HBA-NIK S.B. 1657 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 1657
By: Jackson
Insurance
4/13/1999
Engrossed



BACKGROUND AND PURPOSE 

Currently, boards of directors of domestic insurance companies must
annually approve employee compensation which exceeds $50,000 per year.  Due
to salary increases, the number of people covered under this restriction
has grown significantly for many companies.  Securing board approval for
each employee's salary which is over the statutory limit has become a
time-consuming process.  
S.B. 2751 prohibits a "domestic" company from paying any salary in an
amount greater than $100,000 in any year to any officer, trustee, or
director or to any person, firm, or corporation, unless the compensation is
first authorized by the board of directors. 

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.  Subsection (a), Article 3.12, Insurance Code, as follows:

(a)  Increases the maximum salary,  beyond which a "domestic" company is
prohibited to pay any officer, trustee or director of the "domestic"
company,  rather than thereof, from $50,000 to $100,000 in any year.
Provides an exception to such payment relating to authorization by board of
directors.  Provides that the limitation as to time contained in this
article does not prevent a "domestic" company from entering into contracts
with its agents for the payment of renewal commissions, rather than
prohibiting the limitation as to time contained herein from being construed
as preventing any "domestic" company from entering into such contracts. 

SECTION 2. Effective date: September 1, 1999.

SECTION 3. Emergency clause.