HBA-ATS H.B. 3177 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3177
By: Lewis, Glenn
Insurance
4/4/1999
Introduced



BACKGROUND AND PURPOSE 

Current law protects consumers who buy property and casualty insurance from
licensed insurers who become insolvent, by providing for the Texas Property
and Casualty Insurance Guaranty Association (association) to pay
policyholders' claims.  An insolvent domestic insurer is placed into
receivership by a state district judge in Travis County.  The judge orders
the commissioner of insurance to take charge of the company.  The
commissioner may then hire a special deputy receiver to gather and pay out
company assets to creditors. 

Article 21.28 (Liquidation, Rehabilitation, Reorganization or Conservation
of Insurers), Insurance Code, sets forth the statutory requirement for
filing claims against insolvent insurance companies placed in receivership.
All persons who may have claims against an insolvent insurer are required
to present them to the receiver within the deadline set by the receivership
court, which in no event is less than 90 days after the date of the entry
of the order specifying such time.  Subject to court approval, the receiver
may accept claims filed after the date specified by the court if the claims
are filed with the receiver by the 90th day after the date notice of the
claimant's right to file a proof of claim is mailed to the claimant.
Claims that are not filed within the time specified by the court are
prohibited from participating in any distribution of the assets by the
receiver.  Nonetheless, some Texas court have permitted claimants to file
late in extenuating circumstances.  It is unclear, however, whether the
association is responsible for paying these claims. 

H.B. 3177 includes a date established under Section 3(b) (Claims), Article
21.28 (Property and Casualty Insurance Guaranty Act), Insurance Code, among
the dates after which a claim is prohibited from being considered a covered
claim filed with the Texas Property and Casualty Insurance Guaranty
Association. 

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 Section 8(d), Article 21.28-C, Insurance Code, to
include a date established under Section 3(b) (Claims), Article 21.28
(Property and Casualty Insurance Guaranty Act), Insurance Code, among the
dates after which a claim is prohibited from being considered a covered
claim filed with the Texas Property and Casualty Insurance Guaranty
Association. 

SECTION 2.Effective date: September 1, 1999.
  Makes application of this Act prospective.

SECTION 3.Emergency clause.