HBA-ATS H.B. 3177 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3177 By: Lewis, Glenn Insurance 4/4/1999 Introduced BACKGROUND AND PURPOSE 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. An insolvent domestic insurer is placed into receivership by a state district judge in Travis County. The judge orders the commissioner of insurance to take charge of the company. The commissioner may then hire a special deputy receiver to gather and pay out company assets to creditors. Article 21.28 (Liquidation, Rehabilitation, Reorganization or Conservation of Insurers), Insurance Code, sets forth the statutory requirement for filing claims against insolvent insurance companies placed in receivership. All persons who may have claims against an insolvent insurer are required to present them to the receiver within the deadline set by the receivership court, which in no event is less than 90 days after the date of the entry of the order specifying such time. Subject to court approval, the receiver may accept claims filed after the date specified by the court if the claims are filed with the receiver by the 90th day after the date notice of the claimant's right to file a proof of claim is mailed to the claimant. Claims that are not filed within the time specified by the court are prohibited from participating in any distribution of the assets by the receiver. Nonetheless, some Texas court have permitted claimants to file late in extenuating circumstances. It is unclear, however, whether the association is responsible for paying these claims. H.B. 3177 includes a date established under Section 3(b) (Claims), Article 21.28 (Property and Casualty Insurance Guaranty Act), Insurance Code, among the dates after which a claim is prohibited from being considered a covered claim filed with the Texas Property and Casualty Insurance Guaranty Association. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 8(d), Article 21.28-C, Insurance Code, to include a date established under Section 3(b) (Claims), Article 21.28 (Property and Casualty Insurance Guaranty Act), Insurance Code, among the dates after which a claim is prohibited from being considered a covered claim filed with the Texas Property and Casualty Insurance Guaranty Association. SECTION 2.Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3.Emergency clause.