Bill not drafted by TLC or Senate E&E.

      Line and page numbers may not match official copy.

         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.  Amend Chapter 5, Insurance Code, by adding

 1-5     Article 5.41-2 to read as follows:

 1-6           Article 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 fifteen days

1-16     prior to the payment thereof.

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

1-20     long as the group has clearly identifiable underwriting

1-21     characteristics or is an association or group of business entities

1-22     engaged in similar undertakings.

1-23           Sec. 3.  The classes or lines of commercial business for

 2-1     which such dividends are authorized include any or all of the

 2-2     commercial classes or lines of commercial business regulated by

 2-3     this Chapter 5.

 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.