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