By Lewis of Tarrant                                   H.B. No. 1789

         75R6183 SAW-F                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to reductions by certain insurers in writing or in the

 1-3     authority of agents to bind or solicit certain types of personal

 1-4     lines insurance.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Article 21.49-2C, Insurance Code, is amended by

 1-7     amending Subsections (a) and (g) and adding Subsection (h) to read

 1-8     as follows:

 1-9           (a)  An [When an] authorized insurer shall file with the

1-10     commissioner a plan for orderly withdrawal if the insurer proposes

1-11     to withdraw from writing a line of insurance in this state or to

1-12     reduce its total annual premium volume by 75 percent or more or

1-13     proposes, in a personal line of motor vehicle liability or

1-14     residential property insurance, to reduce its total annual premium

1-15     volume in a rating territory by 25 percent or more, or to restrict

1-16     significantly an agent's authority in a rating territory to solicit

1-17     or bind a personal line of motor vehicle liability or residential

1-18     property insurance [it shall file with the commissioner a plan of

1-19     orderly withdrawal].  The insurer's plan shall be constructed to

1-20     protect the interests of the people of this state and shall

1-21     indicate the date it intends to begin and complete its withdrawal

1-22     plan and must contain provisions for:

1-23                 (1)  meeting the insurer's contractual obligations;

1-24                 (2)  providing service to its Texas policyholders and

 2-1     claimants;  and

 2-2                 (3)  meeting any applicable statutory obligations, such

 2-3     as the payment of assessments to the guaranty fund and

 2-4     participation in any assigned risk plans or joint underwriting

 2-5     arrangements.

 2-6           (g)  The commissioner may impose a moratorium of up to two

 2-7     years on the approval of plans for withdrawal and may renew the

 2-8     moratorium annually.  To impose or renew a moratorium, the

 2-9     commissioner must find at a public hearing with public

2-10     participation that a catastrophic event has occurred and that as a

2-11     result of the event, the relevant line of insurance is not

2-12     reasonably expected to be available to a substantial number of

2-13     policyholders or potential policyholders in this state, or in the

2-14     case of personal lines of motor vehicle liability or residential

2-15     property insurance, in a rating territory.  The commissioner may

2-16     limit a moratorium on withdrawal from or reduction in personal

2-17     lines insurance to certain geographical areas of this state.

2-18           (h)  The board shall adopt such rules as may be necessary to

2-19     enforce the provisions of this article.

2-20           SECTION 2.  This Act takes effect September 1, 1997, and

2-21     applies only to a reduction or restriction by an insurer on or

2-22     after that date in writing or in an agent's authority to solicit or

2-23     bind personal lines of motor vehicle liability or residential

2-24     property insurance.  A reduction or restriction by an insurer

2-25     before the effective date of this Act in an insurer's writing or in

2-26     an agent's authority to solicit or bind personal lines of motor

2-27     vehicle liability or residential property insurance is governed by

 3-1     the law as it existed immediately before the effective date of this

 3-2     Act, and that law is continued in effect for that purpose.

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

 3-4     crowded condition of the calendars in both houses create an

 3-5     emergency and an imperative public necessity that the

 3-6     constitutional rule requiring bills to be read on three several

 3-7     days in each house be suspended, and this rule is hereby suspended.