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A BILL TO BE ENTITLED
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AN ACT
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relating to certain contracts between the Texas Windstorm Insurance |
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Association or the Texas Public Finance Authority and a financial |
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advisor or investment banking services provider. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter M, Chapter 2210, Insurance Code, is |
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amended by adding Section 2210.622 to read as follows: |
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Sec. 2210.622. CONTRACT WITH FINANCIAL ADVISOR OR |
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INVESTMENT BANKING SERVICES PROVIDER. (a) In this section: |
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(1) "Financial advisor" means a person or business |
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entity that acts as a financial advisor, financial consultant, |
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money or investment manager, or securities broker. The term does |
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not include a person who acts solely as an underwriter or placement |
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agent with respect to an offering of securities. |
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(2) "Investment banking services" includes: |
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(A) participating as a placement agent, |
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underwriter, arranger, structurer, manager, or book runner in an |
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offering of securities or other capital markets transaction; |
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(B) financing or providing capital markets |
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capacity with respect to a transaction described by Paragraph (A); |
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(C) acting as counterparty in a financial |
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transaction, including any debt financing, guarantee arrangement, |
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bridge loan, structured or securitized financing, risk transfer, or |
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reinsurance arrangement; and |
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(D) providing investment appraisal or valuation |
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services, fairness opinions, contribution-in-kind reports, or |
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broker-dealer or other investment banking services. |
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(b) The association and, with respect to an offering of |
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public securities under this subchapter, the authority may not |
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contract with a person to: |
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(1) provide investment banking services to the |
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association or authority if, on the date the contract is entered |
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into or during the 12-month period immediately preceding the date |
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the contract is entered into, the person serves as a financial |
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advisor to the association or authority; or |
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(2) serve as a financial advisor or provide investment |
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banking services to the association or authority if, on the date the |
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contract is entered into or during the 12-month period immediately |
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preceding the date the contract is entered into, the person or an |
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affiliate of the person serves as a financial advisor or provides |
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investment banking services to a state or federal government |
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insurance program, pool, fund, or other residual market provider |
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that would reasonably be expected to incur substantial losses in |
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the event of any catastrophe that would also reasonably be expected |
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to cause substantial losses to the association, unless after notice |
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and public hearing the commissioner determines that: |
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(A) the contract would not give rise to a |
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conflict of interests; and |
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(B) the services already provided or to be |
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provided under the contract are immaterial to the association or |
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authority, as applicable, or to the state or federal government |
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insurance program, pool, fund, or residual market provider, as |
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applicable. |
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(c) A contract between the association or, with respect to |
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an offering of public securities under this subchapter, the |
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authority and a financial advisor or investment banking services |
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provider must include a provision that requires the financial |
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advisor or investment banking services provider, as a condition |
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subsequent, to promptly and on an ongoing basis disclose in writing |
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to the association or authority, as applicable, any change in the |
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contractual relationship between the financial advisor or |
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investment banking services provider, or an affiliate of the |
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financial advisor or investment banking services provider, and a |
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state or federal government insurance program, pool, fund, or other |
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residual market provider. |
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SECTION 2. Section 2210.622, Insurance Code, as added by |
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this Act, applies only to a contract entered into between the Texas |
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Windstorm Insurance Association or the Texas Public Finance |
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Authority and a financial advisor or investment banking services |
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provider on or after the effective date of this Act. A contract |
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entered into between the Texas Windstorm Insurance Association or |
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the Texas Public Finance Authority and a financial advisor or |
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investment banking services provider before the effective date of |
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this Act is governed by the law in effect on the date the contract is |
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entered into, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2013. |