HBA-ATS H.B. 3304 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3304
By: Thompson
Insurance
4/11/1999
Introduced


BACKGROUND AND PURPOSE 

Article 1.28 (Out-of-State Books, Records, Accounts, and Offices),
Insurance Code, authorizes a domestic insurer,  if it provides written
notice to the commissioner of insurance of its intent to relocate books and
records and if the commissioner does not disapprove within 30 days after
that notice is given, to locate and maintain all or any portion of its
books, records, and accounts and its principal offices outside of Texas at
a location within the United States.  Although the expenses incurred by the
Texas Department of Insurance (department) to examine the books, records,
accounts, or principal offices of a domestic insurer located outside Texas
are prohibited from being used as a credit on or offset to the amount of
premium taxes to be paid by the insurer to the state, the department has
been hesitant to approve the relocation of books and records because the
reimbursements for expenses are not deposited in the department's
examiners' fund.  Due to this, each out-of-state examination costs the
department funds that can be used for other examinations. 

H.B. 3304 deletes the requirement that the commissioner of insurance must
not disapprove within 30 days after a domestic insurer notifies the
commissioner that it intends to locate and maintain all or any portion of
its books, records, and accounts and its principal offices outside this
state before the insurer is authorized to do this.  In addition, this bill
deletes expenses incurred by the department to examine the books, records,
accounts, or principal offices of a company located outside this state from
the prohibition against allowing a credit on or offset to the amount of
premium taxes to be paid by the insurance company.  Under this bill, an
insurance company is required to reimburse the examination expenses upon
completion of the examination.  The reimbursements must be deposited in and
expended through the Texas Department of Insurance Operating Fund. 

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 Article 1.28, Insurance Code, as follows:

Sec. 1.  Deletes the requirement that the commissioner of insurance must
not disapprove within 30 days after a domestic insurer notifies the
commissioner that it intends to locate and maintain all or any portion of
its books, records, and accounts and its principal offices outside this
state at a location within the United States before the insurer is
authorized to do this.  Specifies that this article does not apply to or
prohibit the location and maintenance of the normal books, records, and
accounts of either a branch office or agency office whether or not
affiliated with a company at the branch office or agency office, if that
office is located in the United States. 

Sec. 2.  Deletes expenses incurred by the Texas Department of Insurance
(department) to examine the books, records, accounts, or principal offices
of a company located outside this state from the prohibition against
allowing a credit on or offset to the amount of premium taxes to be paid by
the insurance company.  Requires an insurance company to reimburse these
examination expenses upon completion of the examination.  Requires that
these reimbursements be deposited in and expended through the Texas
Department of Insurance Operating Fund.  Makes conforming changes. 
 
SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.