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.