By: Taylor of Galveston	S.B. No. 2179

	A BILL TO BE ENTITLED
	AN ACT
	relating to the applicability of certain insurance laws to certain
	farm mutual insurance companies.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 221.001, Insurance Code, is amended by
	amending Subsection (b) and adding Subsection (c) to read as
	follows:
	(b)  This chapter does not apply to:
	(1)  a fraternal benefit society, including a fraternal
	benefit society operating under Chapter 885;
	(2)  a group hospital service corporation operating
	under Chapter 842;
	(3)  a stipulated premium company operating under
	Chapter 884;
	(4)  a mutual assessment association, company, or
	corporation regulated under Chapter 887; [or]
	(5)  a purely cooperative or mutual fire insurance
	company carried on by its members solely for the protection of their
	own property and not for profit, except as provided by Section
	221.002(b)(13); or
	(6)  a farm mutual insurance company operating under
	Chapter 911, unless the company is acting as a fronting insurer.
	(c)  In this section, "fronting insurer" means a farm mutual
	insurance company:
	(1)  issuing an insurance policy that is the result of:
	(A)  marketing by an insurer not affiliated with
	the farm mutual insurance company;
	(B)  an application submitted by a consumer to an
	insurer not affiliated with the farm mutual insurance company; or
	(C)  an agreement with an insurer that is not a
	farm mutual insurance company solely for the purpose of being
	regulated under Chapter 911; or
	(2)  that cedes 85 percent or more of the farm mutual
	insurance company's direct written premium to one or more
	nonaffiliated reinsurers.
	SECTION 2.  Section 252.005, Insurance Code, is amended to
	read as follows:
	Sec. 252.005.  EXCEPTION. This chapter does not apply to:
	(1)  a farm mutual insurance company operating under
	Chapter 911, unless the company is acting as a fronting insurer as
	defined by Section 221.001(c); or
	(2)  a mutual insurance company engaged in business
	under Chapter 12, Title 78, Revised Statutes, before that chapter's
	repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
	Called Session, 1929, as amended by Section 1, Chapter 60, General
	Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
	retains the rights and privileges under the repealed law to the
	extent provided by those sections.
	SECTION 3.  Section 2210.006(b), Insurance Code, is amended
	to read as follows:
	(b)  This chapter does not apply to:
	(1)  a farm mutual insurance company operating under
	Chapter 911, unless the company is acting as a fronting insurer, as
	defined by Section 221.001(c);
	(2)  a nonaffiliated county mutual fire insurance
	company described by Section 912.310 that is writing exclusively
	industrial fire insurance policies as described by Section
	912.310(a)(2); or
	(3)  a mutual insurance company or a statewide mutual
	assessment company engaged in business under Chapter 12 or 13,
	Title 78, Revised Statutes, respectively, before those chapters'
	repeal by Section 18, Chapter 40, Acts of the 41st Legislature, 1st
	Called Session, 1929, as amended by Section 1, Chapter 60, General
	Laws, Acts of the 41st Legislature, 2nd Called Session, 1929, that
	retains the rights and privileges under the repealed law to the
	extent provided by those sections.
	SECTION 4.  (a)  Sections 221.001 and 252.005, Insurance
	Code, as amended by this Act, do not affect tax liability accruing
	before the 2017 calendar year.  That liability continues in effect
	as if this Act had not been enacted, and the former law is continued
	in effect for the collection of taxes due and for civil and criminal
	enforcement of the liability for those taxes.
	(b)  Section 2210.006(b), Insurance Code, as amended by this
	Act, applies only to participation in the Texas Windstorm Insurance
	Association on or after the effective date of this Act, including
	the payment of assessments the liability for which accrues on or
	after that date. Participation in the Texas Windstorm Insurance
	Association before the effective date of this Act, including the
	payment of assessments the liability for which accrued before that
	date, is governed by the law as it existed immediately before that
	date, and that law is continued in effect for that purpose.
	SECTION 5.  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, 2017.