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A BILL TO BE ENTITLED
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AN ACT
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relating to insurer assessments to fund the catastrophe reserve |
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trust fund. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 2210, Insurance Code, is |
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amended by adding Section 2210.0581 to read as follows: |
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Sec. 2210.0581. TRUST FUND SOLVENCY ASSESSMENT; TAX CREDIT. |
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(a) In this section, "trust fund" means the catastrophe reserve |
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trust fund established under Subchapter J. |
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(b) To ensure available reserves and the capacity to pay |
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excess losses, the members of the association shall be assessed, |
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for deposit in the trust fund, an amount equal to 0.025 percent of |
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all members' net direct premium written in this state. |
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(c) The assessment under Subsection (b) shall be collected |
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annually until a determination is made under Subsection (d) that |
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the reserves in the trust fund are adequate to: |
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(1) pay any obligations of the trust fund under |
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Section 2210.058 existing as of the date of the assessment; |
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(2) establish a surplus in an amount reasonably |
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computed to pay future obligations incurred by the fund; and |
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(3) fund the mitigation and preparedness plan |
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established under Section 2210.454. |
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(d) The commissioner and the board of directors shall meet |
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annually in December to determine whether the reserves in the trust |
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fund are adequate under Subsection (c). The commissioner shall |
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notify each member of the association, not later than January 1 of |
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the subsequent year: |
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(1) of the amount of the member's assessment under this |
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section for that year, if the determination is made that the |
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reserves are not adequate; and |
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(2) that the assessment under this section will not be |
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collected, if the determination is made that the reserves are |
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adequate. |
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(e) A member of the association may not recoup an assessment |
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paid under this section through a premium surcharge. |
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(f) An insurer may credit an amount paid in accordance with |
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Subsection (b) in a calendar year against the insurer's premium tax |
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under Chapter 221. The tax credit authorized under this subsection |
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shall be allowed at a rate not to exceed 20 percent per year for five |
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or more successive years beginning the calendar year that the |
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assessments under this section are paid. The balance of payments |
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made by the insurer and not claimed as a premium tax credit may be |
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reflected in the books and records of the insurer as an admitted |
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asset of the insurer for all purposes, including exhibition in an |
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annual statement under Section 862.001. |
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SECTION 2. Section 2210.059, Insurance Code, is amended to |
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read as follows: |
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Sec. 2210.059. NOTIFICATION REGARDING TAX CREDITS. (a) |
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The association shall immediately notify the department if an |
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occurrence or series of occurrences in a catastrophe area results |
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in insured losses that result in a tax credit under Section |
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2210.058(c) in a calendar year. |
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[(b)] On receipt of notice under this subsection |
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[Subsection (a)], the department shall immediately notify the |
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governor and the appropriate committees of each house of the |
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legislature of the amount of insured losses eligible for tax |
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credits under Section 2210.058(c). |
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(b) The department shall annually notify the governor and |
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the appropriate committees of each house of the legislature of the |
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amount eligible for tax credits under Section 2210.0581. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2009. |