By: Cain S.B. No. 1291 A BILL TO BE ENTITLED AN ACT 1-1 relating to permitting policyholder dividends for multiple lines of 1-2 insurance. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Chapter 5, Insurance Code, is amended by adding 1-5 Article 5.41-2 to read as follows: 1-6 Art. 5.41-2. MULTIPLE LINE DIVIDENDS 1-7 Sec. 1. An insurer may pay to a commercial policyholder or 1-8 group of commercial policyholders a dividend which covers more than 1-9 one class or line of commercial business. This dividend may only 1-10 be paid to the policyholder or group of policyholders after 1-11 adequate loss reserves are established on an aggregate basis for 1-12 the classes or lines of commercial insurance included within the 1-13 dividend, and the insurer must have sufficient surplus from which 1-14 to pay the dividend. An insurer shall file a notice of its intent 1-15 to pay such dividend with the department at least 15 days prior to 1-16 the payment of the dividend. 1-17 Sec. 2. Limitation of the payment of a dividend on one or 1-18 more classes or lines of commercial business to a group of 1-19 commercial policyholders shall not be unfair discrimination so long 1-20 as the group has clearly identifiable underwriting characteristics 1-21 or is an association or group of business entities engaged in 1-22 similar undertakings. 1-23 Sec. 3. The classes or lines of commercial business for 2-1 which dividends are authorized under this article include any or 2-2 all of the commercial classes or lines of commercial business 2-3 regulated by this chapter. 2-4 SECTION 2. The importance of this legislation and the 2-5 crowded condition of the calendars in both houses create an 2-6 emergency and an imperative public necessity that the 2-7 constitutional rule requiring bills to be read on three several 2-8 days in each house be suspended, and this rule is hereby suspended.