1-1 By: Cain S.B. No. 1291 1-2 (In the Senate - Filed March 12, 1997; March 18, 1997, read 1-3 first time and referred to Committee on Economic Development; 1-4 April 22, 1997, reported favorably by the following vote: Yeas 9, 1-5 Nays 0; April 22, 1997, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to permitting policyholder dividends for multiple lines of 1-9 insurance. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Chapter 5, Insurance Code, is amended by adding 1-12 Article 5.41-2 to read as follows: 1-13 Art. 5.41-2. MULTIPLE LINE DIVIDENDS 1-14 Sec. 1. An insurer may pay to a commercial policyholder or 1-15 group of commercial policyholders a dividend which covers more than 1-16 one class or line of commercial business. This dividend may only 1-17 be paid to the policyholder or group of policyholders after 1-18 adequate loss reserves are established on an aggregate basis for 1-19 the classes or lines of commercial insurance included within the 1-20 dividend, and the insurer must have sufficient surplus from which 1-21 to pay the dividend. An insurer shall file a notice of its intent 1-22 to pay such dividend with the department at least 15 days prior to 1-23 the payment of the dividend. 1-24 Sec. 2. Limitation of the payment of a dividend on one or 1-25 more classes or lines of commercial business to a group of 1-26 commercial policyholders shall not be unfair discrimination so long 1-27 as the group has clearly identifiable underwriting characteristics 1-28 or is an association or group of business entities engaged in 1-29 similar undertakings. 1-30 Sec. 3. The classes or lines of commercial business for 1-31 which dividends are authorized under this article include any or 1-32 all of the commercial classes or lines of commercial business 1-33 regulated by this chapter. 1-34 SECTION 2. The importance of this legislation and the 1-35 crowded condition of the calendars in both houses create an 1-36 emergency and an imperative public necessity that the 1-37 constitutional rule requiring bills to be read on three several 1-38 days in each house be suspended, and this rule is hereby suspended. 1-39 * * * * *