code, as amended by this

 2-8     Act, become effective, an insurer shall comply with the

 2-9     requirements established under Article 21.39, Insurance Code, as

2-10     they existed immediately before the effective date of this Act.

2-11           SECTION 3.  The importance of this legislation and the

2-12     crowded condition of the calendars in both houses create an

2-13     emergency and an imperative public necessity that the

2-14     constitutional rule requiring bills to be read on three several

2-15     days in each house be suspended, and this rule is hereby suspended,

2-16     and that this Act take effect and be in force from and after its

2-17     passage, and it is so enacted.