81R2564 PB-D
 
  By: Ellis S.B. No. 827
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment and operation of urban mutual
  insurance companies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. ESTABLISHMENT AND OPERATION OF URBAN MUTUAL INSURANCE
  COMPANIES
         SECTION 1.01.  The heading to Subtitle F, Title 6, Insurance
  Code, is amended to read as follows:
  SUBTITLE F. FARM, [AND] COUNTY, AND URBAN MUTUAL
  INSURANCE COMPANIES
         SECTION 1.02.  Subtitle F, Title 6, Insurance Code, is
  amended by adding Chapter 913 to read as follows:
  CHAPTER 913. URBAN MUTUAL INSURANCE COMPANIES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 913.001.  LIMITED EXEMPTION FROM INSURANCE LAWS;
  APPLICABILITY OF CERTAIN LAWS.  (a)  A provision of this code,
  other than this chapter, does not apply to an urban mutual insurance
  company holding a certificate of authority under this chapter
  unless urban mutual insurance companies are expressly mentioned in
  the other law.
         (b)  A law enacted after September 1, 2009, does not apply to
  an urban mutual insurance company unless the law states that it
  applies to an urban mutual insurance company.
         (c)  Except to the extent of any conflict with this chapter,
  the following provisions apply to an urban mutual insurance
  company:
               (1)  Chapter 32;
               (2)  Subchapter D, Chapter 36;
               (3)  Sections 32.021(c), 32.023, 32.041, 33.002,
  38.001, 201.005, 201.055, 421.001, 822.204, 841.004, 841.251,
  841.252, 862.101, 2002.004, and 2002.102;
               (4)  Chapter 81;
               (5)  Chapter 82;
               (6)  Chapter 83;
               (7)  Chapter 86;
               (8)  Chapter 221, subject to Section 221.008;
               (9)  Chapter 401;
               (10)  Chapter 404;
               (11)  Chapter 406;
               (12)  Chapter 422;
               (13)  Chapter 423;
               (14)  Subchapters A and B, Chapter 424, other than
  Section 424.052, 424.072, or 424.073;
               (15)  Chapter 441;
               (16)  Chapter 443;
               (17)  Chapter 462;
               (18)  Chapter 481;
               (19)  Chapter 493;
               (20)  Chapter 541;
               (21)  Subchapters A and B, Chapter 542;
               (22)  Subchapters A, B, F, and H, Chapter 544, and
  Subchapter G, Chapter 544, as added by Chapter 748 (H.B. 2810), Acts
  of the 79th Legislature, Regular Session, 2005;
               (23)  Subchapters B, C, and D, Chapter 551;
               (24)  Chapter 558;
               (25)  Chapter 559;
               (26)  Chapter 560;
               (27)  Chapter 601;
               (28)  Chapter 602;
               (29)  Chapter 651;
               (30)  Chapter 801;
               (31)  Chapter 802;
               (32)  Chapter 803;
               (33)  Chapter 804;
               (34)  Subchapter A, Chapter 805;
               (35)  Chapter 823;
               (36)  Chapter 824;
               (37)  Chapter 1806;
               (38)  Chapter 2006;
               (39)  Chapter 2007;
               (40)  Chapter 2210, subject to Section 2210.061;
               (41)  Chapter 2251;
               (42)  Title 13; and
               (43)  Article 1.09-1.
         (d)  After hearing, the commissioner may adopt rules
  regarding the application of a law referred to in Subsection (c) to
  urban mutual insurance companies. The department may enforce rules
  adopted under this subsection.
         Sec. 913.002.  RULEMAKING AUTHORITY; ENFORCEMENT.  (a)
  After hearing, the commissioner may adopt rules to clarify and
  augment this chapter as determined by the commissioner to be
  necessary to accomplish the purposes of this chapter.
         (b)  Using a rate-based methodology, the commissioner shall
  adopt rules to prevent overexposure of urban mutual insurance
  companies in any geographic area.
         (c)  The department may enforce rules adopted under this
  section.
         Sec. 913.003.  FEES.  (a)  The department shall charge and
  collect the fees for:
               (1)  an amendment to an urban mutual insurance
  company's charter; and
               (2)  the issuance of a company's certificate of
  authority.
         (b)  The department shall charge and the comptroller shall
  collect a fee for the filing of an annual statement required by the
  department.
         (c)  The commissioner shall set fees collected under this
  chapter in amounts reasonable and necessary to cover the costs of
  administering this chapter.
  [Sections 913.004-913.050 reserved for expansion]
  SUBCHAPTER B. ORGANIZATION OF URBAN MUTUAL
  INSURANCE COMPANY; DIRECTORS
         Sec. 913.051.  APPLICABILITY OF TEXAS NONPROFIT CORPORATION
  LAW.  Except to the extent of any conflict with this chapter, the
  Texas Nonprofit Corporation Law, as described by Section 1.008,
  Business Organizations Code, applies to an urban mutual insurance
  company. The commissioner has each power and duty of, and shall
  perform each act to be performed by, the secretary of state under
  that law with respect to urban mutual insurance companies.
         Sec. 913.052.  FORMATION OF COMPANY: INCORPORATION
  REQUIRED.  To form an urban mutual insurance company, an
  association of individuals that does not hold a certificate of
  authority issued by the department must obtain a charter as
  required by this subchapter.
         Sec. 913.053.  INCORPORATION REQUIREMENTS.  (a)  In this
  section, "separate risk" means one or more items of real property
  and the property's contents, if any, that are not exposed to any
  other property on which insurance is applied for in the association
  seeking the charter.
         (b)  To be granted a charter as an urban mutual insurance
  company, an association must:
               (1)  demonstrate that the association:
                     (A)  has existed as an association of individuals
  for at least three years preceding the date of the charter
  application;
                     (B)  has at least 100 individual members;
                     (C)  does not have capital stock;
                     (D)  is organized and operates solely for the
  mutual benefit of its members and not for profit;
                     (E)  has a representative form of government; and
                     (F)  has decided by a majority vote of the
  association's members to apply for a charter as an urban mutual
  insurance company under this chapter; and
               (2)  have:
                     (A)  at least 100 written applications for
  insurance on at least 400 separate risks; and
                     (B)  an unencumbered surplus as required by
  Section 913.258(b).
         (c)  Coverage for a risk described by Subsection (b)(2)(A)
  may not be in an amount that exceeds one percent of the total amount
  of insurance coverage to be issued by the association as stated in
  its application for a charter.
         Sec. 913.054.  CHARTER AND ARTICLES OF INCORPORATION.  
  (a)  The charter and articles of incorporation of an association
  that wants to form an urban mutual insurance company must state the
  names and post office addresses of at least 25 charter members of
  the company, all of whom are residents of one metropolitan
  statistical area in this state and each of whom must:
               (1)  be a member of the association;
               (2)  own at least $5,000 of insurable property for
  which the member has applied in writing for insurance coverage from
  the company to be formed; and
               (3)  sign the charter and articles of incorporation.
         (b)  In addition to the requirements of Subsection (a), the
  charter must:
               (1)  be acknowledged before a notary public by at least
  five of the charter members described by Subsection (a);
               (2)  state:
                     (A)  the name of the company, which must include
  the words "Urban Mutual";
                     (B)  the location of the company's principal
  office;
                     (C)  the number, names, and post office addresses
  of each of the company's first directors, of which there must be at
  least five; and
                     (D)  the type of property the company will insure
  and the risk to be insured against; and
               (3)  include any other provision the incorporators want
  consistent with this chapter.
         Sec. 913.055.  APPLICATION FOR PERMIT TO SOLICIT INSURANCE.  
  (a)  At least 10 residents described by Section 913.054(a) that
  want to form an urban mutual insurance company may apply to the
  department for a permit to solicit insurance on the mutual plan.
         (b)  The application for a permit to solicit insurance must:
               (1)  state:
                     (A)  that at least 100 individuals are members of
  an association described by Section 913.053(b)(1);
                     (B)  that the association has indicated, by
  majority vote, that the association wants to:
                           (i)  insure property of the association's
  members under this chapter; and
                           (ii)  be chartered as an urban mutual
  insurance company;
                     (C)  the name of the company, which must include
  the words "Urban Mutual";
                     (D)  the location of the company's principal
  office;
                     (E)  the risks the company proposes to insure;
  and
                     (F)  the names and places of residence of at least
  10 of the applicants; and
               (2)  be accompanied by:
                     (A)  affidavits of at least two of the applicants,
  each of whom must:
                           (i)  state the applicant's name and
  residence; and
                           (ii)  verify the facts stated in the
  application; and
                     (B)  a filing fee in the amount set by the
  commissioner.
         Sec. 913.056.  ISSUANCE OF PERMIT TO SOLICIT INSURANCE;
  TERM.  (a)  On receipt of an application for a permit to solicit
  insurance under Section 913.055, the department shall examine the
  application. If the department finds that the application complies
  with this chapter, the department shall issue to the applicants a
  permit to solicit insurance.
         (b)  A permit issued under this section authorizes the permit
  holders to solicit insurance on the mutual plan in accordance with
  the terms of the application. The permit does not authorize the
  permit holders to:
               (1)  issue insurance policies; or
               (2)  pay losses.
         (c)  A permit issued under this section is valid for six
  months. On receipt of an application for renewal and a renewal fee
  in the amount set by the commissioner, the department may renew a
  permit issued under Section 913.055 as frequently and for the
  period as the department determines necessary.
         Sec. 913.057.  COLLECTION AND REFUND OF MONEY FROM CERTAIN
  INDIVIDUALS APPLYING FOR INSURANCE.  An association described by
  Section 913.053(b)(1) of which the applicants for a permit to
  solicit insurance are members shall hold in trust money collected
  from an individual applying for insurance in the association until
  the association is incorporated. If the association's
  incorporation is not perfected, the association shall refund the
  money to the individual applying for the insurance.
         Sec. 913.058.  MEMBERSHIP CONTROL OF COMPANY.  (a)  The
  control of an urban mutual insurance company must be ultimately
  vested as provided by this chapter in the company's members through
  a board of directors, the members of which must be elected directly
  by the company's members or by delegates elected by the company's
  members.
         (b)  Through the company's governing body, the company's
  members may establish local branches or similar organizations.
         (c)  The methods provided by this section for the control of
  an urban mutual insurance company are exclusive.
         Sec. 913.059.  ELIGIBILITY OF BOARD OF DIRECTORS; TERM.  
  (a)  An individual is eligible to serve as a director of an urban
  mutual insurance company if the individual is a policyholder who
  maintains insurance coverage in the amount of at least $3,000
  written by the company on the individual's property.
         (b)  Except as otherwise provided by the company's bylaws or
  constitution, a director serves for a term of one year or until the
  director's successor qualifies for office.
         Sec. 913.060.  GENERAL POWERS OF BOARD OF DIRECTORS.  The
  board of directors of an urban mutual insurance company has the
  powers provided by:
               (1)  this chapter; and
               (2)  the company's charter, constitution, and bylaws to
  the extent those powers do not conflict with this chapter.
         Sec. 913.061.  AUTHORITY TO BORROW MONEY.  (a)  The board of
  directors of an urban mutual insurance company, acting through its
  authorized officers, may borrow money in an amount determined to be
  necessary to pay the company's accrued or unaccrued losses.
         (b)  The board may pledge as security for a loan the assets of
  the company, including the contingent liability of its
  policyholders.
         Sec. 913.062.  REMOVAL OF OFFICER OR DIRECTOR.  (a)  The
  board of directors of an urban mutual insurance company, at a
  meeting, may remove an officer or director of the company if, by a
  two-thirds majority vote of all the company's directors, the board
  determines that the removal of the individual is in the best
  interest of the company. The board may remove an officer or
  director under this subsection without stating a reason for the
  removal.
         (b)  The board may appoint one or more individuals to assume
  the duties and serve the unexpired term of an officer or director
  removed under this section.
         Sec. 913.063.  CREATION OF LOCAL BRANCHES.  (a)  An urban
  mutual insurance company's bylaws may provide for:
               (1)  the organization of local branches to transact the
  company's business; and
               (2)  the creation of districts in and for which
  directors may be elected.
         (b)  The bylaws may also provide that delegates from the
  company's local branches are the company's supreme governing body.
         (c)  The company may consider the hazards against which the
  company insures and the company's classes of risks and territory of
  operation in organizing the local branches and creating the
  districts.
         Sec. 913.064.  POLICYHOLDER MEETINGS.  (a)  An urban mutual
  insurance company shall hold a policyholder meeting to elect
  directors and transact business at the time and place and in the
  manner prescribed by the company's bylaws.
         (b)  A special meeting of a company's policyholders may be
  called by:
               (1)  the president, the general manager, or one-third
  of the company's directors; or
               (2)  the commissioner.
         Sec. 913.065.  VOTING BY POLICYHOLDER.  (a)  Each
  policyholder of an urban mutual insurance company is entitled to
  only one vote at a policyholders' meeting.
         (b)  A policyholder may not vote by proxy.
         Sec. 913.066.  AUTHORITY TO PROHIBIT WAIVER OF BYLAWS.  An
  urban mutual insurance company may provide in its bylaws that a
  company adjuster, representative appointed by the company, or local
  branch or officer or agent elected by the local branch may not waive
  a provision in the company's constitution or bylaws or in a policy
  issued by the company.
  [Sections 913.067-913.100 reserved for expansion]
  SUBCHAPTER C. AUTHORITY TO ENGAGE IN BUSINESS IN THIS STATE
         Sec. 913.101.  AUTHORITY TO ENGAGE IN BUSINESS.  Except to
  the extent of any conflict with this chapter, an urban mutual
  insurance company must hold a certificate of authority under
  Section 801.051 to engage in the business of insurance in this state
  under this chapter.
  [Sections 913.102-913.150 reserved for expansion]
  SUBCHAPTER D. POLICIES AND COVERAGE
         Sec. 913.151.  KINDS OF INSURANCE AUTHORIZED.  (a)  An
  urban mutual insurance company may insure property against loss or
  damage by:
               (1)  fire, lightning, explosion, theft, windstorm,
  hurricane, hail, riot, civil commotion, smoke, aircraft, or land
  vehicles; or
               (2)  any other hazard against which any other fire or
  windstorm insurance company operating in this state under Chapter
  862 may write insurance on property described by Subsection (b).
         (b)  The company may write insurance against the hazards
  described by Subsection (a) on:
               (1)  an urban dwelling and attendant outhouses and yard
  buildings and all their contents for home and personal use,
  including musical instruments and libraries;
               (2)  a church building, fraternal lodge hall, private
  or church school, or nonindustrial use building owned by a
  nonprofit organization, located in an urban area; or
               (3)  a trailer or mobile home located in an urban area.
         (c)  An insurance policy written by an urban mutual insurance
  company against loss or damage by windstorm, hurricane, or hail, as
  described by Subsection (a), may include coverage for:
               (1)  a building or other structure that is built wholly
  or partially over water; and
               (2)  the corporeal movable property contained in a
  building or structure described by Subdivision (1).
         (d)  The urban mutual insurance company may impose
  appropriate limits of coverage and deductibles for coverage
  described by Subsection (c).
         Sec. 913.152.  PROPERTY AND HAZARDS AGAINST WHICH COMPANY
  MAY NOT INSURE.  (a)  An urban mutual insurance company may not
  insure:
               (1)  a building, or the building's contents, with more
  than 40 percent of the building's floor space or more than 500
  square feet of floor space, whichever is less, used for business
  purposes, except as provided by Section 913.151(b)(2); or
               (2)  any type of commercial or private passenger motor
  vehicle, except as provided by Section 913.151(b)(3).
         (b)  An urban mutual insurance company may not assume or
  issue an insurance policy that:
               (1)  indemnifies an insured for liability to a third
  party the insured incurs in committing a tortious act; or
               (2)  covers an insured for liability the insured incurs
  under a contract to maintain, hold, or store property belonging to
  another.
         Sec. 913.153.  CONTRACT TERMS: INCORPORATION OF BYLAWS.  
  (a)  An urban mutual insurance company's bylaws are part of each
  contract between the company and an insured.
         (b)  Each policy issued by the company must state that the
  company's bylaws are part of the contract.
         Sec. 913.154.  CONTRACT TERMS: ADOPTION OF ADDITIONAL
  PROVISIONS.  (a)  An urban mutual insurance company may adopt as
  part of the company's bylaws and insurance policies any provision
  contained in the standard policies of companies writing fire or
  windstorm insurance as adopted by the commissioner to the extent
  the provision applies to an urban mutual insurance company.
         (b)  A company that adopts a provision as provided by
  Subsection (a) shall state in the company's bylaws or in each policy
  issued by the company that the provision has been adopted as
  provided by Subsection (a).
         Sec. 913.155.  REPAIR OR REPLACEMENT OF INSURED PROPERTY.  
  The company's bylaws may authorize the company to require, at its
  option, that all or a percentage of the money paid for a loss be used
  to replace or repair the damaged or destroyed property. The
  requirement may apply equally to personal and real property,
  including personal and real property exempt from execution, such as
  a homestead or a building on the homestead. The company may provide
  in its bylaws that the requirements of Section 862.053 do not apply
  to its insurance policies.
  [Sections 913.156-913.200 reserved for expansion]
  SUBCHAPTER E. CHARGES, PREMIUMS, AND ASSESSMENTS
         Sec. 913.201.  PAYMENT OF PREMIUM OR ASSESSMENT.  (a)  An
  urban mutual insurance company's bylaws must:
               (1)  state the time and manner of the levy and payment
  of a premium or assessment for policies written by the company;
               (2)  in addition to the regular premium or assessment
  under Subdivision (1), establish the contingent liability of a
  policyholder for all losses accrued while a policy is in force in
  the amount of at least $1 for each $100 of insurance coverage,
  except as provided by Subsection (b); and
               (3)  state the time and manner of payment of a
  policyholder's contingent liability established under Subdivision
  (2).
         (b)  A company's bylaws may provide for the issuance of
  policies without contingent liability as required by Subsection
  (a)(2) if the company has policyholder surplus in the amount of at
  least $1 million.
         (c)  As required by its bylaws, an urban mutual insurance
  company shall establish and levy premiums and assessments,
  including the contingent liability of a policyholder, for all
  insurance written by the company.
         (d)  A policyholder shall pay premiums and assessments as
  required by the company's bylaws.
         (e)  The premium or assessment for a policy shall be secured
  by a lien on each item of real or personal property, other than a
  homestead, covered by the policy, including the land on which an
  insured building is located. The lien remains on the property while
  the insured owns the property.
         (f)  A conservator, receiver, or liquidator of an urban
  mutual insurance company may not make an assessment against a
  policyholder for the contingent liability established under
  Subsection (a)(2).
         Sec. 913.202.  NONPAYMENT OF PREMIUMS OR ASSESSMENTS: FILING
  OF ACTION.  (a)  An urban mutual insurance company may bring an
  action in the county in which the company's home office is located
  against a policyholder who defaults on the payment of a premium or
  an assessment.
         (b)  The company is entitled to judgment against the
  policyholder for:
               (1)  delinquent premiums or assessments;
               (2)  foreclosure of the lien described by Section
  913.201; and
               (3)  the costs of an action, including a reasonable
  attorney's fee.
         Sec. 913.203.  POLICYHOLDER LIABILITY.  A policyholder is
  liable for the losses of an urban mutual insurance company only as
  provided by the company's constitution and bylaws, and only in
  proportion to the amount that the premium or assessment for the
  policyholder's policy bears to the total amount of premiums or
  assessments for all policies written by the company in the class to
  which the policyholder's policy belongs.
  [Sections 913.204-913.250 reserved for expansion]
  SUBCHAPTER F. REGULATION OF URBAN MUTUAL INSURANCE COMPANY;
  FINANCIAL REQUIREMENTS
         Sec. 913.251.  GENERAL OPERATING REQUIREMENTS.  (a)  In
  this section, "urban property" means property located inside an
  area of land subject to the taxing authority of a municipality with
  a population of more than 600,000.
         (b)  An urban mutual insurance company shall:
               (1)  maintain a majority of the company's total
  insurance in force on urban property at all times the insurance is
  written; and
               (2)  operate on a regular and special assessment basis.
         (c)  Except as otherwise approved by the commissioner, an
  urban mutual insurance company may not use more than 33 percent of
  the company's gross income for expenses.
         (d)  Property that is urban property at the time the property
  is originally insured continues to be classified as urban property
  if:
               (1)  the policy or policies that insure the property
  are written by the same urban mutual insurance company; and
               (2)  the coverage continues in effect without lapse of
  coverage for more than 60 days.
         Sec. 913.252.  LOCATION OF BUSINESS.  An urban mutual
  insurance company may write insurance in:
               (1)  the county in which the company's home office is
  located at the time of incorporation and in any county adjoining the
  county in and for which the company is organized;
               (2)  any county in which another urban mutual insurance
  company is not organized; and
               (3)  any county in this state if the company's reserve
  fund exceeds $200,000 in cash or securities in which the reserve
  fund of a stock fire insurance company may be invested.
         Sec. 913.253.  REINSURANCE.  (a)  An urban mutual insurance
  company may reinsure the company's risks with another company
  against any hazard against which the urban mutual insurance company
  is permitted to insure.
         (b)  The urban mutual insurance company may contract for
  mutual or reciprocal reinsurance with another company on the mutual
  or cooperative plan subject to the following conditions:
               (1)  the urban mutual insurance company may assume the
  reinsurance on the risks of the other company only if the other
  company reinsures the risks of the urban mutual insurance company;
  and
               (2)  the urban mutual insurance company may write or
  assume the reinsurance only on property that the company is
  authorized to insure and that is located in this state.
         (c)  An urban mutual insurance company that reinsures
  another company's property is liable for the losses of the other
  company only as specified in the reinsurance contract. The urban
  mutual insurance company does not become a member or partner of the
  other company as a result of the reinsurance.
         (d)  An urban mutual insurance company may pay or collect
  additional assessments or premiums for the purpose of a contract
  described by Subsection (b).
         Sec. 913.254.  ANNUAL REPORTS REQUIRED.  (a)  An urban
  mutual insurance company shall annually prepare a written report as
  required by this section and submit the report to the company's
  policyholders.
         (b)  The annual report must show:
               (1)  the total amount of premiums paid during the year
  for the policyholders' insurance;
               (2)  the company's operating expenses; and
               (3)  the total amount of claims paid and the amount paid
  for each covered peril.
         (c)  The company shall make available to each policyholder a
  copy of the annual report at the time and in the manner prescribed
  by the company's bylaws.
         (d)  An urban mutual insurance company shall make annual
  reports to the department as required by the commissioner or by law.
         Sec. 913.255.  EXAMINATION OF COMPANY.  The department
  shall examine each urban mutual insurance company as often as the
  department determines necessary.
         Sec. 913.256.  SOLVENCY REQUIREMENTS.  (a)  An urban mutual
  insurance company is solvent if:
               (1)  the company's assets, including the policyholders'
  contingent liability for the company's losses, are reasonably
  sufficient to pay the company's losses according to the terms of the
  policies; and
               (2)  the company's required unencumbered surplus, if
  any, has not been impaired in excess of 16-2/3 percent of the
  required unencumbered surplus.
         (b)  A company that is solvent as provided by this section
  may continue to engage in the business of insurance.
         Sec. 913.257.  RESERVE REQUIREMENTS.  (a)  An urban mutual
  insurance company's board of directors may provide for the
  accumulation of reserve funds.
         (b)  The company shall invest the reserve funds in the same
  type of securities in which the reserve funds of other fire
  insurance companies are required to be invested by law.
         Sec. 913.258.  SURPLUS REQUIREMENTS.  (a)  An urban mutual
  insurance company shall maintain an unencumbered surplus in cash of
  $2 for each $100 of insurance in force or an unencumbered surplus of
  $200,000, whichever amount is greater.
         (b)  An urban mutual insurance company shall invest the
  minimum unencumbered surplus as provided by Section 822.204.  The
  company may invest funds in excess of the minimum unencumbered
  surplus as provided by the provisions of Subchapter B, Chapter 424,
  other than Sections 424.052, 424.072, and 424.073.
         (c)  An urban mutual insurance company shall, without delay,
  restore the minimum unencumbered surplus if the surplus is
  impaired.  The department shall proceed as provided by Subchapter
  B, Chapter 404.
         SECTION 1.03.  Chapter 221, Insurance Code, is amended by
  adding Section 221.008 to read as follows:
         Sec. 221.008.  LIMITED PREMIUM TAX EXEMPTION FOR URBAN
  MUTUAL INSURANCE COMPANIES. (a) In this section, "urban mutual
  insurance company" means an insurance company organized and
  operating under Chapter 913.
         (b)  Notwithstanding any other provision of this chapter, an
  urban mutual insurance company is exempt from premium tax liability
  under this chapter until the second anniversary of the date on which
  the insurance company is issued its certificate of authority to
  engage in business in this state as an urban mutual insurance
  company.
         SECTION 1.04.  Subchapter B, Chapter 2210, Insurance Code,
  is amended by adding Section 2210.061 to read as follows:
         Sec. 2210.061.  PARTICIPATION BY URBAN MUTUAL INSURANCE
  COMPANIES. (a) In this section, "urban mutual insurance company"
  means an insurance company organized and operating under Chapter
  913.
         (b) Notwithstanding Sections 2210.051, 2210.052 and
  2210.058, an urban mutual insurance company that becomes authorized
  to write and is engaged in writing insurance that requires the
  insurance company to be a member of the association shall become a
  member of the association on the January 1 following the effective
  date of that authorization, but is not required to pay assessments
  under Section 2210.058 until the fourth anniversary of the January
  1 following the effective date of that authorization.
         (c)  On and after the fourth anniversary of the January 1
  following the effective date of the authorization described by
  Subsection (b), but before the fifth anniversary of that date, the
  assessments made against the urban mutual insurance company shall
  be computed based on 50 percent of the company's net direct written
  premium, as described by Sections 2210.052 and 2210.058. After the
  fifth anniversary of the January 1 following the effective date of
  the authorization described by Subsection (b), but before the sixth
  anniversary of that date, the assessments made against the urban
  mutual insurance company shall be computed based on 75 percent of
  the company's net direct written premium. After the sixth
  anniversary of the January 1 following the effective date of the
  authorization described by Subsection (b), the assessments made
  against the urban mutual insurance company shall be computed based
  on 100 percent of the company's net direct written premium.
         SECTION 1.05.  Subchapter A, Chapter 2251, Insurance Code,
  is amended by adding Section 2251.009 to read as follows:
         Sec. 2251.009.  URBAN MUTUAL INSURANCE COMPANIES.  (a) In
  this section, "urban mutual insurance company" means an insurance
  company organized and operating under Chapter 913.
         (b)  In reviewing rates under this chapter, the commissioner
  shall ensure that an urban mutual insurance company has pricing
  flexibility in setting premium rates for coverage provided by the
  insurance company until the second anniversary of the date on which
  the insurance company is issued its certificate of authority to
  engage in business in this state as an urban mutual insurance
  company.
  ARTICLE 2. CONFORMING AMENDMENTS
         SECTION 2.01.  Section 32.101, Insurance Code, is amended to
  read as follows:
         Sec. 32.101.  APPLICABILITY OF SUBCHAPTER.  This subchapter
  applies to insurers who comprise the top 25 insurance groups in the
  national market and who issue residential property insurance or
  personal automobile insurance policies in this state, including a
  Lloyd's plan, a reciprocal or interinsurance exchange, a county
  mutual insurance company, a farm mutual insurance company, an urban
  mutual insurance company, the Texas Windstorm Insurance
  Association, the FAIR Plan Association, and the Texas Automobile
  Insurance Plan Association.
         SECTION 2.02.  Section 38.152, Insurance Code, is amended to
  read as follows:
         Sec. 38.152.  EXEMPTION.  This subchapter does not apply to:
               (1)  a farm mutual insurance company;
               (2)  an urban mutual insurance company; or
               (3)  [to] a county mutual fire insurance company
  writing exclusively industrial fire insurance as described by
  Section 912.310.
         SECTION 2.03.  Section 81.003(a), Insurance Code, is amended
  to read as follows:
         (a)  In this section, "insurer" means any organization,
  corporation, or other person that transacts insurance business,
  other than an organization, corporation, or other person that is
  specifically made exempt from this section by a reference to this
  section, without regard to whether the organization, corporation,
  or other person is listed in this subsection. The term includes:
               (1)  a capital stock company;
               (2)  a title insurance company;
               (3)  a reciprocal or interinsurance exchange;
               (4)  a Lloyd's plan insurer;
               (5)  a fraternal benefit society;
               (6)  a mutual company, including a mutual assessment
  company;
               (7)  a statewide mutual assessment company;
               (8)  a local mutual aid association;
               (9)  a burial association;
               (10)  a county mutual insurance company;
               (11)  a farm mutual insurance company;
               (12)  an urban mutual insurance company; and
               (13) [(12)]  a fidelity, guaranty, or surety company.
         SECTION 2.04.  Section 82.002(a), Insurance Code, is amended
  to read as follows:
         (a)  This chapter applies to each company regulated by the
  commissioner, including:
               (1)  a domestic or foreign, stock or mutual, life,
  health, or accident insurance company;
               (2)  a domestic or foreign, stock or mutual, fire or
  casualty insurance company;
               (3)  a Mexican casualty company;
               (4)  a domestic or foreign Lloyd's plan insurer;
               (5)  a domestic or foreign reciprocal or interinsurance
  exchange;
               (6)  a domestic or foreign fraternal benefit society;
               (7)  a domestic or foreign title insurance company;
               (8)  an attorney's title insurance company;
               (9)  a stipulated premium insurance company;
               (10)  a nonprofit legal service corporation;
               (11)  a health maintenance organization;
               (12)  a statewide mutual assessment company;
               (13)  a local mutual aid association;
               (14)  a local mutual burial association;
               (15)  an association exempt under Section 887.102;
               (16)  a nonprofit hospital, medical, or dental service
  corporation, including a company subject to Chapter 842;
               (17)  a county mutual insurance company; [and]
               (18)  a farm mutual insurance company; and
               (19)  an urban mutual insurance company.
         SECTION 2.05.  Section 83.002, Insurance Code, is amended by
  adding Subsection (c) to read as follows:
         (c)  This chapter applies to an urban mutual insurance
  company.
         SECTION 2.06.  Section 252.005, Insurance Code, is amended
  to read as follows:
         Sec. 252.005.  EXCEPTION.  This chapter does not apply to:
               (1)  a farm mutual insurance company operating under
  Chapter 911;
               (2)  an urban mutual insurance company operating under
  Chapter 913; or
               (3) [(2)]  a mutual insurance company engaged in
  business under Chapter 12, Title 78, Revised Statutes, before that
  chapter's repeal by Section 18, Chapter 40, Acts of the 41st
  Legislature, 1st Called Session, 1929, as amended by Section 1,
  Chapter 60, General Laws, Acts of the 41st Legislature, 2nd Called
  Session, 1929, that retains the rights and privileges under the
  repealed law to the extent provided by those sections.
         SECTION 2.07.  Section 401.001(4), Insurance Code, is
  amended to read as follows:
               (4)  "Insurer" means an insurer authorized to engage in
  business in this state, including:
                     (A)  a life, health, or accident insurance
  company;
                     (B)  a fire and marine insurance company;
                     (C)  a general casualty company;
                     (D)  a title insurance company;
                     (E)  a fraternal benefit society;
                     (F)  a mutual life insurance company;
                     (G)  a local mutual aid association;
                     (H)  a statewide mutual assessment company;
                     (I)  a mutual insurance company other than a
  mutual life insurance company;
                     (J)  a farm mutual insurance company;
                     (K)  a county mutual insurance company;
                     (L)  a Lloyd's plan;
                     (M)  a reciprocal or interinsurance exchange;
                     (N)  a group hospital service corporation;
                     (O)  a stipulated premium company; [and]
                     (P)  a nonprofit legal services corporation; and
                     (Q)  an urban mutual insurance company.
         SECTION 2.08.  Section 404.001, Insurance Code, is amended
  to read as follows:
         Sec. 404.001.  DEFINITION.  In this subchapter, "insurer"
  includes:
               (1)  a capital stock insurance company;
               (2)  a reciprocal or interinsurance exchange;
               (3)  a Lloyd's plan;
               (4)  a fraternal benefit society;
               (5)  a mutual company, including a mutual assessment
  company;
               (6)  a statewide mutual assessment company;
               (7)  a local mutual aid association;
               (8)  a burial association;
               (9)  a county mutual insurance company;
               (10)  a farm mutual insurance company;
               (11)  a fidelity, guaranty, or surety company;
               (12)  a title insurance company;
               (13)  a stipulated premium company;
               (14)  a group hospital service corporation;
               (15)  a health maintenance organization;
               (16)  a risk retention group;
               (17)  an urban mutual insurance company; and
               (18) [(17)]  any other organization or person engaged
  in the business of insurance.
         SECTION 2.09.  Section 406.001, Insurance Code, is amended
  to read as follows:
         Sec. 406.001.  DEFINITION.  In this chapter, "insurer"
  includes:
               (1)  a capital stock insurance company;
               (2)  a reciprocal or interinsurance exchange;
               (3)  a Lloyd's plan;
               (4)  a fraternal benefit society;
               (5)  a mutual company, including a mutual assessment
  company;
               (6)  a statewide mutual assessment company;
               (7)  a local mutual aid association;
               (8)  a burial association;
               (9)  a county mutual insurance company;
               (10)  a farm mutual insurance company;
               (11)  a fidelity, guaranty, or surety company;
               (12)  a title insurance company;
               (13)  a stipulated premium company;
               (14)  a group hospital service corporation;
               (15)  a health maintenance organization;
               (16)  a risk retention group;
               (17)  an urban mutual insurance company; and
               (18) [(17)]  any other organization or person engaged
  in the business of insurance.
         SECTION 2.10.  Section 422.004, Insurance Code, is amended
  to read as follows:
         Sec. 422.004.  APPLICABILITY OF CHAPTER.  This chapter
  applies to:
               (1)  the following domestic insurers:
                     (A)  a stock life, health, or accident insurance
  company;
                     (B)  a mutual life, health, or accident insurance
  company;
                     (C)  a stock fire or casualty insurance company;
                     (D)  a mutual fire or casualty insurance company;
                     (E)  a title insurance company;
                     (F)  a mutual assessment company;
                     (G)  a local mutual aid association;
                     (H)  a local mutual burial association;
                     (I)  a statewide mutual assessment company;
                     (J)  a stipulated premium company;
                     (K)  a fraternal benefit society;
                     (L)  a group hospital service corporation;
                     (M)  a county mutual insurance company;
                     (N)  a Lloyd's plan;
                     (O)  a reciprocal or interinsurance exchange;
                     (P)  a farm mutual insurance company;
                     (Q)  an urban mutual insurance company; and
                     (R) [(Q)]  a mortgage guaranty insurer; and
               (2)  all kinds of insurance written by an insurer to
  which this chapter applies.
         SECTION 2.11.  Section 423.001(a), Insurance Code, is
  amended to read as follows:
         (a)  This chapter applies to a domestic insurer regulated
  under this code, including:
               (1)  a stock company;
               (2)  a reciprocal or interinsurance exchange;
               (3)  a Lloyd's plan;
               (4)  a fraternal benefit society;
               (5)  a stipulated premium company;
               (6)  a mutual insurance company of any kind, including:
                     (A)  a statewide mutual assessment company;
                     (B)  a local mutual aid association;
                     (C)  a burial association;
                     (D)  a county mutual insurance company; [and]
                     (E)  a farm mutual insurance company; and
                     (F)  an urban mutual insurance company; and
               (7)  any other organization or person engaged in the
  business of insurance.
         SECTION 2.12.  Section 441.002, Insurance Code, is amended
  to read as follows:
         Sec. 441.002.  DEFINITION.  In this chapter, unless the
  purposes of this chapter clearly require or the context clearly
  indicates another meaning, "insurer" means a person, organization,
  or company, regardless of whether the person or entity is
  authorized or admitted, that engages in the business of insurance
  or that acts as a principal or agent of a person, organization, or
  company engaged in the business of insurance.  The term includes a
  stock insurance company, reciprocal or interinsurance exchange,
  Lloyd's plan, fraternal benefit society, stipulated premium
  company, title insurance company, and mutual insurance company of
  any kind, including a statewide mutual assessment company, local
  mutual aid association, burial association, county mutual
  insurance company, [and] farm mutual insurance company, and urban
  mutual insurance company.
         SECTION 2.13.  Section 443.003, Insurance Code, is amended
  to read as follows:
         Sec. 443.003.  COVERED PERSONS.  The provisions of this
  chapter apply to all:
               (1)  insurers who are doing or have done an insurance
  business in this state and against whom claims arising from that
  business may exist now or in the future and to all persons subject
  to examination by the commissioner;
               (2)  insurers who purport to do an insurance business
  in this state;
               (3)  insurers who have insureds resident in this state;
               (4)  other persons organized or doing insurance
  business, or in the process of organizing with the intent to do
  insurance business in this state;
               (5)  nonprofit health corporations and all fraternal
  benefit societies subject to Chapters 844 and 885, respectively;
               (6)  title insurance companies subject to Title 11;
               (7)  health maintenance organizations subject to
  Chapter 843; and
               (8)  surety and trust companies subject to Chapter 7,
  general casualty companies subject to Chapter 861, statewide mutual
  assessment companies subject to Chapter 881, mutual insurance
  companies subject to Chapter 882 or 883, local mutual aid
  associations subject to Chapter 886, burial associations subject to
  Chapter 888, farm mutual insurance companies subject to Chapter
  911, county mutual insurance companies subject to Chapter 912,
  urban mutual insurance companies subject to Chapter 913, Lloyd's
  plans subject to Chapter 941, reciprocal or interinsurance
  exchanges subject to Chapter 942, and fidelity, guaranty, and
  surety companies.
         SECTION 2.14.  Section 493.002(a), Insurance Code, is
  amended to read as follows:
         (a)  Except as provided by Subsection (b), this chapter
  applies to all insurers, including:
               (1)  a stock or mutual property and casualty insurance
  company;
               (2)  a Mexican casualty insurance company;
               (3)  a Lloyd's plan;
               (4)  a reciprocal or interinsurance exchange;
               (5)  a nonprofit legal service corporation;
               (6)  a county mutual insurance company;
               (7)  a farm mutual insurance company;
               (8)  an urban mutual insurance company;
               (9)  a risk retention group; and
               (10) [(9)]  any insurer writing a line of insurance
  regulated by Title 10.
         SECTION 2.15.  Section 541.082(a), Insurance Code, is
  amended to read as follows:
         (a)  In this section, "insurer" includes:
               (1)  a life insurance company;
               (2)  a health insurance company;
               (3)  an accident insurance company;
               (4)  a general casualty company;
               (5)  a mutual life insurance company or other mutual
  insurance company;
               (6)  a mutual or natural premium life insurance
  company;
               (7)  a Lloyd's plan;
               (8)  a county mutual insurance company;
               (9)  a farm mutual insurance company;
               (10)  a reciprocal or interinsurance exchange;
               (11)  a fraternal benefit society;
               (12)  a local mutual aid association;
               (13)  a health maintenance organization;
               (14)  a group hospital service corporation; [or]
               (15)  a multiple employer welfare arrangement that
  holds a certificate of coverage under Chapter 846; or
               (16)  an urban mutual insurance company.
         SECTION 2.16.  Section 542.002, Insurance Code, is amended
  to read as follows:
         Sec. 542.002.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to the following insurers whether organized as a
  proprietorship, partnership, stock or mutual corporation, or
  unincorporated association:
               (1)  a life, health, or accident insurance company;
               (2)  a fire or casualty insurance company;
               (3)  a hail or storm insurance company;
               (4)  a title insurance company;
               (5)  a mortgage guarantee company;
               (6)  a mutual assessment company;
               (7)  a local mutual aid association;
               (8)  a local mutual burial association;
               (9)  a statewide mutual assessment company;
               (10)  a stipulated premium company;
               (11)  a fraternal benefit society;
               (12)  a group hospital service corporation;
               (13)  a county mutual insurance company;
               (14)  a Lloyd's plan;
               (15)  a reciprocal or interinsurance exchange; [and]
               (16)  a farm mutual insurance company; and
               (17)  an urban mutual insurance company.
         SECTION 2.17.  Section 542.052, Insurance Code, is amended
  to read as follows:
         Sec. 542.052.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to any insurer authorized to engage in business
  as an insurance company or to provide insurance in this state,
  including:
               (1)  a stock life, health, or accident insurance
  company;
               (2)  a mutual life, health, or accident insurance
  company;
               (3)  a stock fire or casualty insurance company;
               (4)  a mutual fire or casualty insurance company;
               (5)  a Mexican casualty insurance company;
               (6)  a Lloyd's plan;
               (7)  a reciprocal or interinsurance exchange;
               (8)  a fraternal benefit society;
               (9)  a stipulated premium company;
               (10)  a nonprofit legal services corporation;
               (11)  a statewide mutual assessment company;
               (12)  a local mutual aid association;
               (13)  a local mutual burial association;
               (14)  an association exempt under Section 887.102;
               (15)  a nonprofit hospital, medical, or dental service
  corporation, including a corporation subject to Chapter 842;
               (16)  a county mutual insurance company;
               (17)  a farm mutual insurance company;
               (18)  an urban mutual insurance company;
               (19) [(18)]  a risk retention group;
               (20) [(19)]  a purchasing group;
               (21) [(20)]  an eligible surplus lines insurer; and
               (22) [(21)]  except as provided by Section 542.053(b),
  a guaranty association operating under Chapter 462 or 463.
         SECTION 2.18.  Section 544.001, Insurance Code, is amended
  to read as follows:
         Sec. 544.001.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to:
               (1)  any legal entity engaged in the business of
  insurance in this state, including:
                     (A)  a capital stock insurance company;
                     (B)  a mutual insurance company;
                     (C)  a title insurance company;
                     (D)  a fraternal benefit society;
                     (E)  a local mutual aid association;
                     (F)  a statewide mutual assessment company;
                     (G)  a county mutual insurance company;
                     (H)  a Lloyd's plan;
                     (I)  a reciprocal or interinsurance exchange;
                     (J)  a stipulated premium company;
                     (K)  a group hospital service corporation;
                     (L)  a farm mutual insurance company;
                     (M)  an urban mutual insurance company;
                     (N) [(M)]  a risk retention group;
                     (O) [(N)]  an eligible surplus lines insurer; and
                     (P) [(O)]  an agent, broker, adjuster, or life and
  health insurance counselor; and
               (2)  a health maintenance organization.
         SECTION 2.19.  Section 544.051, Insurance Code, is amended
  to read as follows:
         Sec. 544.051.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to any individual, corporation, association,
  partnership, or other legal entity engaged in the business of
  insurance, including:
               (1)  a fraternal benefit society;
               (2)  a county mutual insurance company;
               (3)  a Lloyd's plan;
               (4)  a reciprocal or interinsurance exchange;
               (5)  a farm mutual insurance company;
               (6)  an urban mutual insurance company; and
               (7) [(6)]  an agent, broker, adjuster, or life and
  health insurance counselor.
         SECTION 2.20.  Section 544.252, Insurance Code, is amended
  to read as follows:
         Sec. 544.252.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to an insurer that is admitted to engage in the
  business of insurance and authorized to write an insurance policy
  providing coverage for losses resulting from fire in this state,
  including a county mutual insurance company, a Lloyd's plan, a
  reciprocal or interinsurance exchange, [or] a farm mutual insurance
  company, or an urban mutual insurance company.
         SECTION 2.21.  Section 544.301(1), Insurance Code, as added
  by Chapter 728 (H.B. 2018), Acts of the 79th Legislature, Regular
  Session, 2005, is amended to read as follows:
               (1)  "Insurer" means an insurance company, reciprocal
  or interinsurance exchange, mutual insurance company, capital
  stock company, county mutual insurance company, farm mutual
  insurance company, urban mutual insurance company, Lloyd's plan, or
  other legal entity authorized to write residential property
  insurance in this state.  The term includes an affiliate, as
  described by Section 823.003(a), if that affiliate is authorized to
  write and is writing residential property insurance in this
  state.  The term does not include:
                     (A)  an eligible surplus lines insurer regulated
  under Chapter 981;
                     (B)  the Texas Windstorm Insurance Association
  under Chapter 2210; or
                     (C)  the FAIR Plan Association under Chapter 2211.
         SECTION 2.22.  Section 544.352(2), Insurance Code, is
  amended to read as follows:
               (2)  "Insurer" means an insurance company, reciprocal
  or interinsurance exchange, mutual insurance company, capital
  stock company, county mutual insurance company, farm mutual
  insurance company, urban mutual insurance company, association,
  Lloyd's plan, or other entity writing residential property
  insurance in this state.  The term includes an affiliate, as
  described by Section 823.003(a), if that affiliate is authorized to
  write and is writing residential property insurance in this
  state.  The term does not include:
                     (A)  the Texas Windstorm Insurance Association
  created and operated under Chapter 2210; or
                     (B)  the FAIR Plan created and operated under
  Chapter 2211.
         SECTION 2.23.  Section 551.051(1), Insurance Code, is
  amended to read as follows:
               (1)  "Insurer" means an insurance company or other
  entity admitted to engage in business and authorized to write
  liability insurance in this state, including a county mutual
  insurance company, an urban mutual insurance company, a Lloyd's
  plan, and a reciprocal or interinsurance exchange. The term does
  not include a county mutual fire insurance company that writes
  exclusively industrial fire insurance as described by Section
  912.310 or a farm mutual insurance company.
         SECTION 2.24.  Section 551.101, Insurance Code, is amended
  to read as follows:
         Sec. 551.101.  DEFINITION.  In this subchapter, "insurer"
  means any authorized insurer writing property and casualty
  insurance in this state, including:
               (1)  a county mutual insurance company;
               (2)  a Lloyd's plan;
               (3)  a reciprocal or interinsurance exchange; [and]
               (4)  a farm mutual insurance company; and
               (5)  an urban mutual insurance company.
         SECTION 2.25.  Section 554.001, Insurance Code, is amended
  to read as follows:
         Sec. 554.001.  APPLICABILITY OF CHAPTER.  This chapter
  applies to each insurer or health maintenance organization engaged
  in the business of insurance or the business of a health maintenance
  organization in this state, regardless of form and however
  organized, including:
               (1)  a stock life, health, or accident insurance
  company;
               (2)  a mutual life, health, or accident insurance
  company;
               (3)  a stock fire or casualty insurance company;
               (4)  a mutual fire or casualty insurance company;
               (5)  a Mexican casualty insurance company;
               (6)  a Lloyd's plan;
               (7)  a reciprocal or interinsurance exchange;
               (8)  a fraternal benefit society;
               (9)  a title insurance company;
               (10)  an attorney's title insurance company;
               (11)  a stipulated premium company;
               (12)  a nonprofit legal services corporation;
               (13)  a statewide mutual assessment company;
               (14)  a local mutual aid association;
               (15)  a local mutual burial association;
               (16)  an association exempt under Section 887.102;
               (17)  a nonprofit hospital, medical, or dental service
  corporation, including a corporation subject to Chapter 842;
               (18)  a county mutual insurance company;
               (19)  a farm mutual insurance company;
               (20)  an urban mutual insurance company; and
               (21) [(20)]  an insurer or health maintenance
  organization engaged in the business of insurance or the business
  of a health maintenance organization in this state that does not
  hold a certificate of authority issued by the department or is not
  otherwise authorized to engage in business in this state.
         SECTION 2.26.  Section 558.001, Insurance Code, is amended
  to read as follows:
         Sec. 558.001.  DEFINITION.  In this chapter, "insurer"
  means an insurance company or other entity authorized to engage in
  the business of insurance in this state.  The term includes:
               (1)  a stock life, health, or accident insurance
  company;
               (2)  a mutual life, health, or accident insurance
  company;
               (3)  a stock fire or casualty insurance company;
               (4)  a mutual fire or casualty insurance company;
               (5)  a Mexican casualty insurance company;
               (6)  a farm mutual insurance company;
               (7)  a county mutual insurance company;
               (8)  a Lloyd's plan;
               (9)  a reciprocal or insurance exchange;
               (10)  a fraternal benefit society;
               (11)  a stipulated premium company;
               (12)  a nonprofit legal services corporation;
               (13)  a statewide mutual assessment company;
               (14)  a local mutual aid association;
               (15)  a local mutual burial association;
               (16)  an association exempt under Section 887.102;
               (17)  a nonprofit hospital, medical, or dental service
  corporation, including a corporation subject to Chapter 842;
               (18)  a risk retention group;
               (19)  a purchasing group;
               (20)  an eligible surplus lines insurer;
               (21)  an urban mutual insurance company; and
               (22) [(21)]  a guaranty association operating under
  Chapter 462 or 463.
         SECTION 2.27.  Section 559.001(10), Insurance Code, is
  amended to read as follows:
               (10)  "Insurer" means an insurer authorized to write
  property and casualty insurance in this state, including an
  insurance company, reciprocal or interinsurance exchange, mutual
  insurance company, capital stock company, county mutual insurance
  company, association, Lloyd's plan, or other entity writing
  personal insurance in this state.  The term includes an affiliate,
  as described by this code, if that affiliate is authorized to write
  personal insurance in this state.  The term does not include a farm
  mutual insurance company, an urban mutual insurance company, or an
  eligible surplus lines insurer under this code.
         SECTION 2.28.  Section 560.001, Insurance Code, is amended
  to read as follows:
         Sec. 560.001.  DEFINITION OF INSURER.  In this chapter,
  "insurer" means an insurance company, reciprocal or interinsurance
  exchange, mutual insurance company, farm mutual insurance company,
  urban mutual insurance company, capital stock insurance company,
  county mutual insurance company, Lloyd's plan, surplus lines
  insurer, or other legal entity engaged in the business of insurance
  in this state.  The term includes:
               (1)  an affiliate described by Section 823.003(a);
               (2)  the Texas Windstorm Insurance Association
  established under Chapter 2210;
               (3)  the FAIR Plan Association established under
  Chapter 2211; and
               (4)  the Texas Automobile Insurance Plan Association
  established under Chapter 2151.
         SECTION 2.29.  Section 602.001(1), Insurance Code, is
  amended to read as follows:
               (1)  "Covered entity" means a person who holds or is
  required to hold a license, registration, certificate of authority,
  or other authorization under this code or another insurance law of
  this state. The term includes:
                     (A)  an insurance company, including:
                           (i)  a county mutual insurance company;
                           (ii)  a farm mutual insurance company;
                           (iii)  a fraternal benefit society;
                           (iv)  a group hospital service corporation;
                           (v)  a Lloyd's plan;
                           (vi)  a local mutual aid association;
                           (vii)  a mutual insurance company;
                           (viii)  a reciprocal or interinsurance
  exchange;
                           (ix)  a statewide mutual assessment company;
                           (x)  an urban mutual insurance company; and
                           (xi) [(x)]  a stipulated premium company;
                     (B)  a health maintenance organization; and
                     (C)  an insurance agent.
         SECTION 2.30.  Section 651.001(5), Insurance Code, is
  amended to read as follows:
               (5)  "Insurer" means an entity organized or authorized
  to engage in the business of insurance under this code as a capital
  stock insurance company, title insurance company, reciprocal or
  interinsurance exchange, Lloyd's plan, fraternal benefit society,
  mutual or mutual assessment company of any kind, statewide mutual
  assessment company, local mutual aid association, burial
  association, county or farm mutual insurance company, urban mutual
  insurance company, fidelity, guaranty, or surety company, or trust
  company.
         SECTION 2.31.  Section 703.001, Insurance Code, is amended
  to read as follows:
         Sec. 703.001.  DEFINITION.  In this chapter, "covered
  entity" means a health maintenance organization or insurer
  regulated by the department, including:
               (1)  a stock life, health, or accident insurance
  company;
               (2)  a mutual life, health, or accident insurance
  company;
               (3)  a stock fire or casualty insurance company;
               (4)  a mutual fire or casualty insurance company;
               (5)  a Mexican casualty insurance company;
               (6)  a Lloyd's plan;
               (7)  a reciprocal or interinsurance exchange;
               (8)  a fraternal benefit society;
               (9)  a title insurance company;
               (10)  an attorney's title insurance company;
               (11)  a stipulated premium company;
               (12)  a nonprofit legal services corporation;
               (13)  a statewide mutual assessment company;
               (14)  a local mutual aid association;
               (15)  a local mutual burial association;
               (16)  an association exempt under Section 887.102;
               (17)  a nonprofit hospital, medical, or dental service
  corporation, including a corporation subject to Chapter 842;
               (18)  a county mutual insurance company; [and]
               (19)  a farm mutual insurance company; and
               (20)  an urban mutual insurance company.
         SECTION 2.32.  Section 801.001(2), Insurance Code, is
  amended to read as follows:
               (2)  "Insurer" means the issuer of an insurance policy
  that is issued to another in consideration of a premium and that
  insures against a loss that may be insured against under the law.
  The term includes a:
                     (A)  fraternal benefit society;
                     (B)  Lloyd's plan;
                     (C)  mutual company of any kind, including a:
                           (i)  statewide mutual assessment
  association;
                           (ii)  local mutual aid association or burial
  association; and
                           (iii)  county, [or] farm, or urban mutual
  insurance company;
                     (D)  reciprocal or interinsurance exchange; and
                     (E)  stock company.
         SECTION 2.33.  Section 802.051, Insurance Code, is amended
  to read as follows:
         Sec. 802.051.  APPLICABILITY OF SUBCHAPTER.  This
  subchapter applies to each company regulated by the commissioner,
  including:
               (1)  a stock life, health, or accident insurance
  company;
               (2)  a mutual life, health, or accident insurance
  company;
               (3)  a stock fire or casualty insurance company;
               (4)  a mutual fire or casualty insurance company;
               (5)  a Mexican casualty company;
               (6)  a Lloyd's plan;
               (7)  a reciprocal or interinsurance exchange;
               (8)  a fraternal benefit society;
               (9)  a title insurance company;
               (10)  an attorney's title insurance company;
               (11)  a stipulated premium insurance company;
               (12)  a nonprofit legal service corporation;
               (13)  a health maintenance organization;
               (14)  a statewide mutual assessment company;
               (15)  a local mutual aid association;
               (16)  a local mutual burial association;
               (17)  an association exempt under Section 887.102;
               (18)  a nonprofit hospital, medical, or dental service
  corporation, including a company subject to Chapter 842;
               (19)  a county mutual insurance company; [and]
               (20)  a farm mutual insurance company; and
               (21)  an urban mutual insurance company.
         SECTION 2.34.  Section 803.001(1), Insurance Code, is
  amended to read as follows:
               (1)  "Domestic company" means any entity licensed,
  chartered, or organized under this code, including:
                     (A)  a county mutual insurance company;
                     (B)  a farm mutual insurance company;
                     (C)  a fire and marine insurance company;
                     (D)  a fraternal benefit society;
                     (E)  a general casualty company;
                     (F)  a group hospital service corporation;
                     (G)  a health maintenance organization;
                     (H)  a life, health, and accident insurance
  company;
                     (I)  a Lloyd's plan;
                     (J)  a local mutual aid association;
                     (K)  a mutual life insurance company;
                     (L)  a mutual insurance company other than a
  mutual life insurance company;
                     (M)  a nonprofit legal services corporation;
                     (N)  a reciprocal exchange;
                     (O)  a statewide mutual assessment company;
                     (P)  a stipulated premium insurance company;
                     (Q)  a surety and trust company;
                     (R)  an urban mutual insurance company; and
                     (S) [(R)]  a title insurance company.
         SECTION 2.35.  Section 804.101(a)(2), Insurance Code, is
  amended to read as follows:
               (2)  "Company" means:
                     (A)  an insurance company, including:
                           (i)  a casualty insurance company;
                           (ii)  a county mutual insurance company;
                           (iii)  an exempt association under Section
  887.102;
                           (iv)  a farm mutual insurance company;
                           (v)  a fire insurance company;
                           (vi)  a fraternal benefit society;
                           (vii)  a life insurance company;
                           (viii)  a Lloyd's plan;
                           (ix)  a mutual assessment company;
                           (x)  a mutual insurance company other than a
  mutual life insurance company;
                           (xi)  a reciprocal exchange;
                           (xii)  a risk retention group;
                           (xiii)  a stipulated premium insurance
  company;
                           (xiv)  a title insurance company;
                           (xv)  an urban mutual insurance company;
  and
                           (xvi) [(xv)]  a carrier providing job
  protection insurance;
                     (B)  a group hospital service corporation;
                     (C)  a health maintenance organization;
                     (D)  a prepaid legal services corporation; or
                     (E)  any other company engaged in the business of
  insurance as a principal.
         SECTION 2.36.  Section 805.002(a), Insurance Code, is
  amended to read as follows:
         (a)  This subchapter applies to any insurer, including [a]:
               (1)  a capital stock company;
               (2)  a reciprocal or interinsurance exchange;
               (3)  a Lloyd's plan;
               (4)  a fraternal benefit society;
               (5)  a mutual company, including a mutual assessment
  company;
               (6)  a local mutual aid association;
               (7)  a burial association;
               (8)  a county mutual insurance company;
               (9)  a farm mutual insurance company;
               (10)  a fidelity, guaranty, or surety company;
               (11)  a mutual life insurance company;
               (12)  a mutual insurance company other than a mutual
  life insurance company;
               (13)  a stipulated premium company;
               (14)  a title insurance company;
               (15)  an urban mutual insurance company; and
               (16) [(15)]  any other insurance company engaged in the
  business of insurance in or organized under the laws of this state
  or otherwise regulated under this code.
         SECTION 2.37.  Section 821.002, Insurance Code, is amended
  to read as follows:
         Sec. 821.002.  EXEMPTIONS.  This subchapter does not apply
  to:
               (1)  a fraternal benefit society operating under
  Chapter 885;
               (2)  a local mutual aid association or local mutual
  burial association operating under Chapters 886, 887, and 888;
               (3)  a statewide mutual assessment company or
  association operating under Chapters 881, 887, or 888;
               (4)  another association operating under Subchapter C,
  Chapter 887;
               (5)  a farm mutual insurance company operating under
  Chapter 911; [or]
               (6)  a county mutual fire insurance company operating
  under Chapter 912; or
               (7)  an urban mutual insurance company operating under
  Chapter 913.
         SECTION 2.38.  Section 822.201, Insurance Code, is amended
  to read as follows:
         Sec. 822.201.  APPLICABILITY OF CAPITAL AND SURPLUS
  REQUIREMENTS.  The capital and surplus requirements of this
  chapter apply to each insurance company or other entity, other than
  a farm mutual insurance company or an urban mutual insurance
  company, authorized to write property and casualty insurance in
  this state including:
               (1)  a county mutual insurance company;
               (2)  a mutual insurance company, other than a mutual
  life insurance company;
               (3)  a Lloyd's plan; and
               (4)  a reciprocal or interinsurance exchange.
         SECTION 2.39.  Section 823.002(6), Insurance Code, is
  amended to read as follows:
               (6)  "Insurer" means any insurance company organized
  under the laws of this state, a commercially domiciled insurer, or
  an insurer authorized to engage in the business of insurance in this
  state. The term includes a capital stock company, mutual company,
  farm mutual insurance company, urban mutual insurance company,
  title insurance company, fraternal benefit society, local mutual
  aid association, statewide mutual assessment company, county
  mutual insurance company, Lloyd's plan, reciprocal or
  interinsurance exchange, stipulated premium insurance company, and
  group hospital service corporation. The term does not include the
  United States, a state, or an agency, authority, instrumentality,
  or political subdivision of a state.
         SECTION 2.40.  Section 827.001(1), Insurance Code, is
  amended to read as follows:
               (1)  "Insurer" means an insurance company or other
  legal entity authorized to engage in the business of insurance in
  this state, including a reciprocal or interinsurance exchange, a
  Lloyd's plan, and a county mutual insurance company. The term
  includes an affiliate. The term does not include a farm mutual
  insurance company, an urban mutual insurance company, or an
  eligible surplus lines insurer regulated under Chapter 981.
         SECTION 2.41.  Section 827.002, Insurance Code, is amended
  to read as follows:
         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 as the insurer;
               (2)  is authorized to engage in the business of
  insurance in this state; and
               (3)  is not a reciprocal or interinsurance exchange, a
  Lloyd's plan, a county mutual insurance company, [or] a farm mutual
  insurance company, or an urban mutual insurance company.
         SECTION 2.42.  Section 1806.102(b), Insurance Code, is
  amended to read as follows:
         (b)  This subchapter applies to:
               (1)  a farm mutual insurance company with respect to
  each line of insurance that a farm mutual insurance company is
  authorized to write under Section 911.151; [and]
               (2)  a county mutual insurance company with respect to
  each line of insurance that a county mutual insurance company is
  authorized to write under Section 912.151; and
               (3)  an urban mutual insurance company with respect to
  each line of insurance that an urban mutual insurance company is
  authorized to write under Section 913.151.
         SECTION 2.43.  Section 1807.002(b), Insurance Code, is
  amended to read as follows:
         (b)  Subsection (a) does not apply to:
               (1)  a farm mutual insurance company operating under
  Chapter 911;
               (2)  a mutual insurance company engaged in business
  under Chapter 12, Title 78, Revised Statutes, before that chapter's
  repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
  Called Session, 1929, as amended by Section 1, Chapter 60, General
  Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
  retains the rights and privileges under the repealed law to the
  extent provided by those sections; [or]
               (3)  a county mutual insurance company operating under
  Chapter 912; or
               (4)  an urban mutual insurance company operating under
  Chapter 913.
         SECTION 2.44.  Section 2002.004(b), Insurance Code, is
  amended to read as follows:
         (b)  This section applies to each insurer that provides
  personal property insurance in this state, including a county
  mutual insurance company, farm mutual insurance company, urban
  mutual insurance company, Lloyd's plan, and reciprocal or
  interinsurance exchange.
         SECTION 2.45.  Section 2002.006(c), Insurance Code, is
  amended to read as follows:
         (c)  This section does not apply to:
               (1)  a farm mutual insurance company operating under
  Chapter 911;
               (2)  a county mutual insurance company operating under
  Chapter 912;
               (3)  an urban mutual insurance company operating under
  Chapter 913;
               (4)  a mutual insurance company engaged in business
  under Chapter 12, Title 78, Revised Statutes, before that chapter's
  repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
  Called Session, 1929, as amended by Section 1, Chapter 60, General
  Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
  retains the rights and privileges under the repealed law to the
  extent provided by those sections;
               (5) [(4)]  the making of inspections or issuance of
  certificates of inspections on a boiler, apparatus, or machinery
  described by Subsection (b)(2), whether insured or otherwise; or
               (6) [(5)]  the insurance of a vessel or craft, its
  cargo, marine builder's risk, marine protection and indemnity, or
  another risk commonly insured under a marine insurance policy, as
  distinguished from an inland marine insurance policy.
         SECTION 2.46.  Section 2002.102(a), Insurance Code, is
  amended to read as follows:
         (a)  An insurer, including a farm mutual insurance company,
  urban mutual insurance company, county mutual insurance company,
  Lloyd's plan, or reciprocal or interinsurance exchange, that renews
  a homeowners insurance policy, fire and residential allied lines
  insurance policy, farm and ranch owners insurance policy, or farm
  and ranch insurance policy must provide the policyholder with
  written notice of any difference between each form of the policy
  offered to the policyholder on renewal and the form of the policy
  held immediately before renewal.
         SECTION 2.47.  Section 2006.001(3), Insurance Code, is
  amended to read as follows:
               (3)  "Insurer" means an insurer authorized to write
  property and casualty insurance in this state, including:
                     (A)  a county mutual insurance company;
                     (B)  a farm mutual insurance company;
                     (C)  an urban mutual insurance company;
                     (D)  a Lloyd's plan; and
                     (E) [(D)]  a reciprocal or interinsurance
  exchange.
         SECTION 2.48.  Section 2006.051(2), Insurance Code, is
  amended to read as follows:
               (2)  "Insurer" means an insurer authorized to write
  residential property insurance, including:
                     (A)  a county mutual insurance company;
                     (B)  a farm mutual insurance company;
                     (C)  an urban mutual insurance company;
                     (D)  a Lloyd's plan; and
                     (E)  [(D)]  a reciprocal or interinsurance
  exchange.
         SECTION 2.49.  Section 2007.001, Insurance Code, is amended
  to read as follows:
         Sec. 2007.001.  APPLICABILITY OF CHAPTER.  This chapter
  applies only to an insurer that:
               (1)  is authorized to engage in business in this state,
  including a stock company, mutual insurance company, farm mutual
  insurance company, urban mutual insurance company, county mutual
  insurance company, Lloyd's plan, and reciprocal or interinsurance
  exchange; and
               (2)  writes a policy of:
                     (A)  homeowners insurance;
                     (B)  fire insurance;
                     (C)  farm and ranch owners insurance;
                     (D)  private passenger automobile physical damage
  insurance;
                     (E)  commercial automobile physical damage
  insurance; or
                     (F)  commercial multiple peril insurance.
         SECTION 2.50.  Section 2203.055(a), Insurance Code, is
  amended to read as follows:
         (a)  The association is composed of each insurer, including a
  Lloyd's plan and a reciprocal or interinsurance exchange,
  authorized to write and writing liability insurance, including
  automobile liability insurance, on a direct basis in this state,
  other than:
               (1)  a farm mutual insurance company authorized under
  Chapter 911; [and]
               (2)  a county mutual insurance company authorized under
  Chapter 912; and
               (3)  an urban mutual insurance company authorized under
  Chapter 913.
         SECTION 2.51.  Section 2252.001(b), Insurance Code, is
  amended to read as follows:
         (b)  This chapter does not apply to:
               (1)  a farm mutual insurance company or association
  regulated under Chapter 911; [or]
               (2)  a county mutual insurance company regulated under
  Chapter 912; or
               (3)  an urban mutual insurance company regulated under
  Chapter 913.
         SECTION 2.52.  Section 4001.003(6), Insurance Code, is
  amended to read as follows:
               (6)  "Insurer" means an insurance company or insurance
  carrier regulated by the department. The term includes:
                     (A)  a stock life, health, or accident insurance
  company;
                     (B)  a mutual life, health, or accident insurance
  company;
                     (C)  a stock fire or casualty insurance company;
                     (D)  a mutual fire or casualty insurance company;
                     (E)  a Mexican casualty insurance company;
                     (F)  a Lloyd's plan;
                     (G)  a reciprocal or interinsurance exchange;
                     (H)  a fraternal benefit society;
                     (I)  a stipulated premium company;
                     (J)  a nonprofit or for-profit legal services
  corporation;
                     (K)  a statewide mutual assessment company;
                     (L)  a local mutual aid association;
                     (M)  a local mutual burial association;
                     (N)  an association exempt under Section 887.102;
                     (O)  a nonprofit hospital, medical, or dental
  service corporation, including a company subject to Chapter 842;
                     (P)  a health maintenance organization;
                     (Q)  a county mutual insurance company; [and]
                     (R)  a farm mutual insurance company; and
                     (S)  an urban mutual insurance company.
         SECTION 2.53.  Section 4051.001(b), Insurance Code, is
  amended to read as follows:
         (b)  This subchapter and Subchapters B-E, G, and I apply to
  each person who performs the acts of an agent, as described by
  Section 4001.051, whether through an oral, written, electronic, or
  other form of communication, by soliciting, negotiating,
  procuring, or collecting a premium on an insurance contract offered
  by any kind of insurer authorized to engage in the business of
  property and casualty insurance in this state, including:
               (1)  a fidelity or surety company;
               (2)  a mutual insurance company, including a farm
  mutual, an urban mutual, or a county mutual;
               (3)  a reciprocal or interinsurance exchange; and
               (4)  a Lloyd's plan.
         SECTION 2.54.  Sections 4051.101(a) and (c), Insurance Code,
  are amended to read as follows:
         (a)  Except as provided by Section 4051.052, a person is
  required to hold a limited property and casualty license if the
  person acts as an agent who writes:
               (1)  job protection insurance as defined by Section
  962.002;
               (2)  exclusively, insurance on growing crops under
  Subchapter F;
               (3)  any form of insurance authorized under Chapter 911
  for a farm mutual insurance company or authorized under Chapter 913
  for an urban mutual insurance company;
               (4)  exclusively, any form of insurance authorized to
  be solicited and written in this state that relates to:
                     (A)  the ownership, operation, maintenance, or
  use of a motor vehicle designed for use on the public highways,
  including a trailer or semitrailer, and the motor vehicle's
  accessories or equipment; or
                     (B)  the ownership, occupancy, maintenance, or
  use of a manufactured home classified as personal property under
  Section 2.001, Property Code;
               (5)  a prepaid legal services contract under Article
  5.13-1 or Chapter 961;
               (6)  exclusively, an industrial fire insurance policy:
                     (A)  covering dwellings, household goods, and
  wearing apparel;
                     (B)  written on a weekly, monthly, or quarterly
  basis on a continuous premium payment plan; and
                     (C)  written for an insurer exclusively engaged in
  the business as described by Section 912.310;
               (7)  credit insurance, except as otherwise provided by
  Chapter 4055; or
               (8)  any other kind of insurance, if holding a limited
  property and casualty license to write that kind of insurance is
  determined necessary by the commissioner for the protection of the
  insurance consumers of this state.
         (c)  This section does not apply to a person who wrote for the
  previous calendar year:
               (1)  policies authorized by Chapter 911 for a farm
  mutual insurance company that generated, in the aggregate, less
  than $50,000 in direct premium;
               (2)  policies authorized by Chapter 913 for an urban
  mutual insurance company that generated, in the aggregate, less
  than $50,000 in direct premium; or
               (3) [(2)]  industrial fire insurance policies that
  generated, in the aggregate, less than $20,000 in direct premium.
         SECTION 2.55.  Section 4152.001(4), Insurance Code, is
  amended to read as follows:
               (4)  "Insurer" means a commercially domiciled insurer
  or other person legally organized in this state to engage in the
  business of insurance as an insurance company, including:
                     (A)  a capital stock insurance company;
                     (B)  a mutual insurance company;
                     (C)  a title insurance company;
                     (D)  a fraternal benefit society;
                     (E)  a local mutual aid association;
                     (F)  a statewide mutual assessment company;
                     (G)  a county mutual insurance company;
                     (H)  a Lloyd's plan;
                     (I)  a reciprocal or interinsurance exchange;
                     (J)  a stipulated premium company;
                     (K)  a group hospital service corporation;
                     (L)  a farm mutual insurance company;
                     (M)  an urban mutual insurance company; and
                     (N) [(M)]  a risk retention group.
         SECTION 2.56.  Article 5.13(a), Insurance Code, is amended
  to read as follows:
         (a)  This subchapter applies to every insurance company,
  corporation, interinsurance exchange, mutual, reciprocal,
  association, Lloyd's plan, or other organization or insurer writing
  any of the characters of insurance business herein set forth,
  hereinafter called "Insurer"; provided that nothing in this entire
  subchapter shall be construed to apply to any county mutual
  insurance company, [or] farm mutual insurance company or
  association, or urban mutual insurance company, as regulated under
  Chapters 911, [and] 912, and 913 of this code, except that:
               (1)  Article 5.13-2 of this code shall apply to a county
  mutual insurance company with respect to personal automobile and
  commercial automobile insurance, residential and commercial
  property insurance, and inland marine insurance;
               (2)  Chapter 1806 applies [Article 5.20 of this code
  shall apply] to a county mutual insurance company with respect to
  each line of insurance that a county mutual insurance company is
  authorized to write under Section 912.151; and
               (3)  Chapter 1806 applies [Article 5.20 of this code
  shall apply] to:
                     (A)  a farm mutual insurance company with respect
  to each line of insurance that a farm mutual insurance company is
  authorized to write under Section 911.151; and
                     (B)  an urban mutual insurance company with
  respect to each line of insurance that an urban mutual insurance
  company is authorized to write under Section 913.151.
  ARTICLE 3. TRANSITION; EFFECTIVE DATE
         SECTION 3.01.  The commissioner of insurance shall adopt
  rules as required by Chapter 913, Insurance Code, as added by this
  Act, not later than December 1, 2009.
         SECTION 3.02.  The Texas Department of Insurance shall
  accept applications for certificates of authority to engage in
  business as an urban mutual insurance company beginning January 1,
  2010.
         SECTION 3.03.  This Act takes effect September 1, 2009.