2003S0024-3 11/18/02

By:  Fraser, Jackson                                                      S.B. No. 125


A BILL TO BE ENTITLED

AN ACT

relating to insurance withdrawal and restriction plans; providing 
civil penalties.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 827, Insurance Code, is amended by 
amending Sections 827.001, 827.003, 827.006, and 827.007 and adding 
Sections 827.012 and 827.013 to read as follows:
	Sec. 827.001.  DEFINITIONS [DEFINITION].  In this chapter:
		(1)  "Insurer" includes any licensed insurer or other 
entity writing insurance in this state, including a county mutual 
insurance company, a Lloyd's plan company, a reciprocal or 
interinsurance exchange, or a farm mutual insurance company.
		(2)  "Rating[, "rating] territory" means a rating 
territory established by the department.
	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 75 
percent or more; or
		(2)  reduce, in a rating territory, the insurer's total 
annual premium volume in a personal line of motor vehicle 
comprehensive or residential property insurance by 50 percent or 
more.
	(b)  An authorized insurer shall file with the commissioner a 
plan for orderly withdrawal for each line of insurance for which the 
insurer is required to withdraw under Section 827.012.
	Sec. 827.006.  RESUMPTION OF WRITING INSURANCE AFTER 
COMPLETE VOLUNTARY WITHDRAWAL OR MANDATORY WITHDRAWAL.  (a)  An 
insurer that withdraws on its own initiative from writing all lines 
of insurance in this state or an insurer that is required to 
withdraw from all lines of insurance in this state under Section 
827.012 may not, without the approval of the commissioner, resume 
writing insurance in this state before the fifth anniversary of the 
date of withdrawal.
	(b)  An insurer that is required to withdraw from all lines 
of insurance in this state under Section 827.012 may not be approved 
to write any other lines of insurance in this state until the 
insurer is approved by the commissioner to write motor vehicle 
comprehensive insurance or residential property insurance.
	Sec. 827.007.  PENALTIES.  (a)  The commissioner may impose 
the civil penalties under Chapter 82 on an insurer that fails to 
obtain the commissioner's approval before the insurer:
		(1)  withdraws from writing a line of insurance in this 
state; or           
		(2)  reduces the insurer's total annual premium volume 
by 75 percent or more in any year.
	(b)  The commissioner may impose the civil penalties 
provided by Chapter 82 on an insurer that fails to file a withdrawal 
plan under Section 827.003(b) for each of the lines of insurance 
from which the insurer is required to withdraw or that fails to 
obtain the commissioner's approval for the withdrawal plan under 
that section for each of the lines of insurance from which the 
insurer is required to withdraw.
	Sec. 827.012.  MANDATORY WITHDRAWAL.  An authorized insurer 
that withdraws from writing a personal line of motor vehicle 
comprehensive insurance or residential property insurance in this 
state or that reduces its total annual premium volume by 75 percent 
or more in a personal line of motor vehicle comprehensive insurance 
or residential property insurance in this state may not write any 
other line of insurance in this state, including those lines the 
insurer is currently authorized to write and any additional new 
lines the insurer may otherwise be authorized to write.
	Sec. 827.013.  NO REQUIREMENT TO WRITE ADDITIONAL LINES.  
Nothing in this chapter shall be construed to require an insurer 
that writes only one line of motor vehicle comprehensive insurance 
or residential property insurance in this state to write any other 
line or lines of insurance.
	SECTION 2.  (a)  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 to take effect on 
that date, this Act takes effect September 1, 2003.
	(b)  This Act applies only to a reduction or withdrawal of a 
line of insurance by an insurer on or after the effective date of 
this Act.  A reduction or withdrawal of a line of insurance by an 
insurer before the effective date of this Act is governed by the law 
as it existed immediately before the effective date of this Act, and 
that law is continued in effect for that purpose.