78R7688 T

By:  Wise                                                         H.B. No. 1727



A BILL TO BE ENTITLED

AN ACT

relating to insurance withdrawal plans and requirements, and 
increasing its applicability.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 827, Insurance Code, is amended by 
amending 827.001, 827.002, 827.003, and 827.005, to read as 
follows:
	Sec. 827.001.  DEFINITIONS [DEFINITION].  In this chapter:
		(1)  "Insurer" includes any insurer or other entity 
authorized to write insurance in this state, including a county 
mutual insurance company, a Lloyd's plan insurance company, a 
reciprocal or inter-insurance exchange, or a farm mutual insurance 
company.
		(2)  "Rating[, "rating] territory" means a rating 
territory established by the department.
	Sec. 827.002.  EXEMPTION.  This chapter does not apply to a 
transfer of business from an insurer to a company that:
		(1)  is within the same insurance group [under common 
ownership] with the insurer; [and]
		(2)  is authorized to engage in the business of 
insurance in this state, and[.]
		(3)  does not adversely affect any policyholder in 
terms of the premium owed under any insurance policy during any 
insurance policy period in existence at the time of the transfer.
	Sec. 827.003.  WITHDRAWAL PLAN REQUIRED.  (a)  An 
[authorized] insurer shall file with the commissioner a plan for 
orderly withdrawal if the insurer proposes to:
		(1)  [withdraw from writing a line of insurance in this 
state or] reduce the insurer's total annual premium volume by 50 
[75] percent or more; [or]
		(2)  reduce the annual premium volume by 75 percent or 
more in a line of insurance in this state; or
		(3)  reduce, in whole or in any applicable [a] rating 
territory, the insurer's total annual premium volume in a personal 
line of motor vehicle insurance [comprehensive] or residential 
property insurance by 50 percent or more.
	(b)  In addition, an insurer, simultaneous with a filing, 
shall pay the commissioner a fee in an amount set by the 
commissioner of at least $1,000 but not to exceed $5,000.  Unless 
changed by the commissioner, the fee is $1,000.
	Sec. 827.005.  APPROVAL OF WITHDRAWAL PLAN.  (a)  The 
commissioner shall approve a withdrawal plan that adequately 
provides for meeting the requirements prescribed by Section 
827.004(3), unless the commissioner finds that any line of 
insurance described in the filed withdrawal plan is not offered in 
the state in a quantity or manner adequate to cover the risks or 
protect the interests of the citizens or potential policyholders of 
the state.  If the commissioner makes this finding, then the 
commissioner may order the date that the withdrawal begins and may 
modify, restrict, or limit the withdrawal in any manner the 
commissioner decides, in the commissioner's discretion.
	(b)  A withdrawal plan is deemed approved if the 
commissioner:               
		(1)  does not hold a hearing on the plan before the 61st 
[31st] day after the date the plan is filed with the commissioner; 
or
		(2)  does not deny approval before the 61st [31st] day 
after the date a hearing on the plan is held.
	SECTION 2.  This Act takes effect on 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 to take effect on 
that date, this Act takes effect September 1, 2003.