By: Armbrister S.B. No. 1740 97S0870/1 A BILL TO BE ENTITLED AN ACT 1-1 relating to the dissolution of the Texas workers' compensation 1-2 insurance facility and the transfer of certain assets and 1-3 liabilities to the Texas Property and Casualty Insurance Guaranty 1-4 Association. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. (a) The legislature finds and declares that: 1-7 (1) the requirement that the Texas workers' 1-8 compensation insurance facility contract with the Texas Workers' 1-9 Compensation Insurance Fund to assume all claims liabilities of the 1-10 facility is not in the best interest of the state and that the 1-11 Texas Property and Casualty Insurance Guaranty Association should 1-12 control the facility's operations; 1-13 (2) it is of paramount importance that all workers' 1-14 compensation claimants be assured that adequate financial resources 1-15 are available to pay workers' compensation claims as the claims 1-16 mature; and 1-17 (3) the facility has developed several public policy 1-18 initiatives which are important to the administration of the 1-19 workers' compensation system in Texas and should be continued, 1-20 including the antifraud program, servicing company performance 1-21 reviews, and collection of money due the facility. 1-22 (b) In accordance with Subsection (a) of this section, the 1-23 purposes of this Act are to: 2-1 (1) discontinue the Texas workers' compensation 2-2 insurance facility's operation as an independent entity by 2-3 transferring control of the facility to the Texas Property and 2-4 Casualty Insurance Guaranty Association; 2-5 (2) ensure that the Texas Property and Casualty 2-6 Insurance Guaranty Association has full authority to enforce the 2-7 existing rights of the facility without limitation except as 2-8 provided in this Act; and 2-9 (3) authorize the transfer of the facility's 2-10 operations without impairing the continuity of the public policy 2-11 initiatives provided in this section. 2-12 (c) This Act shall be liberally construed in conformity with 2-13 the legislative findings and purposes stated in this section. 2-14 SECTION 2. (a) On December 31, 1997, the members of the 2-15 governing committee of the Texas workers' compensation insurance 2-16 facility shall be deemed to have resigned and the board of 2-17 directors of the Texas Property and Casualty Insurance Guaranty 2-18 Association shall replace the governing committee of the facility. 2-19 (b) The board of directors of the Texas Property and 2-20 Casualty Insurance Guaranty Association shall submit to the 2-21 Commissioner of Insurance an amended plan of operation for the 2-22 assimilation of the operations of the Texas workers' compensation 2-23 insurance facility into the Texas Property and Casualty Insurance 2-24 Guaranty Association no later than October 31, 1997. 2-25 SECTION 3. Any assessment of members made after January 1, 3-1 1997, required to fund deficits from operations of the facility 3-2 shall be made as provided by Section 18, Article 21.28C, Insurance 3-3 Code, and shall be subject to the provisions of Section 21, Article 3-4 21.28-C, Insurance Code. 3-5 SECTION 4. The Texas Property and Casualty Insurance 3-6 Guaranty Association shall succeed to all rights, defenses, 3-7 immunities, and liabilities of the Texas workers' compensation 3-8 insurance facility in all litigation and other causes of action 3-9 pending by or against the facility on December 31, 1997, and causes 3-10 of action that arise after December 31, 1997, that relate to acts 3-11 or omissions that occurred prior to that date to which the facility 3-12 becomes a party. The litigation and causes of action described in 3-13 this section shall continue to be governed by and conducted under 3-14 Article 5.76-2, Insurance Code, and the applicable bylaws, rules, 3-15 and regulations of the facility. 3-16 SECTION 5. The immunity provisions of Subsection (h), 3-17 Section 2.05, Article 5.76-2, Insurance Code, and Section 2.12, 3-18 Article 5.76-2, Insurance Code, apply to all acts or omissions 3-19 occurring before, on, or after December 31, 1997, and such 3-20 provisions shall expressly apply to the powers and duties contained 3-21 in this Act. 3-22 SECTION 6. In an action against the Texas workers' 3-23 compensation insurance facility or its governing committee, 3-24 executive director, staff, agents, servants, attorneys, 3-25 consultants, employees, or member insurers, solely in their 4-1 capacity as member insurers, whether or not serving as such on 4-2 December 31, 1997, in connection with the facility's operations or 4-3 the transactions contemplated by this Act, the Texas Property and 4-4 Casualty Insurance Guaranty Association shall defend, indemnify, 4-5 and hold harmless such person for any act or omission taken in 4-6 connection with or arising from the performance of the person's 4-7 powers and duties on behalf of the facility. 4-8 SECTION 7. (a) Subsection (b), Section 18.24, Chapter 12, 4-9 Acts of the 72nd Legislature, 2nd Called Session, 1991, as amended 4-10 by Section 8, Chapter 885, Acts of the 73rd Legislature, 1993, is 4-11 hereby repealed. 4-12 (b) Section 2.03, Article 5.76-2, Insurance Code, is 4-13 repealed effective December 31, 1997. 4-14 SECTION 8. To the extent of a conflict between a provision 4-15 of this Act and any other law or statute, this Act shall control. 4-16 SECTION 9. The importance of this legislation and the 4-17 crowded condition of the calendars in both houses create an 4-18 emergency and an imperative public necessity that the 4-19 constitutional rule requiring bills to be read on three several 4-20 days in each house be suspended, and this rule is hereby suspended, 4-21 and that this Act take effect and be in force from and after its 4-22 passage, and it is so enacted.