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A BILL TO BE ENTITLED
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AN ACT
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relating to the Texas Property and Casualty Insurance Guaranty |
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Association. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 462.004(4), Insurance Code, is amended |
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to read as follows: |
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(4) "Claimant" means an insured making a first-party |
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claim, [or] a person instituting a liability claim, or a workers' |
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compensation claimant. |
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SECTION 2. Section 462.007(b), Insurance Code, is amended |
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to read as follows: |
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(b) Except as provided by Subchapter F, this chapter does |
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not apply to: |
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(1) life, annuity, health, or disability insurance; |
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(2) mortgage guaranty, financial guaranty, or other |
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kinds of insurance offering protection against investment risks; |
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(3) a fidelity or surety bond, or any other bonding |
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obligation; |
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(4) credit insurance, guaranteed asset protection |
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insurance that protects a lender's or borrower's interest if the |
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amount owed on an asset exceeds its value, vendors' single-interest |
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insurance, collateral protection insurance, or similar insurance |
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protecting a creditor's interest arising out of a creditor-debtor |
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transaction; |
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(5) insurance of warranties or service contracts; |
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(6) title insurance; |
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(7) ocean marine insurance; |
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(8) a transaction or combination of transactions |
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between a person, including an affiliate of the person, and an |
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insurer, including an affiliate of the insurer, that involves the |
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transfer of investment or credit risk unaccompanied by the transfer |
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of insurance risk, including transactions, except for workers' |
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compensation insurance, involving captive insurers, policies in |
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which deductible or self-insured retention is substantially equal |
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in amount to the limit of the liability under the policy, and |
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transactions in which the insured retains a substantial portion of |
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the risk; or |
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(9) insurance provided by or guaranteed by government. |
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SECTION 3. Section 462.017(b), Insurance Code, is amended |
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to read as follows: |
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(b) Venue in a suit by or against the commissioner or |
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association [relating to an action or ruling of the commissioner or |
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association] under this chapter is in Travis County. The |
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commissioner or association is not required to give an appeal bond |
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in an appeal of a cause of action arising under this chapter. |
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SECTION 4. Section 462.054, Insurance Code, is amended to |
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read as follows: |
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Sec. 462.054. ELIGIBILITY TO SERVE AS INDUSTRY |
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REPRESENTATIVE. To be eligible to serve as an insurance industry |
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board member, an individual must be an officer or a full-time |
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employee of a member insurer or affiliated entity. |
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SECTION 5. Section 462.105, Insurance Code, is amended to |
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read as follows: |
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Sec. 462.105. ACCOUNTS. For purposes of administration and |
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assessment, the association maintains the following four accounts |
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[is divided into]: |
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(1) the administrative account; |
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(2) the workers' compensation insurance account; |
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(3) [(2)] the automobile insurance account; and |
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(4) [(3)] the account for all other lines of insurance |
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to which this chapter applies. |
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SECTION 6. Section 462.156(a), Insurance Code, is amended |
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to read as follows: |
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(a) The amounts provided under assessments made under this |
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chapter supplement the marshalling of assets by the receiver under |
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Chapter 443 [442] to make payments on the impaired insurer's |
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behalf. |
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SECTION 7. Sections 462.308(a), (b), and (c), Insurance |
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Code, are amended to read as follows: |
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(a) The association is entitled to recover: |
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(1) the amount of a covered claim and the cost of |
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defense paid on behalf of a person: |
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(A) who is an affiliate of the impaired insurer; |
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and |
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(B) whose liability obligations to other persons |
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are satisfied wholly or partly by payment made under this chapter; |
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[and] |
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(2) the amount of a covered claim for workers' |
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compensation insurance benefits and the costs of administration and |
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defense of the claim paid under this chapter from an insured |
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employer or any successor entity to the insured employer under |
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state, federal, or international law whose net worth on December 31 |
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of the year preceding the date the insurer becomes an impaired |
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insurer exceeds $50 million; and |
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(3) the amount paid under any policy, including the |
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costs of administration and defense of the claim, from an insured or |
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any successor entity excluded by Section 462.212(a) before the |
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insured's identification as an insured whose net worth on December |
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31 of the year preceding the date the insurer became an impaired |
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insurer exceeds $50 million. |
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(b) The association is not entitled to recover under |
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Subsection (a)(2) or (3) against an insured who is exempt from |
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federal income tax under Section 501(a), Internal Revenue Code of |
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1986, by being described by Section 501(c)(3) of that code. |
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(c) For purposes of Subsections [Subsection] (a)(2) and |
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(3), an insured's net worth is deemed to include the aggregate net |
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worth of the insured and of the insured's parent, subsidiary, and |
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affiliated companies computed on a consolidated basis. |
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SECTION 8. Section 462.309(a), Insurance Code, is amended |
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to read as follows: |
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(a) To permit the association to properly defend a pending |
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cause of action, a proceeding in which an impaired insurer is a |
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party or is obligated to defend a party or a proceeding asserted |
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directly against the association arising out of a policy issued by |
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the impaired insurer in a court in this state, other than a |
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proceeding directly related to the receivership or instituted by |
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the receiver, is stayed for: |
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(1) a six-month period beginning on the later of the |
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date of the designation of impairment or the date an ancillary |
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proceeding is brought in this state; and |
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(2) a subsequent period as determined by the court, if |
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any. |
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SECTION 9. Except as provided by this section, the changes |
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in law made by this Act apply only with respect to a property and |
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casualty insurance company that is designated as an impaired |
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insurer on or after the effective date of this Act. The law as it |
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existed immediately before the effective date of this Act applies |
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with respect to a property and casualty insurance company that is |
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designated as an impaired insurer before the effective date of this |
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Act, and that law is continued in effect for that purpose. |
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SECTION 10. This Act takes effect September 1, 2025. |