By Turner of Coleman                                  H.B. No. 2389
         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 authorized investments and transactions of certain
 1-3     stipulated premium insurance companies.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Article 22.18, Insurance Code, is amended by
 1-6     amending Section 1 and adding a new Section 4, to read as follows:
 1-7           Sec. 1.  Except as provided in this Article, the [The]
 1-8     following Articles of this Code:  Article 1.14, Article 1.15,
 1-9     Article 1.16, Article 1.19, Article 1.24, Article 1.32, Article
1-10     3.10, Article 3.13, Article 3.39, Article 3.40, Article 3.61,
1-11     Article 3.63, Article 3.67, Article 21.07-7, Article 21.21, Article
1-12     21.25, Article 21.26, Article 21.28, Article 21.32, Article 21.39,
1-13     Article 21.45, and Article 21.47, shall apply to and govern
1-14     stipulated premium companies and each company shall comply with the
1-15     provisions thereof.
1-16           Sec. 4.  A stipulated premium insurance company issuing life,
1-17     health, or accident coverages or maintaining policies in force that
1-18     were issued in accordance with Article 22.23A of this code may
1-19     elect that its investments and transactions be governed by Article
1-20     3.33 of this code.  The election shall be made by written notice to
1-21     the commissioner and shall be effective on the first day of the
1-22     calendar quarter following the day on which the notice is filed
 2-1     with the commissioner.  After the second anniversary of the
 2-2     effective date of an initial election authorized by this section,
 2-3     the stipulated premium insurance company may elect that its
 2-4     investments and transactions be governed by Article 3.39 of this
 2-5     code.  The subsequent election shall be made by written notice to
 2-6     the commissioner and shall be effective on the first day of the
 2-7     calendar quarter following the day on which the notice is filed
 2-8     with the commissioner. In the event of a subsequent election, no
 2-9     further election by the stipulated premium insurance company may be
2-10     made under the authority of this section.
2-11           SECTION 2.  Section 1, Article 3.33, Insurance Code, is
2-12     amended to read as follows:
2-13           Sec. 1.  This article and the rules promulgated to interpret
2-14     and implement it shall apply to all domestic companies as defined
2-15     in Section 5 of Article 3.01 of this code and other insurers
2-16     specifically made subject to the provisions hereof, including a
2-17     stipulated premium insurance company electing to be governed by
2-18     this Article in accordance with Section 4 of Article 22.18 of this
2-19     code.  Articles 3.39, 3.40, and 3.40-1 of this code shall not be
2-20     applicable to such companies, but such articles shall continue to
2-21     be applicable to insurance companies chartered under Chapters 9,
2-22     10, 12, 13, 14, and 22 of this code, except as otherwise
2-23     specifically provided in such chapters.  This article shall not
2-24     limit or restrict the investments in or transactions with or within
2-25     subsidiaries and affiliates which are made pursuant to the
2-26     authority of the Texas Insurance Holding Company System Regulatory
 3-1     Act (Article 21.49-1, Insurance Code).
 3-2           SECTION 3.  This Act shall be effective September 1, 2001.