1-1     By:  Smithee (Senate Sponsor - Sibley)                H.B. No. 1976

 1-2           (In the Senate - Received from the House April 18, 1997;

 1-3     April 22, 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 6, Nays 0; May 7, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to financial solvency requirements for certain property

 1-9     and casualty insurers.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subsection (f), Article 2.20, Insurance Code, is

1-12     amended to read as follows:

1-13           (f)  Notwithstanding any other provision of this code other

1-14     than Subsection (b) of this article, for insurers that write

1-15     business only in this state and that [which] are not required by

1-16     law to have capital stock, the minimum free surplus or guaranty

1-17     fund and free surplus required shall be the greater of that

1-18     required of the insurer immediately prior to the effective date of

1-19     this article or one-third of the net written premium of the insurer

1-20     for the preceding 12 months after deducting:

1-21                 (1)  lawfully ceded reinsurance; and

1-22                 (2)  policy fees, if any, not ceded to reinsurers.

1-23           SECTION 2.  This Act takes effect September 1, 1997.

1-24           SECTION 3.  The change in law made by this Act applies only

1-25     to the minimum free surplus or guaranty fund and free surplus of an

1-26     insurer on or after January 1, 1998.  The minimum free surplus or

1-27     guaranty fund and free surplus of an insurer before January 1,

1-28     1998, is governed by the law as it existed immediately before the

1-29     effective date of this Act, and that law is continued in effect for

1-30     that purpose.

1-31           SECTION 4.  The importance of this legislation and the

1-32     crowded condition of the calendars in both houses create an

1-33     emergency and an imperative public necessity that the

1-34     constitutional rule requiring bills to be read on three several

1-35     days in each house be suspended, and this rule is hereby suspended.

1-36                                  * * * * *