By Thompson H.B. No. 3304
Substitute the following for H.B. No. 3304:
By Eiland C.S.H.B. No. 3304
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the books and records of insurers
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Art. 1.28. Out-of-State Books, Records,
1-5 Accounts, and Offices.
1-6 Sec. 1. (a) On giving written notice of intent to the
1-7 commissioner of insurance, and the commissioner of insurance does
1-8 not disapprove within 30 days after the notice is given, a domestic
1-9 insurance company, including a life, health, and accident insurance
1-10 company, fire and marine insurance company, surety and trust
1-11 company, general casualty company, title insurance company,
1-12 fraternal benefit society, mutual life insurance company, local
1-13 mutual aid association, statewide mutual assessment company, mutual
1-14 insurance company other than life, farm mutual insurance company,
1-15 county mutual insurance company, Lloyds plan, reciprocal exchange,
1-16 group hospital service corporation, health maintenance
1-17 organization, stipulated premium insurance company, nonprofit legal
1-18 services corporation, or any other entity licensed under the
1-19 Insurance Code or chartered or organized under the laws of this
1-20 state that is an affiliated member of an insurance holding company
1-21 system, as defined by Article 21.49-1, Insurance Code, as added by
1-22 Chapter 356, Acts of the 62nd Legislature, Regular Session, 1971
1-23 (Article 21.49-1, Vernon's Texas Insurance Code), may locate and
1-24 maintain all or any portion of its books, records, and accounts and
2-1 its principal offices outside this state at a location within the
2-2 United States if the company meets the requirements of this
2-3 section. This article does not apply to or prohibit the location
2-4 and maintenance of the normal books, records, and accounts
2-5 including policyholder and claim files of either a branch office or
2-6 agency office whether affiliated or not with the [of a] domestic
2-7 insurance company at the branch office or agency office, if office
2-8 is located in the United States. Any such books, records and
2-9 accounts maintained at either a branch or agency office shall be
2-10 available physically or via electronic means at a designated
2-11 location of the branch or agency office within this state to the
2-12 representatives of the department within three (3) business days of
2-13 receipt of a written request of the department.
2-14 (b) The domestic insurance company must be:
2-15 (1) an affiliate of an insurance holding company
2-16 system as defined in Article 21.49, Insurance Code, as added by
2-17 Chapter 356, Acts of the 62nd Legislature, Regular Session, 1971
2-18 (Article 21.49-1, Vernon's Texas Insurance Code), that has made the
2-19 necessary filings as required by that article and that is in
2-20 compliance with that article; or
2-21 (2) a nonprofit legal services corporation whose
2-22 claims and daily affairs are handled under contract by a foreign
2-23 insurer licensed to do a similar business in this state.
2-24 (c) The ultimate controlling person of the insurance holding
2-25 company system, the immediate controlling person of the domestic
2-26 insurance company, or an intermediate controlling person of the
2-27 domestic insurance company must be legally domiciled, licensed, or
3-1 admitted to transact business in a jurisdiction within the United
3-2 States.
3-3 (d) The books, records, accounts, or offices of the domestic
3-4 insurance company are under the company's direct supervision,
3-5 management, and control.
3-6 (e) Both the domestic insurance company and the controlling
3-7 person of the affiliated insurance holding company system must
3-8 appoint and maintain a person in this state as attorney for service
3-9 of process in the manner provided by Section 2(b), Article 1.36, of
3-10 this code. The commissioner is authorized to accept service and
3-11 notify the insurance company, in the manner provided by Section 3,
3-12 Article 1.36, of this code, if the insurance company does not
3-13 appoint or maintain an attorney for acceptance of process.
3-14 Sec. 2. (a) A credit on or offset to the amount of premium
3-15 taxes to be paid by the domestic insurance company to the state in
3-16 a taxable year may not be allowed on:
3-17 (1) examination expenses incurred by representatives
3-18 of the department that are directly attributable to an examination
3-19 of the books, records, accounts, or principal offices of a domestic
3-20 insurance company located outside this state;
3-21 (2) examination expenses or fees paid to a state other
3-22 than this state; or
3-23 (3) examination expenses paid in a different taxable
3-24 year.
3-25 (b) This article prevails over any conflicting provisions in
3-26 Articles 1.16, 4.10, 9.59, and 4.11 of this code or any other law
3-27 of this state.
4-1 SECTION 2. This Act takes effect September 1, 1999.
4-2 SECTION 3. The importance of this legislation and the
4-3 crowded condition of the calendars in both houses create an
4-4 emergency and an imperative public necessity that the
4-5 constitutional rule requiring bills to be read on three several
4-6 days in each house be suspended, and this rule is hereby suspended.