The text as introduced · 1,007 words
89R16206 SCR-F
By: Paul
H.B. No. 4877
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.
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