By:  Harris                                             S.B. No. 91
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to authorizing title auditors to audit and review escrow
 1-2     and trust accounts of title insurance companies.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Subsection (c), Section 14, Article 9.48,
 1-5     Insurance Code, is amended to read as follows:
 1-6           (c)  Powers and duties of association.  In addition to the
 1-7     powers and duties provided by other sections of this article, the
 1-8     association:
 1-9                 (1)  may render assistance and advice to the
1-10     commissioner, on the commissioner's [upon his] request, concerning
1-11     rehabilitation, payment of claims, continuations of coverage, or
1-12     the performance of other contractual obligations of any impaired
1-13     insurer or agent;
1-14                 (2)  has standing to appear before any court in this
1-15     state with jurisdiction over an impaired insurer or agent
1-16     concerning which the association is or may become obligated under
1-17     this article;
1-18                 (3)  Each director of the association shall file a
1-19     financial statement with the Texas Ethics Commission in accordance
1-20     with Subchapter B, Chapter 572, Government Code;[.]
1-21                 (4)  may borrow funds as necessary to implement this
1-22     article in accordance with the plan of operation;
1-23                 (5)  may lend money to an impaired insurer;
1-24                 (6)  sue or be sued, including taking any legal actions
 2-1     necessary or proper for recovery of any unpaid assessments;
 2-2                 (7)  may enter into contracts as necessary or proper to
 2-3     implement this article;
 2-4                 (8)  may employ or retain such persons who are
 2-5     necessary to handle the financial transactions of the association,
 2-6     and to perform any other functions that become necessary or proper
 2-7     under this article;
 2-8                 (9)  may ensure payment of the policy obligations of an
 2-9     impaired insurer;
2-10                 (10)  may negotiate and contract with any liquidator,
2-11     rehabilitator, conservator, receiver, or ancillary receiver to
2-12     carry out the powers and duties of the association;
2-13                 (11)  may guarantee, assume, or reinsure, or cause to
2-14     be guaranteed, assumed, or reinsured, a policy or contract of an
2-15     impaired insurer;
2-16                 (12)  may take legal action as necessary to avoid the
2-17     payment of improper claims, or to settle claims or potential claims
2-18     against the impaired insurer or association;
2-19                 (13)  shall, on the request of the commissioner,
2-20     authorize the expenditure of funds from the guaranty fee account to
2-21     retain, compensate, and reimburse for reasonable and necessary
2-22     expenses, a person or persons who will audit and review agent and
2-23     insurer escrow and trust accounts, financial condition, and
2-24     compliance with applicable statutes and rules and make reports
2-25     relating to the accounts, agent financial condition, and compliance
2-26     to the commissioner, solely under the direction of and as assigned
 3-1     by the commissioner;
 3-2                 (14)  shall collect, receive, retain, and disburse the
 3-3     income provided by Section 6 of this article solely for the
 3-4     purposes, to the persons, and under the circumstances that are
 3-5     specifically stated in this article; and
 3-6                 (15)  may perform other acts as necessary or proper to
 3-7     implement this article.
 3-8           SECTION 2.  This Act takes effect September 1, 1999.
 3-9           SECTION 3.  The importance of this legislation and the
3-10     crowded condition of the calendars in both houses create an
3-11     emergency and an imperative public necessity that the
3-12     constitutional rule requiring bills to be read on three several
3-13     days in each house be suspended, and this rule is hereby suspended.