SRC-SLL H.B. 1829 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 1829
By: Farabee (Haywood)
Economic Development
5/14/1999
Engrossed


DIGEST

Current law protects consumers who buy property and casualty insurance from
licensed insurers who become insolvent, by providing for the Texas Property
and Casualty Insurance Guaranty Association (association) to pay
policyholders' claims. The association collects funds to pay claims by
charging its member insurers an assessment based on the value of all net
direct written premiums of all member insurers. The Texas Insurance Code
defines a "member insurer" as any person who writes any kind of insurance
to which the Texas Property and Casualty Insurance Guaranty Act
(Act)applies under Section 3 of the Act, including the exchange of
reciprocal or inter-insurance contracts, and who is licensed to transact
insurance in this state. Although stock, mutual, Lloyds insurers,
reciprocal or inter-insurance exchange, and county mutual insurance
companies are not encompassed within the statutory definition, the Texas
Department of Insurance treats them as member insurers. This treatment may
contravene existing law because the Insurance Code exempts these insurers
from the operation of all insurance laws except as specifically provided by
law. H.B. 1829 includes any stock, mutual, Lloyds insurer, reciprocal or
inter-insurance exchange, or county mutual insurance company among the
member insurers of the Texas Property and Casualty Insurance Guaranty
Association.  


PURPOSE

As proposed, H.B. 1829 relates to membership in the Texas Property and
Casualty Insurance Guaranty Association. 


RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 5(10), Article 21.28-C, Insurance Code, to
redefine "member insurer" to mean any insurer, rather than person, who
writes any kind of insurance to which the Texas Property and Casualty
Insurance Guaranty Act applies under Section 3 (Scope), and is licensed to
transact insurance in this state, including any stock, mutual, Lloyds
insurer, reciprocal or interinsurance exchange, or county mutual insurance
company. Proposes to delete the following language: "or other insurer
licensed to transact insurance in this state." (This language does not
currently exist in the definition of "member insurer.")  

SECTION 2. Effective date: September 1, 1999. 

SECTION 3. Emergency clause.