1-1     By Smithee                                            H.B. No. 1976

 1-2     75R5707 SAW-F                           

 1-3                                   AN ACT

 1-4     relating to financial solvency requirements for certain property

 1-5     and casualty insurers.

 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-7           SECTION 1.  Subsection (f), Article 2.20, Insurance Code, is

 1-8     amended to read as follows:

 1-9           (f)  Notwithstanding any other provision of this code other

1-10     than Subsection (b) of this article, for insurers that write

1-11     business only in this state and that [which] are not required by

1-12     law to have capital stock, the minimum free surplus or guaranty

1-13     fund and free surplus required shall be the greater of that

1-14     required of the insurer immediately prior to the effective date of

1-15     this article or one-third of the net written premium of the insurer

1-16     for the preceding 12 months after deducting:

1-17                 (1)  lawfully ceded reinsurance; and

1-18                 (2)  policy fees, if any, not ceded to reinsurers.

1-19           SECTION 2.  This Act takes effect September 1, 1997.

1-20           SECTION 3.  The change in law made by this Act applies only

1-21     to the minimum free surplus or guaranty fund and free surplus of an

1-22     insurer on or after January 1, 1998.  The minimum free surplus or

1-23     guaranty fund and free surplus of an insurer before January 1,

1-24     1998, is governed by the law as it existed immediately before the

1-25     effective date of this Act, and that law is continued in effect for

1-26     that purpose.

1-27           SECTION 4.  The importance of this legislation and the

1-28     crowded condition of the calendars in both houses create an

1-29     emergency and an imperative public necessity that the

1-30     constitutional rule requiring bills to be read on three several

1-31     days in each house be suspended, and this rule is hereby suspended.