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 * * * * *