1-1     By:  Smithee (Senate Sponsor - Jackson)               H.B. No. 1703
 1-2           (In the Senate - Received from the House April 23, 2001;
 1-3     April 24, 2001, read first time and referred to Committee on
 1-4     Business and Commerce; May 7, 2001, reported favorably by the
 1-5     following vote:  Yeas 4, Nays 0; May 7, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to regulation of nonadmitted captive insurance companies.
 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10           SECTION 1.  Section 101.053(b), Insurance Code, is amended to
1-11     read as follows:
1-12           (b)  Sections 101.051 and 101.052 do not apply to:
1-13                 (1)  the lawful transaction of surplus lines insurance
1-14     under Article 1.14-2;
1-15                 (2)  the lawful transaction of reinsurance by insurers;
1-16                 (3)  a transaction in this state that:
1-17                       (A)  involves a policy that:
1-18                             (i)  is lawfully solicited, written, and
1-19     delivered outside this state; and
1-20                             (ii)  covers, at the time the policy is
1-21     issued, only subjects of insurance that are not resident, located,
1-22     or expressly to be performed in this state; and
1-23                       (B)  takes place after the policy is issued;
1-24                 (4)  a transaction:
1-25                       (A)  that involves an insurance contract
1-26     independently procured through negotiations occurring entirely
1-27     outside this state;
1-28                       (B)  that is reported; and
1-29                       (C)  on which premium tax is paid in accordance
1-30     with this chapter;
1-31                 (5)  a transaction in this state that:
1-32                       (A)  involves group life, health, or accident
1-33     insurance, other than credit insurance, and group annuities in
1-34     which the master policy for the group was lawfully issued and
1-35     delivered in a state in which the insurer or other person was
1-36     authorized to do insurance business; and
1-37                       (B)  is authorized by a statute of this state;
1-38                 (6)  an [a management or accounting] activity in this
1-39     state by or on the sole behalf of a nonadmitted captive insurance
1-40     company that insures solely [directors' and officers' liability
1-41     insurance for]:
1-42                       (A)  directors' and officers' liability insurance
1-43     for the directors and officers of the company's parent and
1-44     affiliated companies;
1-45                       (B)  the risks of the company's parent and
1-46     affiliated companies; or
1-47                       (C)  both the individuals and entities described
1-48     by Paragraphs (A) and (B);
1-49                 (7)  the issuance of a qualified charitable gift
1-50     annuity under Chapter 102; or
1-51                 (8)  a lawful transaction by a servicing company of the
1-52     Texas workers' compensation employers' rejected risk fund under
1-53     Section 4.08, Article 5.76-2, as that article existed before its
1-54     repeal.
1-55           SECTION 2.  This Act takes effect September 1, 2001.
1-56                                  * * * * *