1-1 By: Flores (Senate Sponsor - Patterson) H.B. No. 1632
1-2 (In the Senate - Received from the House April 27, 1997;
1-3 April 29, 1997, read first time and referred to Committee on
1-4 Economic Development; May 7, 1997, reported favorably by the
1-5 following vote: Yeas 7, Nays 0; May 7, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the change of the name of the Texas Catastrophe
1-9 Property Insurance Association to the Texas Windstorm Insurance
1-10 Association.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 3(2), Article 5.13-2, Insurance Code, is
1-13 amended to read as follows:
1-14 (2) "Insurer" means an insurer to which Article 5.13
1-15 of this code applies, but does not include the Texas Windstorm
1-16 [Catastrophe Property] Insurance Association. However, the
1-17 provisions of Sections 4, 5, 6, and 7 of this article shall not
1-18 apply to Lloyd's or reciprocals with respect to commercial property
1-19 insurance.
1-20 SECTION 2. Section 2, Article 21.49, Insurance Code, is
1-21 amended to read as follows:
1-22 Sec. 2. NAME OF ACT. This Act shall be known as the "Texas
1-23 Windstorm [Catastrophe Property] Insurance Association [Pool] Act."
1-24 SECTION 3. Section 3(b), Article 21.49, Insurance Code, is
1-25 amended to read as follows:
1-26 (b) "Association" means the Texas Windstorm [Catastrophe
1-27 Property] Insurance Association as established pursuant to the
1-28 provisions of this Act.
1-29 SECTION 4. The heading to Section 4, Article 21.49,
1-30 Insurance Code, is amended to read as follows:
1-31 Sec. 4. Creation of the Texas Windstorm [Catastrophe
1-32 Property] Insurance Association.
1-33 SECTION 5. The heading to Section 5, Article 21.49,
1-34 Insurance Code, is amended to read as follows:
1-35 Sec. 5. Operation of the Texas Windstorm [Catastrophe
1-36 Property] Insurance Association; Association Board of Directors.
1-37 SECTION 6. Subsection (f), Article 24.17, Insurance Code, is
1-38 amended to read as follows:
1-39 (f) Whenever a financed insurance contract is cancelled, and
1-40 the premium finance agreement contains an assignment or power of
1-41 attorney for the benefit of the premium finance company, the
1-42 insurer shall return whatever unearned premiums are due under the
1-43 insurance contract directly to the premium finance company within
1-44 60 days after the policy cancellation date. The insurer, however,
1-45 may deduct from the unearned premium returned to the premium
1-46 finance company the amount of unearned commission due from the
1-47 agent or agency writing the insurance if the insurer notifies such
1-48 agent or agency that such unearned commission should be returned to
1-49 the premium finance company. The insurer shall remit the unearned
1-50 commission to the premium finance company within 120 days of the
1-51 policy cancellation date if the agent has not returned the same to
1-52 the premium finance company within 90 days after the policy
1-53 cancellation date.
1-54 Provided, however, agents or agencies shall be liable for the
1-55 return of unearned commissions on policies written through the
1-56 Texas Windstorm [Catastrophe Property] Insurance Association, the
1-57 Texas Automobile Insurance Plan, and the Texas Medical Liability
1-58 Insurance Underwriting Association. Agents or agencies placing
1-59 business through these plans shall return the unearned commissions
1-60 to the premium finance company within 60 days after the agent or
1-61 agency has been notified of the cancellation.
1-62 The insurer, except the Texas Windstorm [Catastrophe
1-63 Property] Insurance Association, the Texas Automobile Insurance
1-64 Plan, and the Texas Medical Liability Insurance Underwriting
2-1 Association, may return the unearned premiums to the producing
2-2 agent or agency; however, the insurer shall remain liable and remit
2-3 to the premium finance company within 120 days of the policy
2-4 cancellation date if the producing agent or agency does not return
2-5 the unearned premiums to the premium finance company within 90 days
2-6 after the policy cancellation date, provided the premium finance
2-7 company complied with the provisions of Article 24.22 herein. In
2-8 the event the premium finance company fails to comply with the
2-9 provisions in Article 24.22 herein, the insurer, including the
2-10 Texas Windstorm [Catastrophe Property] Insurance Association, the
2-11 Texas Automobile Insurance Plan, and the Texas Medical Liability
2-12 Insurance Underwriting Association, may satisfy any legal
2-13 obligations it has to return the unearned premiums due under the
2-14 insurance contract to the insurance premium finance company or
2-15 returning said unearned premiums to the producing agent or agency.
2-16 SECTION 7. Article 24.22, Insurance Code, is amended to read
2-17 as follows:
2-18 Art. 24.22. EXISTENCE OF AGREEMENT; NOTIFICATION OF
2-19 INSURERS. Any premium finance company which enters into a premium
2-20 finance agreement which includes an assignment or power of attorney
2-21 shall notify either the insurer or the Texas Windstorm [Catastrophe
2-22 Property] Insurance Association, the Texas Automobile Insurance
2-23 Plan, or the Texas Medical Liability Insurance Underwriting
2-24 Association whose premiums are being financed of the existence of
2-25 such agreement and to whom the premium payment has been made.
2-26 Provided, however, the premium finance company shall notify and
2-27 fund all premiums to county mutual insurance companies unless the
2-28 premium finance company is authorized in writing by the county
2-29 mutual to notify or fund an agent or managing general agent.
2-30 Notification shall be made within 30 days of the date the agreement
2-31 is accepted by the premium finance company.
2-32 SECTION 8. The importance of this legislation and the
2-33 crowded condition of the calendars in both houses create an
2-34 emergency and an imperative public necessity that the
2-35 constitutional rule requiring bills to be read on three several
2-36 days in each house be suspended, and this rule is hereby suspended,
2-37 and that this Act take effect and be in force from and after its
2-38 passage, and it is so enacted.
2-39 * * * * *