SRC-LBB S.B. 1938 78(R)   BILL ANALYSIS


Senate Research Center   S.B. 1938
By: Averitt
State Affairs
5/5/2003
As Filed


DIGEST AND PURPOSE 

Currently, mortgage guaranty insurance companies are required by law to
deposit 50 percent of their premiums in a contingency reserve fund.  The
fund is used to cover catastrophic losses. 
As proposed, S.B. 1938 authorizes a mortgage guaranty insurer to withdraw
money from the fund with the approval of the commissioner of insurance. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Article 21.50, Section 5, Texas Insurance Code, to
authorize a mortgage guaranty insurer to withdraw from the contingency
reserve any amounts which are in excess of the requirements set out in
Section 6 of this article, with the approval of the commissioner of
insurance (commissioner).  Authorizes the commissioner, in reviewing a
request for withdrawal, to consider those records that may be necessary to
evaluate the request, including, but not limited to, records relating to
loss development and trends.  Authorizes the commissioner to also consider
the financial condition of the reinsurer, if any portion of the
contingency reserve for which withdrawal is requested is maintained by a
reinsurer. 

SECTION 2.  Effective date:  September 1, 2003.