85R7847 MEW-D

By: Muñoz, Jr. H.B. No. 1402

A BILL TO BE ENTITLED

AN ACT

relating to requirements regarding the withdrawal by certain insurers from the market for certain lines of insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 827.003, Insurance Code, is amended to read as follows:

Sec. 827.003. WITHDRAWAL PLAN REQUIRED. (a) An insurer shall file with the commissioner a plan for orderly withdrawal if the insurer proposes to:

(1) reduce the insurer's total annual premium volume by 50 percent or more;

(2) reduce the insurer's annual premium by 75 percent or more in a line of insurance in this state; or

(3) reduce in this state, or in any applicable rating territory, the insurer's total annual premium volume in a line of personal automobile or residential property insurance by 50 percent or more.

(b) An insurer shall file with the commissioner a plan for orderly withdrawal if the insurer proposes to withdraw from writing property and casualty insurance and controls 10 percent or more of total annual premium volume of property and casualty insurance in this state.

SECTION 2. Section 827.004, Insurance Code, is amended to read as follows:

Sec. 827.004. PROVISIONS OF WITHDRAWAL PLAN. (a) A withdrawal plan filed under Section 827.003 must:

(1) be constructed to protect the interests of the people of this state;

(2) indicate the dates on which the insurer intends to begin and to complete the plan; and

(3) provide for:

(A) meeting the insurer's contractual obligations;

(B) providing service to the insurer's policyholders and claimants in this state; and

(C) meeting any applicable statutory obligations, such as payment of assessments to the guaranty fund and participation in an assigned risk plan or joint underwriting arrangement.

(b) In addition to the provisions required under Subsection (a), a withdrawal plan filed under Section 827.003(b) must:

(1) provide for the insurer's incremental withdrawal from the property and casualty market by reducing the insurer's annual written premium in equal proportion over a 60-month period beginning on the date of approval of the plan under Section 827.005; and

(2) be constructed to allow the market an opportunity to stabilize.

SECTION 3. Section 827.005(a), Insurance Code, is amended to read as follows:

(a) Except as provided by Subsection (b), the commissioner shall approve a withdrawal plan that adequately provides for meeting the requirements prescribed by Section 827.004(a)(3) and, if applicable, Section 827.004(b) [827.004(3)].

SECTION 4. The change in law made by this Act applies only to a withdrawal plan filed with the commissioner of insurance on or after the effective date of this Act. A withdrawal plan filed with the commissioner of insurance before the effective date of this Act is governed by the law as it existed at the time the withdrawal plan was filed, and that law is continued in effect for that purpose.

SECTION 5. This Act takes effect September 1, 2017.