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


Office of House Bill AnalysisC.S.H.B. 3304
By: Thompson
Insurance
4/23/1999
Committee Report (Substituted)


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. 

C.S.H.B. 3304 requires any books, records, and accounts of insurance
companies that are located outside this state to be made available to the
department, either electronically or at a designated branch or agency
office within this state, within three business days of a written request
by the department. 

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, to require any books,
records, and accounts of insurance companies that are located outside this
state to be made available to the department, either electronically or at a
designated branch or agency office within this state, within three business
days of a written request by the department.  Makes conforming and
nonsubstantive changes. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute differs from the original in SECTION 1 by reinstating text
in Article 1.28, Insurance Code, which provides that if the commissioner of
insurance does 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,  the insurer is
authorized to do this.  The substitute requires any books, records, and
accounts of insurance companies that are located outside this state to be
made available to the Texas Department of Insurance (department), either
electronically or at a designated branch or agency office within this
state, within three business days of a written request by the department.
The substitute restores a provision which provides that expenses incurred
by the department to examine the books, records, accounts, or principal
offices of a company located outside this state are prohibited from being
allowed a credit on or offset to the amount of premium taxes to be paid by
the insurance company.  The original added a provision which required an
insurance company to  reimburse these examination expenses upon completion
of the examination and required that these reimbursements be deposited in
and expended through the Texas Department of Insurance Operating Fund.