HBA-ATS H.B. 1829 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1829
By: Farabee
Insurance
3/8/1999
Introduced



BACKGROUND AND PURPOSE 

Current law protects consumers who buy property and casualty insurance from
licensed insurers who become insolvent, by providing for the Texas Property
and Casualty Insurance Guaranty Association (association) to pay
policyholders' claims.  The association collects funds to pay claims by
charging its member insurers an assessment based on the value of all net
direct written premiums of all member insurers.  The Texas Insurance Code
defines a "member insurer" as any person who writes any kind of insurance
to which the Texas Property and Casualty Insurance Guaranty Act (Act)
applies under Section 3 of the Act, including the exchange of reciprocal or
inter-insurance contracts, and who is licensed to transact insurance in
this state.  Although stock, mutual, Lloyds insurers, reciprocal or
inter-insurance exchange, and county mutual insurance companies are not
encompassed within the statutory definition, the Texas Department of
Insurance treats them as member insurers. This treatment may contravene
existing law because the Insurance Code exempts these insurers from the
operation of all insurance laws except as specifically provided by law. 

H.B. 1829 includes any stock, mutual, Lloyds insurer, reciprocal or
inter-insurance exchange, or county mutual insurance company among the
member insurers of the Texas Property and Casualty Insurance Guaranty
Association. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 5(10), Article 21.28-C, Insurance Code, to
redefine "member insurer" to mean any insurer, rather than person, who
writes any kind of insurance to which the Texas Property and Casualty
Insurance Guaranty Act applies under Section 3 (Scope), and is licensed to
transact insurance in this state, including any stock, mutual, Lloyds
insurer, reciprocal or interinsurance exchange, or county mutual insurance
company.  Proposes to delete the following language: "or other insurer
licensed to transact insurance in this state."  (This language does not
currently exist in the definition of "member insurer.") 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.