By:  Eiland                                                       H.B. No. 928



A BILL TO BE ENTITLED

AN ACT

relating to the authorized investments and transactions of certain 
stipulated premium insurance companies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter G, Chapter 884, Insurance Code, as 
effective June 1, 2003, is amended by adding Section 884.311 to read 
as follows:
	Sec. 884.311.  LAW GOVERNING INVESTMENTS; ELECTION.  (a)  A 
stipulated premium insurance company issuing life, health, or 
accident coverages or maintaining policies in force that were 
issued in accordance with Subchapter I may elect that the company's 
investments and transactions be governed by Article 3.33 of this 
code.
	(b)  The election under Subsection (a) must be made by 
written notice to the commissioner and is effective on the first day 
of the calendar quarter following the day on which the notice is 
filed with the commissioner.
	(c)  After the second anniversary of the effective date of an 
initial election authorized by this section, the stipulated premium 
insurance company may elect that the company's investments and 
transactions be governed by Article 3.39 of this code.
	(d)  The subsequent election under Subsection (c) must be 
made by written notice to the commissioner and is effective on the 
first day of the calendar quarter following the day on which the 
notice is filed with the commissioner.
	(e)  After a stipulated premium insurance company has made a 
subsequent election under Subsection (c), the company may make 
another election under this section, subject to the approval of the 
election by the commissioner.
	SECTION 2.  Section 1, Article 3.33, Insurance Code, is 
amended to read as follows:
	Sec. 1.  SCOPE.  This article and the rules promulgated to 
interpret and implement it shall apply to all domestic insurance
companies as defined in Section 841.001 [5 of Article 3.01] of this 
code and other insurers specifically made subject to the provisions 
hereof, including a stipulated premium insurance company electing 
to be governed by this article under Section 884.311 of this code.  
Articles 3.39, 3.40, and 3.40-1 of this code shall not be applicable 
to such companies, but such articles shall continue to be 
applicable to insurance companies chartered under Chapters 9, 881
[10], 884 [12], 885 [13], 886 [14], and 887 [22] of this code, 
except as otherwise specifically provided in those chapters.  This 
article shall not limit or restrict the investments in or 
transactions with or within subsidiaries and affiliates which are 
made pursuant to the authority of the Texas Insurance Holding 
Company System Regulatory Act (Chapter 823, Insurance Code)
[(Article 21.49-1, Insurance Code)].
	SECTION 3.  This Act takes effect September 1, 2003.