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78R5238 MXM-F

By:  Haggerty                                                     H.B. No. 1553



A BILL TO BE ENTITLED

AN ACT

relating to the financial security requirements of certain issuers 
of reimbursement insurance policies for service contract 
providers.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 1304.002, Occupations Code, is amended 
by adding Subdivision (5-a) to read as follows:
		(5-a)  "Executive director" means the executive 
director of the department.
	SECTION 2.  Section 1304.152, Occupations Code, is amended 
by adding Subsection (e) to read as follows:
	(e)  An insurer or other person, regardless of form of 
organization or place of domicile, may not issue a reimbursement 
insurance policy under Section 1304.151(a)(1) in this state unless 
the insurer or person first provides the executive director with 
audited financial statements demonstrating that the issuing 
insurer or person maintains capital and surplus of at least $25 
million.  The insurer or person shall provide this information to 
the executive director at least once every two years.
	SECTION 3.  This Act applies only to a reimbursement 
insurance policy that is delivered or issued for delivery on or 
after the effective date of this Act.  A policy that is delivered or 
issued for delivery before the effective date of this Act is 
governed by the law as it existed immediately before that date, and 
that law is continued in effect for that purpose.
	SECTION 4.  This Act takes effect June 1, 2003, if it 
receives a vote of two-thirds of all the members elected to each 
house, as provided by Section 39, Article III, Texas Constitution. 
If this Act does not receive the vote necessary for effect on that 
date, this Act takes effect September 1, 2003.