SRC-DBM AXB S.B. 1657 76(R)BILL ANALYSIS


Senate Research CenterS.B. 1657
By: Jackson
Economic Development
6/28/1999
Enrolled


DIGEST 

Currently, boards of directors of domestic insurance companies must
annually approve employee compensation which exceeds $50,000 per year.  Due
to salary increases, the number of people covered under this restriction
has grown significantly for many companies. Securing board approval for
each employee's salary which is over the statutory limit has become a
time-consuming process. S.B. 1657 would prohibit a "domestic" company from
paying any salary in an amount greater than $100,000 in any year to any
officer, trustee, or director or to any person, firm, or corporation,
unless the compensation is first authorized by the board of directors. 

PURPOSE

As enrolled, S.B. 1657 prohibits a "domestic" company from paying any
salary in an amount greater than $100,000 in any year to any officer,
trustee, or director or to any person, firm, or corporation, unless the
compensation is first authorized by the board of directors. 

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 Article 3.12(a), Insurance Code, to prohibit, rather
than require, a "domestic" company from paying any salary, compensation, or
emolument which, together with any salary, compensation, or emolument from
an affiliated "domestic" company, amounts in any year to more than
$100,000, rather than $50,000, to any officer, trustee, or director of the
"domestic" company or to any person, firm, or corporation, unless such
payment is first authorized by a vote of the board of directors of such
company, or by a committee of such board charged with the duty of
authorizing such payments.  Provides that the limitation as to the time
contained in this article does not, rather than herein shall, prevent a
"domestic" company from entering into contracts with its agents for the
payment of renewal commissions. 

SECTION 2.Effective date: September 1, 1999.

SECTION 3.Emergency clause.