By:  Armbrister                                                   S.B. No. 1283

Substitute the following for S.B. No. 1283:                                   

By:  Seaman                                                   C.S.S.B. No. 1283



A BILL TO BE ENTITLED

AN ACT

relating to the application of certain laws to certain commercially 
domiciled insurers and insurers that are part of an insurance 
company holding system.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 823.015, Insurance Code, is amended to 
read as follows:  
	Sec. 823.015.  EXEMPTION FROM CHAPTER AND CERTAIN OTHER 
LAW.  (a)  [This chapter does not apply to an insurance holding 
company system if each affiliate in the system is privately owned by 
not more than five security holders, each of whom is an individual.  
For purposes of this subsection, a person is a security holder of 
another if the person owns any security of the other person, 
including common stock, preferred stock, a debt obligation, and any 
other security convertible into or evidencing the right to acquire 
stock or a debt obligation.
	[(b)]  The commissioner may exempt from the application of 
this chapter a commercially domiciled insurer that the commissioner 
determines has assets physically located in this state or an 
asset-to-liability ratio sufficient to justify the conclusion that 
there is no reasonable danger that the operations or conduct of the 
business of the insurer could present a danger of loss to the 
policyholders of this state.
	(b)  The commissioner may exempt from the application of 
Articles 5.01-1 and 5.03-1 an insurer that is part of an insurance 
company holding system or a commercially domiciled insurer 
described by Section 823.004 if the commissioner finds that:
		(1)  the insurer has demonstrated that the exemption:                  
			(A)  is consistent with sound actuarial and 
underwriting practices used by the insurer in this state; and
			(B)  would encourage and improve competition in 
the line or lines of business to which the exemption applies; and
		(2)  the exemption will not adversely affect the 
operations or conduct of the insurer's business in this state in a 
manner that presents a danger of loss the insurer's policyholders 
in this state.
	SECTION 2.  An insurance holding system that becomes subject 
to Chapter 823, Insurance Code, as a result of the repeal of Section 
823.015(a), Insurance Code, by Section 1 of this Act is not required 
to comply with Chapter 823, Insurance Code, until January 1, 2006.
	SECTION 3.  This Act takes effect September 1, 2005.