By Thompson H.B. No. 3304
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
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 if the commissioner of insurance
1-8 does not disapprove within 30 days after that notice is given, a]
1-9 domestic insurance company, including a life, health, and accident
1-10 insurance company, fire and marine insurance company, surety and
1-11 trust 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
2-1 Chapter 356, Acts of the 62nd Legislature, Regular Session, 1971
2-2 (Article 21.49-1, Vernon's Texas Insurance Code), may locate and
2-3 maintain all or any portion of its books, records, and accounts and
2-4 its principal offices outside this state at a location within the
2-5 United States if the company meets the requirements of this
2-6 section. This article does not apply to or prohibit the location
2-7 and maintenance of the normal books, records, and accounts of
2-8 either a branch office or agency office whether or not affiliated
2-9 with [of] a domestic insurance company at the branch office or
2-10 agency office, if that office is located in the United States.
2-11 (b) The domestic insurance company must be:
2-12 (1) an affiliate of an insurance holding company
2-13 system as defined in Article 21.49, Insurance Code, as added by
2-14 Chapter 356, Acts of the 62nd Legislature, Regular Session, 1971
2-15 (Article 21.49-1, Vernon's Texas Insurance Code), that has made the
2-16 necessary filings as required by that article and that is in
2-17 compliance with that article; or
2-18 (2) a nonprofit legal services corporation whose
2-19 claims and daily affairs are handled under contract by a foreign
2-20 insurer licensed to do a similar business in this state.
2-21 (c) The ultimate controlling person of the insurance holding
2-22 company system, the immediate controlling person of the domestic
2-23 insurance company, or an intermediate controlling person of the
2-24 domestic insurance company must be legally domiciled, licensed, or
2-25 admitted to transact business in a jurisdiction within the United
3-1 States.
3-2 (d) The books, records, accounts, or offices of the domestic
3-3 insurance company are under the company's direct supervision,
3-4 management, and control.
3-5 (e) Both the domestic insurance company and the controlling
3-6 person of the affiliated insurance holding company system must
3-7 appoint and maintain a person in this state as attorney for service
3-8 of process in the manner provided by Section 2(b), Article 1.36, of
3-9 this code. The commissioner is authorized to accept service and
3-10 notify the insurance company, in the manner provided by Section 3,
3-11 Article 1.36, of this code, if the insurance company does not
3-12 appoint or maintain an attorney for acceptance of process.
3-13 Sec. 2. (a) A credit on or offset to the amount of premium
3-14 taxes to be paid by the domestic insurance company to the state in
3-15 a taxable year may not be allowed on:
3-16 [(1) examination expenses incurred by representatives
3-17 of the department that are directly attributable to an examination
3-18 of the books, records, accounts, or principal offices of a domestic
3-19 insurance company located outside this state;]
3-20 (1) [(2)] examination expenses or fees paid to a state
3-21 other than this state; or
3-22 (2) [(3)] examination expenses paid in a different
3-23 taxable year.
3-24 (b) Examination expenses incurred by representatives of the
3-25 department that are directly attributable to an examination of the
4-1 books, records, accounts or principal offices of a domestic
4-2 insurance company located outside the state shall be reimbursed by
4-3 such domestic insurance company upon completion of the examination.
4-4 Such reimbursement of expenses shall be deposited in and expended
4-5 through the Texas Department of Insurance Operating Fund.
4-6 (c) [(b)] This article prevails over any conflicting
4-7 provisions in Articles 1.16, 4.10, 9.59, and 4.11 of this code or
4-8 any other law of this state.
4-9 SECTION 2. This Act takes effect September 1, 1999.
4-10 SECTION 3. The importance of this legislation and the
4-11 crowded condition of the calendars in both houses create an
4-12 emergency and an imperative public necessity that the
4-13 constitutional rule requiring bills to be read on three several
4-14 days in each house be suspended, and this rule is hereby suspended.