By Ellis, et al. S.B. No. 1037
75R5956 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to required community investments by certain insurers and
1-3 to reports filed by insurers regarding those and other investments.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter E, Chapter 21, Insurance Code, is
1-6 amended by adding Article 21.39-C to read as follows:
1-7 Art. 21.39-C. COMMUNITY INVESTMENTS; REPORT
1-8 Sec. 1. LEGISLATIVE FINDINGS; PURPOSE. (a) The legislature
1-9 finds that insurers are a major source of investment capital in
1-10 this state. Many low-income communities in this state, both rural
1-11 and urban, need greater access to investment capital for purposes
1-12 such as small business and community economic development and
1-13 affordable housing rehabilitation and construction.
1-14 (b) The legislature further finds that investments under the
1-15 Community Reinvestment Act of 1977 (12 U.S.C. Section 2901 et
1-16 seq.) have helped to revitalize low-income communities and have
1-17 enhanced economic growth and stability in this state. Those types
1-18 of investments are overlooked business opportunities that offer
1-19 competitive rates of return and do not compromise the financial
1-20 interests of shareholders and policyholders.
1-21 (c) The purpose of this article is to increase safe and
1-22 sound investments by insurers in low-income communities and to
1-23 provide to the state information on investments in low-income
1-24 communities.
2-1 Sec. 2. DEFINITIONS. In this article:
2-2 (1) "Area median income" has the meaning assigned by
2-3 Section 2306.123, Government Code.
2-4 (2) "Insurer" means any entity authorized to do
2-5 business in this state as an insurance company or authorized to
2-6 provide insurance in this state, including:
2-7 (A) a capital stock company;
2-8 (B) a mutual company;
2-9 (C) a title insurance company;
2-10 (D) a fraternal benefit society;
2-11 (E) a local mutual aid association;
2-12 (F) a statewide mutual assessment company;
2-13 (G) a county mutual insurance company;
2-14 (H) a Lloyd's plan company;
2-15 (I) a reciprocal or interinsurance exchange;
2-16 (J) a stipulated premium insurance company;
2-17 (K) a group hospital service company;
2-18 (L) a health maintenance organization;
2-19 (M) a farm mutual insurance company;
2-20 (N) a risk retention group; and
2-21 (O) a surplus lines carrier.
2-22 (3) "Low income" means, in the case of an individual,
2-23 an individual income, or, in the case of a geographic area, a
2-24 median family income that is at least 50 percent and less than 80
2-25 percent of the adjusted area median income, adjusted for family
2-26 size and revised annually.
2-27 Sec. 3. COMMUNITY INVESTMENT. Each insurer that generates
3-1 an average annual written premium of at least $2 million in this
3-2 state has a continuing and affirmative obligation to invest in
3-3 low-income communities of this state in a manner that has a
3-4 positive effect on those communities.
3-5 Sec. 4. REPORT. (a) Each insurer shall annually report to
3-6 the department:
3-7 (1) each investment made by the insurer in this state
3-8 in an asset in this state or in a municipality, business, or
3-9 institution of this state, including an investment in:
3-10 (A) an obligation of this state, an agency of
3-11 this state, or a municipality or other political subdivision of
3-12 this state;
3-13 (B) real property or real property financing,
3-14 including the financing of construction or rehabilitation of
3-15 housing undertaken under a federal, state, or local housing
3-16 assistance program; and
3-17 (C) common stock or another security of business
3-18 in this state, including a security of a small business or business
3-19 located in an area designated by a federal, state, or local law or
3-20 program as an enterprise, economic development, or similar zone;
3-21 (2) each charitable contribution made by the insurer
3-22 in this state;
3-23 (3) each investment made in a low-income community of
3-24 this state under Section 3 of this article;
3-25 (4) each activity conducted by the insurer in this
3-26 state to make its customers aware of the investments and charitable
3-27 contributions made by the insurer; and
4-1 (5) any other similar information required by
4-2 commissioner's rule.
4-3 (b) The information required by Subsection (a) of this
4-4 section must be correct on the last day of the latest month
4-5 preceding the 30th day before the date on which the report is filed
4-6 with the department.
4-7 Sec. 5. RULES. (a) The commissioner shall adopt rules as
4-8 necessary to implement Section 3 of this article.
4-9 (b) The commissioner shall adopt rules on the submission of
4-10 reports under this article, including rules specifying the date by
4-11 which an insurer is required to file the report. The commissioner
4-12 may establish different filing dates for different types of
4-13 insurers to coordinate the filing date with the filing date for a
4-14 different report required under this code.
4-15 Sec. 6. INVESTMENTS NOT AUTHORIZED. This article does not
4-16 authorize an insurer to make an investment not otherwise authorized
4-17 by this code.
4-18 Sec. 7. PUBLIC INFORMATION. A report filed under this
4-19 article is public information.
4-20 SECTION 2. (a) Except as provided by Subsection (b) of this
4-21 section, this Act takes effect September 1, 1997.
4-22 (b) An insurer is not required to file an annual report
4-23 under Article 21.39-C, Insurance Code, as added by this Act, before
4-24 January 31, 1998. An insurer is not required to make a community
4-25 investment as required by Section 3, Article 21.39-C, Insurance
4-26 Code, as added by this Act, until the calendar year beginning
4-27 January 1, 1998.
5-1 SECTION 3. The importance of this legislation and the
5-2 crowded condition of the calendars in both houses create an
5-3 emergency and an imperative public necessity that the
5-4 constitutional rule requiring bills to be read on three several
5-5 days in each house be suspended, and this rule is hereby suspended.