85R5938 EES-F

By: Holland H.B. No. 2579

A BILL TO BE ENTITLED

AN ACT

relating to the bond and other coverages required to be maintained by or for the benefit of a savings bank.

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

SECTION 1. Section 92.156, Finance Code, is amended to read as follows:

Sec. 92.156. FINANCIAL INSTITUTION BOND [INDEMNITY BONDS OF DIRECTORS, OFFICERS, AND EMPLOYEES]. (a) A savings bank shall maintain a financial institution [blanket indemnity] bond that provides [with an] adequate coverage to protect [corporate surety protecting] the savings bank from loss:

(1) by or through dishonest or criminal action or omission, including fraud, theft, or misplacement [robbery, or burglary], by any of the following persons:

(A) an officer or employee of the savings bank;

(B) an attorney retained by the savings bank;

(C) a nonemployee performing data processing services for the savings bank; or

(D) a director of the savings bank performing a [when the director performs the] duty of an officer or employee; or

(2) by other perils such as robbery, burglary, forgery, or alteration.

(b) A savings bank that employs a collection agent who is not covered by the bond required by Subsection (a) shall:

(1) ensure that the savings bank is included as a loss payee in the collection agent's crime coverage; and

(2) obtain a certificate of insurance evidencing the sufficiency of the collection agent's crime coverage [provide for the bonding of the agent in an amount equal to at least twice the average monthly collection of the agent unless the agent is a financial institution insured by the Federal Deposit Insurance Corporation. An agent shall settle with the savings bank at least monthly].

(c) Subject to rules adopted under Subsection (e), the board shall, at least annually, review and approve:

(1) the coverage, including the amount of the coverage, provided by the bond and the form of the bond; and

(2) the sustainability [sufficiency] of the corporate surety or insurer that issued the bond.

(d) The bond must provide that a cancellation or other termination by the corporate surety or insurer or by the insured is not effective until the earlier of:

(1) the date the commissioner approves; or

(2) the 30th day after the date written notice of the cancellation is given to the commissioner.

(e) The finance commission may adopt rules establishing:

(1) the coverage, including the amount of the coverage, that must be provided by the bond and the form of the bond; and

(2) the sustainability [sufficiency] of the corporate surety or insurer that issues the bond.

SECTION 2. Not later than January 1, 2018:

(1) a savings bank that maintains a bond under Section 92.156, Finance Code, on the effective date of this Act shall obtain a bond that satisfies the requirements of Section 92.156, Finance Code, as amended by this Act; and

(2) a collection agent employed by a savings bank shall maintain crime coverage in compliance with Section 92.156(b), Finance Code, as amended by this Act.

SECTION 3. This Act takes effect September 1, 2017.