Bill Text: TX HB3460 | 2013-2014 | 83rd Legislature | Enrolled
Bill Title: Relating to the requirement that certain information be reported to the Texas Department of Insurance and the confidentiality of that information.
Spectrum: Bipartisan Bill
Status: (Passed) 2013-06-14 - Effective immediately [HB3460 Detail]
Download: Texas-2013-HB3460-Enrolled.html
H.B. No. 3460 |
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relating to the requirement that certain information be reported to | ||
the Texas Department of Insurance and the confidentiality of that | ||
information. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 823.011, Insurance Code, is amended by | ||
amending Subsections (a) and (d) and adding Subsection (d-1) to | ||
read as follows: | ||
(a) This section applies only to information, including | ||
documents and copies of documents, that is: | ||
(1) reported or otherwise provided under Subchapter B | ||
or C or Section 823.201(d) or (e); | ||
(2) disclosed to the commissioner under Section | ||
823.010; or | ||
(3) obtained by or disclosed to the commissioner or | ||
another person in the course of an examination or investigation | ||
under Subchapter H. | ||
(d) Except as provided by Subsection (e), if the recipient | ||
of documents or other information agrees in writing to maintain the | ||
confidential and privileged status of the documents or other | ||
information, and verifies in writing the legal authority to | ||
maintain the confidential and privileged status of the documents or | ||
information, the commissioner or another person may disclose the | ||
information to any of the following entities functioning in an | ||
official capacity: | ||
(1) a commissioner of insurance or an insurance | ||
department of another state; | ||
(2) an authorized law enforcement official; | ||
(3) a district attorney of this state; | ||
(4) the attorney general; | ||
(5) a grand jury; | ||
(6) members of a supervisory college described by | ||
Section 823.0145; [ |
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(7) the National Association of Insurance | ||
Commissioners and its affiliates and subsidiaries; or | ||
(8) another state, federal, or international | ||
regulatory agency. | ||
(d-1) The commissioner may receive documents or | ||
information, including otherwise confidential and privileged | ||
documents or information from the entities listed in Subsection | ||
(d), and shall maintain as confidential or privileged any document | ||
or information received by the commissioner with notice or an | ||
understanding that the document or information is confidential or | ||
privileged under the laws of the jurisdiction of the entity that | ||
provides the document or information. | ||
SECTION 2. Section 823.052(c), Insurance Code, is amended | ||
to read as follows: | ||
(c) The registration statement must also contain | ||
information about: | ||
(1) each outstanding loan the insurer makes to an | ||
affiliate of the insurer or an affiliate makes to the insurer; | ||
(2) each purchase, sale, or exchange of securities or | ||
other investment between the insurer and an affiliate of the | ||
insurer; | ||
(3) each purchase, sale, or exchange of assets between | ||
the insurer and an affiliate of the insurer; | ||
(4) each management and service contract or | ||
cost-sharing arrangement between the insurer and an affiliate of | ||
the insurer; | ||
(5) each reinsurance agreement between the insurer and | ||
an affiliate of the insurer that covers one or more lines of | ||
insurance of the ceding company; | ||
(6) each agreement between the insurer and an | ||
affiliate of the insurer to consolidate federal income tax returns; | ||
(7) each transaction between the insurer and an | ||
affiliated financial institution; | ||
(8) each transaction between the insurer and an | ||
affiliate of the insurer that is not in the ordinary course of | ||
business; | ||
(9) each guarantee or undertaking, other than an | ||
insurance contract entered into in the ordinary course of the | ||
insurer's business, for the benefit of an affiliate of the insurer | ||
that results in a contingent exposure of the insurer's assets to | ||
liability; | ||
(10) each dividend or distribution to the insurer's | ||
shareholders; | ||
(11) each transaction between the insurer and an | ||
affiliate of the insurer not specified by this subsection that is | ||
subject to Section [ |
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(12) the corporate governance and internal control | ||
responsibilities of the insurer's board of directors, including a | ||
statement that: | ||
(A) the insurer's senior management or officers | ||
have approved and implemented, and continue to maintain and | ||
monitor, corporate governance and internal control procedures; and | ||
(B) the insurer's board of directors oversees | ||
corporate governance and internal controls; and | ||
(13) any other information that the commissioner | ||
requires by rule. | ||
SECTION 3. Section 823.053(e), Insurance Code, is amended | ||
to read as follows: | ||
(e) An insurer is not required to report under this section | ||
a transaction that is approved under Section [ |
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That approval is considered to be an amendment of the registration | ||
statement filed under Section 823.052 without being reported under | ||
this section. | ||
SECTION 4. Sections 823.103(a) and (b), Insurance Code, are | ||
amended to read as follows: | ||
(a) This section applies only to: | ||
(1) a sale, purchase, exchange, loan or other | ||
extension of credit, or investment between a domestic insurer and | ||
any person in the insurer's insurance holding company system, | ||
including an amendment or modification of an affiliate agreement | ||
previously filed under this section, provided the transaction is | ||
not less than: | ||
(A) with respect to nonlife insurers, the lesser | ||
of three [ |
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percent of the insurer's admitted assets or 25 [ |
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insurer's surplus as regards policyholders[ |
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the year preceding the year in which the transaction occurs; or | ||
[ |
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(B) with respect to life insurers, three percent | ||
of the insurer's admitted assets as of December 31 of the year | ||
preceding the year in which the transaction occurs [ |
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(2) a loan or other extension of credit to a person who | ||
is not an affiliate if the insurer makes a loan or extension of | ||
credit with the agreement or understanding that the proceeds of the | ||
transaction, wholly or in substantial part, are to be used to make | ||
loans or extensions of credit to, to purchase assets of, or to make | ||
investment in, an affiliate of the insurer making the loan or | ||
extension of credit, provided the transaction is not less than: | ||
(A) with respect to nonlife insurers, the lesser | ||
of three percent of the insurer's admitted assets or 25 percent of | ||
the insurer's surplus as regards policyholders as of December 31 of | ||
the year preceding the year in which the transaction occurs; or | ||
(B) with respect to life insurers, three percent | ||
of the insurer's admitted assets as of December 31 of the year | ||
preceding the year in which the transaction occurs; | ||
(3) a reinsurance agreement, including a reinsurance | ||
treaty or pooling agreement, or an amendment or modification of an | ||
agreement previously filed under this section, between a domestic | ||
insurer and any person in the insurer's holding company system; | ||
(4) [ |
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insurer and any person in the insurer's holding company system on a | ||
regular or systematic basis, including a tax-allocation agreement, | ||
or an amendment or modification of an agreement previously filed | ||
under this section; or | ||
(5) [ |
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insurer and any person in the insurer's holding company system that | ||
is specified by rule and that the commissioner determines may | ||
adversely affect the interests of the insurer's policyholders or of | ||
the public, including an amendment or modification of an agreement | ||
previously filed under this section. | ||
(b) Subsection (a)(3) [ |
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agreement that requires as consideration a transfer of assets from | ||
an insurer to a nonaffiliate and in relation to which the insurer | ||
and nonaffiliate agree that any part of the transferred assets are | ||
to be transferred to one or more affiliates of the insurer. | ||
SECTION 5. Section 823.104, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 823.104. PROHIBITION OF ACTION TO AVOID APPLICATION OF | ||
SUBCHAPTER. (a) A domestic insurer may not enter into transactions | ||
with persons in the insurer's insurance holding company system if: | ||
(1) the transactions are part of a plan or series of | ||
similar transactions; and | ||
(2) the purpose of entering into the transactions is | ||
to avoid a threshold amount provided by Section [ |
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823.103. | ||
(b) If the commissioner determines that over any 12-month | ||
period a domestic insurer enters into transactions that violate | ||
Subsection (a), the commissioner may: | ||
(1) consider the cumulative effect of the | ||
transactions; and | ||
(2) apply: | ||
(A) Section [ |
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(B) sanctions under this code. | ||
SECTION 6. Section 823.105, Insurance Code, is amended to | ||
read as follows: | ||
Sec. 823.105. TYPE OF AUTHORITY PROVIDED. Nothing in | ||
Section [ |
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that would violate law that is applicable to an insurer that is not | ||
subject to this subchapter. | ||
SECTION 7. Section 823.102, Insurance Code, is repealed. | ||
SECTION 8. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2013. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 3460 was passed by the House on May 3, | ||
2013, by the following vote: Yeas 144, Nays 1, 1 present, not | ||
voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 3460 was passed by the Senate on May | ||
22, 2013, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: _____________________ | ||
Date | ||
_____________________ | ||
Governor |